Demo
ARWR Nasdaq· Arrowhead Pharmaceuticals Inc.
FundamentalsNews digest Peer analysis
Login
ARWR Nasdaq· Arrowhead Pharmaceuticals Inc.
Earnings report Q4 2023

ARWR Reports Significant Decrease in Revenue for Q4 2023

Segments of Revenue

ARWR's total revenue for the three months ended December 31, 2023, was $3.55 million, representing a substantial decline of $59.0 million or 94.3% compared to the same period in 2022. The decline in revenue was primarily driven by the recognition of revenue associated with GSK and Takeda collaborations.

Strengths

Despite the significant decrease in revenue, ARWR's management highlighted the revenue recognition associated with the GSK and Takeda collaborations as a strength. The company has evaluated each agreement in accordance with accounting standards and recognized revenue based on the input method, which considers actual patient visits completed versus total estimated visits for ongoing clinical studies. This approach ensures accurate revenue recognition and aligns with the revised performance period.

Challenges

The main weakness for ARWR in the latest quarter was the substantial decline in revenue. The decrease of $59.0 million, or 94.3%, compared to the same period in the previous year indicates a significant challenge for the company. The decline in revenue can be attributed to the completion of Phase 2 study visits for patients in the SEQUOIA and AROAAT2002 studies by December 31, 2023, as Takeda initiated a Phase 3 OLE study earlier than expected. This accelerated timeline impacted ARWR's revenue recognition estimates and resulted in a decrease in revenue for the quarter.

Noteworthy

It is noteworthy that ARWR adjusted its revenue recognition estimates in fiscal year 2023 to align with the revised performance period. As a result, the company recognized the remaining $0.9 million deferred revenue for the three months ended December 31, 2023. This adjustment reflects ARWR's commitment to accurate revenue recognition and its ability to adapt to changes in clinical trial timelines.

Summary

ARWR's latest quarter performance was marked by a significant decrease in revenue, with a decline of $59.0 million or 94.3% compared to the same period in the previous year. The decline was primarily driven by the completion of Phase 2 study visits for patients in ongoing clinical studies, as Takeda initiated a Phase 3 OLE study earlier than expected. Despite this challenge, ARWR demonstrated strength in accurately recognizing revenue based on actual patient visits completed and aligning with the revised performance period. The company's ability to adapt to changes in clinical trial timelines is noteworthy. Overall, ARWR's latest quarter performance highlights the importance of closely monitoring clinical trial progress and its impact on revenue recognition.

Source documents

Form 10-Q  filed on Feb 06, 2024
84 pages scanned

Reference data

Company financials Q4 revenue 3.6M
Analyst estimates Q4 EPS beat by 114.46%
Sign up to Fey

Get in-depth analysis on thousands of stocks for just $30/month. Cancel anytime.