Company Description
Unless otherwise noted, (1) the term "Arrowhead" refers toArrowhead Pharmaceuticals, Inc. , aDelaware corporation, (2) the terms "Company," "we," "us," and "our," refer to the ongoing business operations of Arrowhead and its Subsidiaries, whether conducted through Arrowhead or a subsidiary of Arrowhead, (3) the term "Subsidiaries" refers toArrowhead Madison Inc. ("ArrowheadMadison "), andArrowhead Australia Pty Ltd ("Arrowhead Australia"), (4) the term "Common Stock" refers to Arrowhead's Common Stock, (5) the term "Preferred Stock" refers to Arrowhead's Preferred Stock and (6) the term "Stockholder(s)" refers to the holders of Arrowhead Common Stock.
Overview
Arrowhead Pharmaceuticals, Inc. develops medicines that treat intractable diseases by silencing the genes that cause them. Using a broad portfolio of RNA chemistries and efficient modes of delivery, Arrowhead therapies trigger the RNA interference mechanism to induce rapid, deep and durable knockdown of target genes. RNA interference ("RNAi") is a mechanism present in living cells that inhibits the expression of a specific gene, thereby affecting the production of a specific protein. Arrowhead's RNAi-based therapeutics leverage this natural pathway of gene silencing. The Company's pipeline includes ARO-APOC3 for hypertriglyceridemia, ARO-ANG3 for dyslipidemia, ARO-HSD for liver disease, ARO-ENaC for cystic fibrosis, ARO-HIF2 for renal cell carcinoma, ARO-DUX4 for facioscapulohumeral muscular dystrophy, ARO-LUNG2 for chronic obstructive pulmonary disorder, ARO-COV for the coronavirus that causes COVID-19 and other possible future pulmonary-borne pathogens and ARO-C3 for complement mediated diseases. ARO-XDH is being developed for uncontrolled gout under a collaboration agreement with Horizon Therapeutics Ireland DAC ("Horizon"). ARO-JNJ2 and ARO-JNJ3 are being developed for undisclosed liver-expressed targets under a collaboration agreement withJanssen Pharmaceuticals, Inc. ("Janssen"). JNJ-75220795 (ARO-JNJ1) is being developed by Janssen as a potential treatment for patients with non-alcoholic steatohepatitis (NASH). ARO-AAT for liver disease associated with alpha-1 antitrypsin deficiency ("AATD") was out-licensed toTakeda Pharmaceuticals U.S.A., Inc. ("Takeda") inOctober 2020 . JNJ-3989 (formerly referred to as ARO-HBV) for chronic hepatitis B virus was out-licensed to Janssen inOctober 2018 . Olpasiran (formerly referred to as AMG 890 or ARO-LPA) for cardiovascular disease was out-licensed to Amgen Inc. ("Amgen") in 2016. During fiscal year 2021, the Company continued to develop its pipeline and partnered candidates. The Company announced positive interim clinical data on (i) AROAAT2002, an open-label Phase 2 clinical study of ARO-AAT, the Company's second-generation investigational RNAi therapeutic being co-developed with Takeda as a treatment for the rare genetic liver disease associated with AATD, (ii) AROHSD1001, a Phase 1/2 clinical study of ARO-HSD, the Company's investigational RNAi therapeutic being developed as a treatment for patients with alcohol-related and nonalcohol related liver diseases, such as nonalcoholic steatohepatitis (NASH), and (iii) AROHIF21001, a Phase 1b dose-finding clinical study of ARO-HIF2, the Company's investigational RNAi therapeutic being developed as a treatment for patients with clear cell renal cell carcinoma. The Company also presented preclinical data on the development of ARO-DUX4, the Company's investigational RNAi therapeutic being developed as a treatment for patients with facioscapulohumeral muscular dystrophy (FSHD), at the 28th AnnualFSHD Society International Research Congress . The Company hosted a key opinion leader webinar on its cardiometabolic candidates, ARO-APOC3 and ARO-ANG3, and presented positive clinical data from the Phase 1/2 clinical studies of ARO-APOC3 and ARO-ANG3 at the American Heart Association Scientific Sessions 2020. The Company filed two Investigational New Drug Applications with theUnited States Food and Drug Administration (the "FDA") to begin a Phase 2b clinical study of ARO-APOC3 in patients with severe hypertriglyceridemia and a Phase 2b clinical study of ARO-ANG3 in patients with mixed dyslipidemia, and initiated these two Phase 2b clinical studies in the third quarter of fiscal year 2021. The Company also filed for regulatory clearance to begin a Phase 1/2a study of ARO-C3 for treatment of complement mediated diseases. InJuly 2021 , the Company voluntarily paused AROENaC1001, a Phase 1/2 clinical study of ARO-ENaC, the Company's investigational RNAi therapeutic being developed as a treatment for patients with cystic fibrosis, after receiving a preliminary update from an ongoing chronic toxicology study in rats that contained unexpected signals of local lung inflammation. New screening, enrollment and any further dosing of investigational ARO-ENaC have been paused pending additional data from ongoing nonclinical toxicology studies. The Company announced two collaborations during fiscal year 2021: a collaboration with Takeda to co-develop and co-commercialize ARO-AAT for alpha-1 antitrypsin-associated liver disease and a collaboration with Horizon to develop ARO-XDH, an investigational RNAi therapeutic for uncontrolled gout. InJuly 2021 , the Company received Breakthrough Therapy designation from the FDA for ARO-AAT, which is a process designed to expedite the development and review of drugs that are intended to treat a serious life-threatening disease or condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. The Company's partnered candidates under its collaboration agreements also continued to progress. Janssen began dosing patients in a Phase 2b triple combination study called REEF-1, designed to enroll up to 450 patients with chronic hepatitis B infection. The Company is currently performing discovery, optimization and preclinical research and development for JNJ-75220795 (ARO-JNJ1), ARO-JNJ2 and ARO-JNJ3 for Janssen as part of the Company's Research Collaboration and Option Agreement with Janssen (the "Janssen Collaboration Agreement"), and Janssen has began dosing patients in its Phase 1 clinical trial for JNJ-75220795 (ARO-JNJ1). Amgen has initiated a Phase 2 clinical trial for Olpasiran (previously referred to as AMG 890 or ARO-LPA). The Company entered into two licensing deals during fiscal 2021: i) an Exclusive License and Co-Funding Agreement (the "Takeda License Agreement") with Takeda for ARO-AAT, and ii) a Collaboration and License Agreement (the "Horizon License Agreement") with 50
-------------------------------------------------------------------------------- Horizon Therapeutics Ireland DAC ("Horizon") for ARO-XDH. ARO-AAT is currently in Phase 2 clinical trials and ARO-XDH is in discovery-stage. During fiscal year 2021, the Company earned$340.0 million in upfront payments from its collaboration agreements, and$20.0 million in option and milestone payments. In total, the Company remains eligible for$5.3 billion in developmental, regulatory and sales milestones, in various royalties on net sales.
The recognition of revenues for these collaboration agreements is discussed in more detail in Note 2 Notes to the consolidated financial statements in Part IV, section 15. Appendices and tables to the financial statements.
Arrowhead operates laboratory facilities in
Arrowhead has focused its resources on therapeutics that exclusively utilize the Company's Targeted RNAi Molecule (TRiMTM) platform technology. Therapeutics built on the TRiMTM platform have demonstrated high levels of pharmacologic activity in multiple animal models spanning several therapeutic areas. TRiMTM enabled therapeutics offer several potential advantages over prior generation and competing technologies, including: simplified manufacturing and reduced costs; multiple routes of administration including subcutaneous injection and inhaled administration; the ability to target multiple tissue types including liver, lung, muscle and tumors; and the potential for improved safety and reduced risk of intracellular buildup, because there are less metabolites from smaller, simpler molecules. The Company continues to develop other clinical candidates for future clinical trials. Clinical candidates are tested internally and through GLP toxicology studies at outside laboratories. Drug materials for such studies and clinical trials are either contracted to third-party manufacturers or manufactured internally. The Company engages third-party contract research organizations ("CROs") to manage clinical trials and works cooperatively with such organizations on all aspects of clinical trial management, including plan design, patient recruiting, and follow up. These outside costs, relating to the preparation for and administration of clinical trials, are referred to as "candidate costs." If the clinical candidates progress through human testing, candidate costs will increase. The Company is actively monitoring the ongoing COVID-19 pandemic. The financial results for the years endedSeptember 30, 2021 and 2020 were not significantly impacted by COVID-19. Operationally, the Company experienced delays in its earlier stage programs due to a shortage in non-human primates, which are critical for the Company's preclinical programs. Additionally, the Company experienced delays in enrollment in its clinical trials. The Company's operations at its research and development facilities inMadison, Wisconsin andSan Diego, California , and its corporate headquarters inPasadena, California have continued to operate with limited impact, other than for enhanced safety measures, including work from home policies, and intermittent lab supply shortages. However, the Company cannot predict the impact the progression of COVID-19 will have on future financial and operational results due to a variety of factors, including the ability of the Company's clinical sites to continue to enroll subjects, the ability of the Company's suppliers to continue to operate, the continued good health and safety of the Company's employees and the length and severity of the COVID-19 pandemic. Net loss was$140.8 million for the year endedSeptember 30, 2021 as compared to net loss of$84.6 million for the year endedSeptember 30, 2020 and net income of$68.0 million for the year endedSeptember 30, 2019 . Net loss per share - diluted was$1.36 for the year endedSeptember 30, 2021 as compared to net loss per share-diluted of$0.84 for the year endedSeptember 30, 2020 and net income per share-diluted of$0.69 for the year endedSeptember 30, 2019 . An increase in research and development and general and administrative expenses, partially offset by an increase in revenue due to the Takeda collaboration, were the drivers of the increase in net loss and net loss per share for the year endedSeptember 30, 2021 , as discussed further below. The Company has strengthened its liquidity and financial position through upfront and milestone payments received under its collaboration agreements, as well as equity financings. Under the terms of the Company's agreements with Janssen taken together, the Company has received$175.0 million as an upfront payment,$75.0 million in the form of an equity investment by JJDC in Arrowhead Common Stock and four milestone payments totaling$70.0 million . Under the terms of the Company's agreements with Amgen, the Company has received$35.0 million in upfront payments,$21.5 million in the form of an equity investment by Amgen in the Company's Common Stock and$30.0 million in milestone payments. The Company'sOctober 2020 licensing agreement with Takeda resulted in a$300.0 million upfront payment, and the Company'sJune 2021 licensing agreement with Horizon resulted in a$40 million upfront payment, each of which was collected during fiscal year 2021. The Company had$184.4 million of cash and cash equivalents,$126.7 million of marketable securities,$56.6 million in short-term investments,$245.6 million of long-term investments and$710.1 million of total assets as ofSeptember 30, 2021 , as compared to$143.6 million of cash and cash equivalents,$85.0 million of marketable securities,$86.9 million in short-term investments,$137.5 million of long-term investments and$522.5 million of total assets as ofSeptember 30, 2020 , respectively. Based upon the Company's current cash and investment resources and operating plan, the Company expects to have sufficient liquidity to fund operations for at least the next twelve months. 51
————————————————– ——————————
Critical accounting conventions and estimates
Management makes certain judgments and uses certain estimates and assumptions when applying accounting principles generally accepted inthe United States ("GAAP") in the preparation of our Consolidated Financial Statements. We evaluate our estimates and judgments on an ongoing basis and base our estimates on historical experience and on assumptions that we believe to be reasonable under the circumstances. Our experience and assumptions form the basis for our judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may vary from what we anticipate and different assumptions or estimates about the future could change our reported results. We believe the following accounting policies are the most critical to us, in that they require our most difficult, subjective or complex judgments in the preparation of our consolidated financial statements. For further information, see Note 1, Organization and Significant Accounting Policies, to our Consolidated Financial Statements, which outlines our application of significant accounting policies.Investments-The Company may invest excess cash balances in short-term and long-term marketable debt and equity securities. Investments may consist of certificates of deposit, money market accounts, government-sponsored enterprise securities, corporate bonds and/or commercial paper. The Company accounts for its investment in marketable securities in accordance withFinancial Accounting Standards Board ("FASB") ASC 320, Investments - Debt and Equity Securities and ASC 321, Investments inEquity Securities . ASC 320-Investments-Debt and Equity Securities requires debt securities to be classified into three categories:
Held-to-maturity debt securities that the entity intends and has the ability to hold to maturity are carried at amortized cost.
Trading Securities-Debt securities that are bought and held primarily for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in earnings.
Available-for-sale debt securities that are not classified as held-to-maturity or trading securities are recognized at fair value, with unrealized gains or losses excluded from earnings and presented as a separate component of equity.
The Company classifies its investments in marketable debt securities based on the facts and circumstances present at the time of purchase of the securities. During the years endedSeptember 30, 2021 , 2020 and 2019, all of the Company's debt securities were classified as held-to-maturity. Held-to-maturity investments are measured and recorded at amortized cost on the Company's Consolidated Balance Sheet. Discounts and premiums to par value of the debt securities are amortized to interest income/expense over the term of the security. No gains or losses on investment securities are realized until they are sold or a decline in fair value is determined to be other-than-temporary. The Company invests in shares of mutual funds that invest in marketable debt securities such asU.S. government bonds,U.S. government agency bonds, corporate bonds, and other asset backed debt securities. The Company accounts for these securities using the guidance from FASB ASC 321,Investments-Equity Securities . These securities are recorded on the Company's Consolidated Balance Sheet as "marketable securities" and recorded at fair value. All unrealized gains/losses associated with these securities are recorded in the Company's Consolidated Statement of Operations and Comprehensive Income (Loss). Intangible Assets Subject to Amortization-Intangible assets subject to amortization include certain patents and license agreements. Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable and are also reviewed annually to determine whether any impairment is necessary. Contingent Consideration-The consideration for the Company's acquisitions may include future payments that are contingent upon the occurrence of a particular event. For example, milestone payments might be based on the achievement of various regulatory approvals or future sales milestones, and royalty payments might be based on drug product sales levels. The Company records a contingent consideration obligation for such contingent payments at fair value on the acquisition date. The Company estimates the fair value of contingent consideration obligations through valuation models designed to estimate the probability of such contingent payments based on various assumptions and incorporating estimated success rates. Estimated payments are discounted using present value techniques to arrive at an estimated fair value at the balance sheet date. Changes in the fair value of the contingent consideration obligations are recognized within the Company's Consolidated Statements of Operations and Comprehensive Income (Loss). Changes in the fair value of the contingent consideration obligations can result from changes to one or multiple inputs, including adjustments to the discount rates, changes in the amount or timing of expected expenditures associated with product development, changes in the amount or timing of cash flows from products upon commercialization, changes in the assumed achievement or timing of any development milestones, changes in the probability of certain clinical events and changes in the assumed probability associated with regulatory approval. These fair value measurements are based on significant inputs not observable in the market. Substantial judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense the Company 52
————————————————– ——————————
records during a given period. The Company determined that the fair value of its contingent consideration obligation was
Revenue Recognition- OnOctober 1, 2018 , the Company adopted FASB Topic 606 - Revenue for Contracts from Customers which amended revenue recognition principles and provides a single, comprehensive set of criteria for revenue recognition within and across all industries. The Company's adoption of the revenue standard did not have a material impact on its Consolidated Financial Statements. The Company has not yet achieved commercial sales of its drug candidates to date, however, the new standard is applicable to the Company's ongoing licensing and collaboration agreements, including those with Amgen, Janssen, Takeda and Horizon, and the analysis of the impact of this guidance on those agreements is discussed further in Note 2 of Notes to Consolidated Financial Statements of Part IV, Item 15. Exhibits and Financial Statement Schedules. The revenue standard provides a five-step framework for recognizing revenue as control of promised goods or services is transferred to a customer at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of the revenue standard, the Company performs the following five steps: (i) identify the contract; (ii) identify the performance obligations; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. At contract inception, the Company assesses whether the goods or services promised within each contract are distinct and, therefore, represent a separate performance obligation, or whether they are not distinct and are combined with other goods and services until a distinct bundle is identified. The Company then determines the transaction price, which typically includes upfront payments and any variable consideration that the Company determines is probable to not cause a significant reversal in the amount of cumulative revenue recognized when the uncertainty associated with the variable consideration is resolved. The Company then allocates the transaction price to each performance obligation and recognizes the associated revenue when (or as) each performance obligation is satisfied. The Company recognizes the transaction price allocated to upfront license payments as revenue upon delivery of the license to the customer and resulting ability of the customer to use and benefit from the license, if the license is determined to be distinct from the other performance obligations identified in the contract. These other performance obligations are typically to perform research and development services for the customer, often times relating to the candidate that the customer is licensing. If the license is not considered to be distinct from other performance obligations, the Company assesses the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied at a point in time or over time. If the performance obligation is satisfied over time, the Company then determines the appropriate method of measuring progress for purposes of recognizing revenue from license payments. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the related revenue recognition. Typically, the Company's collaboration agreements entitle it to additional payments upon the achievement of milestones or royalties on sales. The milestones are generally categorized into three types: development milestones, generally based on the initiation of toxicity studies or clinical trials; regulatory milestones, generally based on the submission, filing or approval of regulatory applications such as a Clinical Trial Application ("CTA") or a New Drug Application ("NDA") inthe United States ; and sales-based milestones, generally based on meeting specific thresholds of sales in certain geographic areas. The Company evaluates whether it is probable that the consideration associated with each milestone or royalty will not be subject to a significant reversal in the cumulative amount of revenue recognized. Amounts that meet this threshold are included in the transaction price using the most likely amount method, whereas amounts that do not meet this threshold are excluded from the transaction price until they meet this threshold. At the end of each subsequent reporting period, the Company re-evaluates the probability of a significant reversal of the cumulative revenue recognized for our milestones and royalties, and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and net income in our Consolidated Statements of Operations and Comprehensive Income (Loss). Typically, milestone payments and royalties are achieved after the Company's performance obligations associated with the collaboration agreements have been completed and after the customer has assumed responsibility for the respective clinical or pre-clinical program. Milestones or royalties achieved after the Company's performance obligations have been completed are recognized as revenue in the period the milestone or royalty was achieved. If a milestone payment is achieved during the performance period, the milestone payment would be recognized as revenue to the extent performance had been completed at that point, and the remaining balance would be recorded as deferred revenue. The revenue standard requires the Company to assess whether a significant financing component exists in determining the transaction price. The Company performs this assessment at the onset of its licensing or collaboration agreements. Typically, a significant financing component does not exist because the customer is paying for a license or services in advance with an upfront payment. Additionally, future royalty payments are not substantially within the control of the Company or the customer. The revenue standard requires the Company to allocate the arrangement consideration on a relative standalone selling price basis for each performance obligation after determining the transaction price of the contract and identifying the performance obligations to which that amount should be allocated. The relative standalone selling price is defined in the new revenue standard as the price at which an entity would sell a promised good or service separately to a customer. If other observable transactions in which 53
————————————————– ——————————
the Company sold the same performance bond separately is not available, the Company estimates the standalone sale price of each performance bond. Key assumptions in determining the stand-alone selling price may include expected revenues, development times, personnel expense reimbursement rates, discount rates, and probabilities of technical and regulatory success.
Whenever the Company determines that goods or services promised in a contract should be accounted for as a combined performance obligation over time, the Company determines the period over which the performance obligations will be performed and revenue will be recognized. Revenue is recognized using either the proportional performance method or on a straight-line basis if efforts will be expended evenly over time. Labor hours, costs incurred or patient visits in clinical trials are typically used as the measure of performance. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations. If the Company determines that the performance obligation is satisfied over time, any upfront payment received is initially recorded as deferred revenue on the Company's Consolidated Balance Sheets. Certain judgments affect the application of the Company's revenue recognition policy. For example, the Company records short-term and long-term deferred revenue based on its best estimate of when such revenue will be recognized. Short-term deferred revenue consists of amounts that are expected to be recognized as revenue in the next 12 months, and long-term deferred revenue consists of amounts that the Company does not expect will be recognized in the next 12 months. This estimate is based on the Company's current operating plan and, if the Company's operating plan should change in the future, the Company may recognize a different amount of deferred revenue over the next 12-month period.Collaborative Arrangements-The Company analyzes its collaborative arrangements to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards, and therefore are within the scope of FASB Topic 808-Collaborative Arrangements. For collaborative arrangements that contain multiple elements, the Company determines which units of account are deemed to be within the scope of Topic 808 and which units of account are more reflective of a vendor-customer relationship, and therefore are within the scope of Topic 606. For units of account that are accounted for pursuant to Topic 808, an appropriate recognition method is determined and applied consistently, either by analogy to appropriate accounting literature or by applying a reasonable accounting policy election. For collaborative arrangements that are within the scope of Topic 808, the Company evaluates the income statement classification for presentation of amounts due to or owed from other participants associated with multiple units of account in a collaborative arrangement based on the nature of each activity. Payments or reimbursements that are the result of a collaborative relationship instead of a customer relationship, such as co-development and co-commercialization activities, are recorded as increases or decreases to Research and Development Expense or General and Administrative Expense, as appropriate. Research and Development-Costs and expenses that can be clearly identified as research and development are charged to expense as incurred in accordance with FASB ASC 730-10. Included in research and development costs are operating costs, facilities, supplies, external services, clinical trial and manufacturing costs, overhead directly related to the Company's research and development operations, and costs to acquire technology licenses.Stock-Based Compensation-The Company accounts for share-based compensation arrangements in accordance with FASB ASC 718, which requires the measurement and recognition of compensation expense for all share-based payment awards to be based on estimated fair values. The Company uses the Black-Scholes option valuation model to estimate the fair value of its stock options at the date of grant. The Black-Scholes option valuation model requires the input of subjective assumptions to calculate the value of stock options. For restricted stock units, the value of the award is based on the Company's stock price at the grant date. For performance-based restricted stock unit awards, the value of the award is based on the Company's stock price at the grant date, with consideration given to the probability of the performance condition being achieved. The Company uses historical data and other information to estimate the expected price volatility for stock option awards and the expected forfeiture rate for all awards. Expense is recognized over the vesting period for all awards and commences at the grant date for time-based awards and upon the Company's determination that the achievement of such performance conditions is probable for performance-based awards. This determination requires significant judgment by management.Income Taxes-The Company accounts for income taxes under the liability method, which requires the recognition of deferred income tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred income tax assets to the amount expected to be realized. The provision for income taxes, if any, represents the tax payable for the period and the change in deferred income tax assets and liabilities during the period.Leases-The Company determines whether a contract is, or contains, a lease at inception. The Company classifies each of its leases as operating or financing considering factors such as the length of the lease term, the present value of the lease payments, the 54
-------------------------------------------------------------------------------- nature of the asset being leased, and the potential for ownership of the asset to transfer during the lease term. Leases with terms greater than one-year are recognized on the Consolidated Balance Sheets as Right-of-use assets and Lease liabilities and are measured at the present value of the fixed payments due over the expected lease term minus the present value of any incentives, rebates or abatements expected to be received from the lessor. Options to extend a lease are typically excluded from the expected lease term as the exercise of the option is typically not reasonably certain. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis an amount equal to the lease payments over a similar term and in a similar economic environment. The Company records expense to recognize fixed lease payments on a straight-line basis over the expected lease term. Costs determined to be variable and not based on an index or rate are not included in the measurement of the lease liability and are expensed as incurred.
Results of operations
The following data summarizes our results of operations for the following periods indicated: Years ended September 30, 2021 2020 2019 (in thousands, except per share amounts) Revenues$ 138,287 $ 87,992 $ 168,796 Operating Income (loss)$ (149,036 ) $ (93,159 ) $ 61,191 Net Income (loss)$ (140,848 ) $ (84,553 ) $ 67,975 Net Income (Loss) per share-Diluted $ (1.36 )$ (0.84 ) $ 0.69 The increase in revenue for the year endedSeptember 30, 2021 compared to the year endedSeptember 30, 2020 was driven by the timing of the recognition of the$300 million initial transaction price associated with our agreement with Takeda as we achieved progress toward completing our performance obligation. The increase in Net Losses during the year endedSeptember 30, 2021 compared to year endedSeptember 30, 2020 was driven by increases in research and development and general and administrative expenses as our pipeline of clinical candidates has continued to increase. Revenue Total revenue for the years endedSeptember 30, 2021 , 2020, and 2019 was$138.3 million ,$88.0 million and$168.8 million , respectively. Revenue in the current period is primarily related to the recognition of$90.8 million of revenue associated with the Takeda License Agreement, recognition of$20.2 million related to the$252.7 million initial transaction price associated with our agreements with Janssen and JJDC, recognition of$6.7 million of revenue associated with the Horizon License Agreement and$20.0 million in option and milestone payments from Janssen for JNJ-75220795 (ARO-JNJ1).
Amgen Inc.
OnSeptember 28, 2016 , the Company entered into two collaboration and license agreements and a common stock purchase agreement with Amgen. Under the Second Collaboration and License Agreement or Olpasiran Agreement, Amgen has received a worldwide, exclusive license to Arrowhead's novel, RNAi Olpasiran (previously referred to as AMG 890 or ARO-LPA) program. These RNAi molecules are designed to reduce elevated lipoprotein(a), which is a genetically validated, independent risk factor for atherosclerotic cardiovascular disease. Under the other collaboration and license agreement (the "First Collaboration and License Agreement" or the "ARO-AMG1 Agreement"), Amgen received an option to a worldwide, exclusive license for ARO-AMG1, an RNAi therapy for an undisclosed genetically validated cardiovascular target. In both agreements, Amgen is wholly responsible for clinical development and commercialization. Under the terms of the agreements taken together, the Company has received$35.0 million in upfront payments,$21.5 million in the form of an equity investment by Amgen in the Company's Common Stock, and$30.0 million in milestone payments, and may receive up to an additional$400.0 million in remaining development, regulatory and sales milestone payments. The Company is further eligible to receive up to low double-digit royalties for sales of products under the Olpasiran Agreement. InJuly 2019 , Amgen informed the Company that it would not be exercising its option for an exclusive license for ARO-AMG1, and as such, there will be no further milestone or royalty payments under the ARO-AMG1 Agreement. The Company has evaluated these agreements in accordance with FASB Topics 808 - Collaboration Arrangements and 606 - Revenue for Contracts from Customers. The Company has substantially completed its performance obligations under the Olpasiran Agreement and the ARO-AMG1 Agreement. Future milestones and royalties achieved will be recognized in their entirety when earned. InJuly 2020 , Amgen initiated a Phase 2 clinical study for Olpasiran, which resulted in a$20 million milestone payment to the Company. During the years endedSeptember 30, 2021 , 2020 and 2019, the Company recognized$0 ,$20.1 million and$0.3 million of Revenue associated with its agreements with Amgen, respectively. As ofSeptember 30, 2021 , there were$0 in contract assets 55
————————————————– ——————————
recorded as accounts receivable and
OnOctober 3, 2018 , the Company entered into the Janssen License Agreement and the Janssen Collaboration Agreement with Janssen, part of theJanssen Pharmaceutical Companies of Johnson & Johnson. The Company also entered into a stock purchase agreement with JJDC ("JJDC Stock Purchase Agreement"). Under the Janssen License Agreement, Janssen has received a worldwide, exclusive license to the Company's JNJ-3989 (ARO-HBV) program, the Company's third-generation subcutaneously administered RNAi therapeutic candidate being developed as a potential therapy for patients with chronic hepatitis B virus infection. Beyond the Company's Phase 1/2 study of JNJ-3989 (ARO-HBV), which the Company is responsible for completing, Janssen is wholly responsible for clinical development and commercialization of JNJ-3989. Under the Janssen Collaboration Agreement, Janssen will be able to select three new targets against which Arrowhead will develop clinical candidates. These candidates are subject to certain restrictions and do not include candidates that already were in the Company's pipeline. The Company will perform discovery, optimization and preclinical research and development, entirely funded by Janssen, which on its own or in combination with Janssen development work, is sufficient to allow the filing of aU.S. Investigational New Drug Application or equivalent, at which time Janssen will have the option to take an exclusive license. If the option is exercised, Janssen will be wholly responsible for clinical development and commercialization of each optioned candidate. Under the terms of the agreements taken together, the Company has received$175.0 million as an upfront payment,$75.0 million in the form of an equity investment by JJDC in Arrowhead Common Stock under the JJDC Stock Purchase Agreement, and milestone and option payments totaling$70.0 million , and may receive up to$1.6 billion in development and sales milestones payments for the Janssen License Agreement, and up to$1.9 billion in development and sales milestone payments for the three additional targets covered under the Janssen Collaboration Agreement. The Company is further eligible to receive tiered royalties on product sales up to mid-teens under the Janssen License Agreement and up to low teens under the Janssen Collaboration Agreement. The Company has evaluated these agreements in accordance with FASB Topics 808 - Collaboration Arrangements and 606 - Revenue for Contracts from Customers. At the inception of these agreements, the Company identified one distinct performance obligation. Regarding the Janssen License Agreement, the Company determined that the key deliverables included the license and certain R&D services including the Company's responsibility to complete the Phase 1/2 study of JNJ-3989 (ARO-HBV) and the Company's responsibility to ensure certain manufacturing of JNJ-3989 (ARO-HBV) drug product is completed and delivered to Janssen (the "Janssen R&D Services"). Due to the specialized and unique nature of these Janssen R&D Services and their direct relationship with the license, the Company determined that these deliverables represent one distinct bundle and, thus, one performance obligation. The Company also determined that Janssen's option to require the Company to develop up to three new targets is not a material right and, thus, not a performance obligation at the onset of the agreement. The consideration for this option is accounted for separately. The Company determined the transaction price totaled approximately$252.7 million , which includes the upfront payment, the premium paid by JJDC for its equity investment in the Company, two$25.0 million milestone payments related to JNJ-3989 (ARO-HBV), and estimated payments for reimbursable Janssen R&D Services to be performed. The Company has allocated the total$252.7 million initial transaction price to its one distinct performance obligation for the JNJ-3989 (ARO-HBV) license and the associated Janssen R&D Services. The Company has recognized this transaction price in its entirety as ofSeptember 30, 2021 as the performance obligation had been substantially completed. Future milestones and royalties achieved will be recognized in their entirety when earned. During the years endedSeptember 30, 2021 , 2020 and 2019, the Company recognized approximately$20.2 million ,$65.0 million , and$167.5 million of revenue associated with this performance obligation, respectively. As ofSeptember 30, 2021 , there were$0.1 million in contract assets recorded as accounts receivable, and$0 of contract liabilities recorded as current deferred revenue on the Company's Consolidated Balance Sheets. The Company has begun to conduct its discovery, optimization and preclinical research and development of JNJ-75220795 (ARO-JNJ1), ARO-JNJ2 and ARO-JNJ3 under the Janssen Collaboration Agreement. All costs and labor hours spent by the Company will be entirely funded by Janssen. During the years endedSeptember 30, 2021 , 2020 and 2019, the Company recognized$0.5 million ,$2.9 million and$1.0 million of revenue associated with these efforts, respectively. InMay 2021 , Janssen exercised its option right for for JNJ-75220795 (ARO-JNJ1), which resulted in a$10.0 million milestone payment to the Company, and inSeptember 2021 , Janssen dosed its fifth patient in its phase 1 clinical trial for JNJ-75220795 (ARO-JNJ1), which resulted in a$10.0 million milestone payment to the Company. Each of these milestone payments was recognized entirely during the year endedSeptember 30, 2021 . As ofSeptember 30, 2021 , there were$10.0 million of contract assets recorded as accounts receivable and$0 of contract liabilities recorded as current deferred revenue on the Company's Consolidated Balance Sheets. The$10.0 million milestone payment for the dosing of the fifth patient in its Phase 1 clinical trial for JNJ-75220795 (ARO-JNJ1) was received inOctober 2021 . 56
————————————————– ——————————
OnOctober 7, 2020 , the Company entered into the Takeda License Agreement with Takeda. Under the Takeda License Agreement, Takeda and the Company will co-develop the Company's ARO-AAT program, the Company's second-generation subcutaneously administered RNAi therapeutic candidate being developed as a treatment for liver disease associated with alpha-1 antitrypsin deficiency. Withinthe United States , ARO-AAT, if approved, will be co-commercialized under a 50/50 profit sharing structure. Outsidethe United States , Takeda will lead the global commercialization strategy and will receive an exclusive license to commercialize ARO-AAT, while the Company will be eligible to receive tiered royalties of 20% to 25% on net sales. InJanuary 2021 , the Company received$300.0 million as an upfront payment and is eligible to receive potential development, regulatory and commercial milestones of up to$740.0 million . The Company has evaluated the Takeda License Agreement in accordance with FASB Topics 808 - Collaborative Arrangements and 606 - Revenue for Contracts from Customers. At the inception of the Takeda License Agreement, the Company identified one distinct performance obligation. The Company determined that the key deliverables included the license and certain R&D services, including the Company's responsibilities to complete the initial portion of the SEQUOIA study, to complete the ongoing Phase 2 AROAAT2002 study and to ensure certain manufacturing of ARO-AAT drug product is completed and delivered to Takeda (the "Takeda R&D Services"). Due to the specialized and unique nature of these Takeda R&D Services and their direct relationship with the license, the Company determined that these deliverables represented one distinct bundle and, thus, one performance obligation. Beyond the Takeda R&D Services, which are the responsibility of the Company, Takeda will be responsible for managing future clinical development and commercialization outsidethe United States . Withinthe United States , the Company will also participate in co-development and co-commercialization efforts and will co-fund these efforts with Takeda as part of the 50/50 profit sharing structure withinthe United States . The Company considers the collaborative activities, including the co-development and co-commercialization, to be a separate unit of account within Topic 808, and as such, these co-funding amounts will be recorded as Research and Development Expenses or General and Administrative Expenses, as appropriate. The Company determined the initial transaction price totaled$300.0 million , including the upfront payment. The Company has excluded any future estimated milestones or royalties from this transaction price to date. The Company has allocated the total$300.0 million initial transaction price to its one distinct performance obligation for the ARO-AAT license and the associated Takeda R&D Services. Revenue will be recognized using a proportional performance method (based on actual patient visits completed versus total estimated visits completed for the ongoing SEQUOIA and AROAAT2002 clinical studies). Revenue for the years endedSeptember 30, 2021 , 2020 and 2019 was$90.8 million ,$0 and$0 , respectively. As ofSeptember 30, 2021 , there were$0 in contract assets recorded as accounts receivable,$84.4 million in contract liabilities recorded as deferred revenue,$124.8 million in contract liabilities recorded as deferred revenue, net of the current portion, and$3.1 million in contract liabilities recorded as accrued expenses. The$3.1 million in accrued expenses was primarily driven by co-development and co-commercialization activities.
Horizon Therapeutics Ireland DAC
OnJune 18, 2021 , the Company entered into the Horizon License Agreement with Horizon. Under the Horizon License Agreement, Horizon received a worldwide exclusive license for ARO-XDH, a previously undisclosed discovery-stage investigational RNAi therapeutic being developed by the Company as a potential treatment for people with uncontrolled gout. The Company will conduct all activities through the preclinical stages of development of ARO-XDH, and Horizon will be wholly responsible for clinical development and commercialization of ARO-XDH. InJuly 2021 , the Company received$40 million as an upfront payment and is eligible to receive up to$660 million in potential development, regulatory and sales milestones. The Company is also eligible to receive royalties in the low- to mid-teens range on net product sales. The Company has evaluated the Horizon License Agreement in accordance with FASB Topics 808 - Collaborative Arrangements and 606 - Revenue for Contracts from Customers. At the inception of the Horizon License Agreement, the Company identified one distinct performance obligation. The Company determined that the key deliverables included the license and certain R&D services including the Company's responsibilities to conduct all activities through the preclinical stages of development of ARO-XDH (the "Horizon R&D Services"). Due to the specialized and unique nature of these Horizon R&D Services and their direct relationship with the license, the Company determined that these deliverables represented one distinct bundle and, thus, one performance obligation. Beyond the Horizon R&D Services, which are the responsibility of the Company, Horizon will be responsible for managing future clinical development and commercialization of ARO-XDH. The Company determined the initial transaction price totaled$40.0 million , including the upfront payment. The Company has excluded any future estimated milestones or royalties from this transaction price to date. The Company will allocate the total$40.0 million initial transaction price to its one distinct performance obligation for the ARO-XDH license and the associated Horizon R&D Services. Revenue will be recognized on a straight-line basis over the estimated timeframe for completing the Horizon R&D Services. The Company determined that the straight-line basis was appropriate as its efforts will be expended evenly over the course of completing its performance obligation. Revenue for the years endedSeptember 30, 2021 , 2020 and 2019, was$6.7 million ,$0 and$0 , respectively. As ofSeptember 30, 2021 , there were$0.1 million in contract assets recorded as accounts receivable,$26.7 million in contract liabilities recorded as deferred revenue and$6.7 million in contract liabilities recorded as deferred revenue, net of the current portion. 57
————————————————– ——————————
Operating Expenses
The analysis below details the operating expenses and discusses the expenditures of the Company within the major expense categories. Certain reclassifications have been made to prior-period operating expense categories to conform to the current period presentation. For purposes of comparison, the amounts for the years endedSeptember 30, 2021 and 2020 are shown in the tables below.
Research and development costs
R&D expenses are related to the Company's research and development discovery efforts and related candidate costs, which are comprised primarily of outsourced costs related to the manufacturing of clinical supplies, toxicity/efficacy studies and clinical trial expenses. Internal costs primarily relate to discovery operations at our research facilities inMadison, Wisconsin andSan Diego, California , including facility costs and laboratory-related expenses. Salaries and stock compensation expense consist of salary, bonuses, payroll taxes and related benefits and stock compensation for our R&D personnel. Depreciation and amortization expense relates to depreciation on lab equipment and leasehold improvements at our research facilities. We do not separately track R&D expenses by individual research and development projects, or by individual drug candidates. The Company operates in a cross-functional manner across projects and does not separately allocate facilities-related costs, candidate costs, discovery costs, compensation expenses, depreciation and amortization expenses, and other expenses related to research and development activities. The following table provides details of research and development expenses for the periods indicated: (table below in thousands) Twelve Twelve Months % of Months % of Ended Expense Ended Expense Increase (Decrease) September September 30, 2021 Category 30, 2020 Category $ % Salaries$ 40,179 19 %$ 26,300 20 %$ 13,879 53 % Facilities related 7,694 4 % 4,136 3 % 3,558 86 % Candidate costs 92,628 45 % 60,638 47 % 31,990 53 % R&D discovery costs 32,734 16 % 16,192 13 % 16,542 102 % Total research and development expense, excluding non-cash expense$ 173,235 84 %$ 107,266 83 %$ 65,969 62 % Stock compensation 25,742 12 % 16,277 13 % 9,465 58 % Depreciation/amortization 7,365 4 % 5,332 4 % 2,033 38 % Total research and development expense$ 206,342 100 %$ 128,875 100 %$ 77,467 60 % Salaries expense increased by$13,879,000 from$26,300,000 during the year endedSeptember 30, 2020 to$40,179,000 during the current period. This increase is primarily due to an increase in R&D headcount that has occurred as the Company has expanded its pipeline of candidates. We anticipate this expense to continue to increase as we continue to expand our pipeline of candidates and increase headcount to support our discovery efforts to identify new drug candidates. Facilities-related expense increased by$3,558,000 from$4,136,000 during the year endedSeptember 30, 2020 to$7,694,000 during the current period. This category includes rental costs for our research and development facilities inMadison, Wisconsin andSan Diego, California . This increase is primarily due to the commencement of our sublease inSan Diego, California inApril 2020 , the expansion of ourMadison facility and increased repairs and maintenance expense on equipment. We anticipate this expense to increase in the future due to our plans to continue to increase our manufacturing capabilities and discovery efforts. Candidate costs increased by$31,990,000 from$60,638,000 during the year endedSeptember 30, 2020 to$92,628,000 during the current period. This increase is primarily due to the progression of our pipeline of candidates into and through clinical trials, which results in higher outsourced clinical trial, toxicity study and manufacturing costs. We anticipate these expenses to continue to increase as our pipeline of candidates grows and progresses to later phase clinical trials. R&D discovery costs increased by$16,542,000 from$16,192,000 during the year endedSeptember 30, 2020 to$32,734,000 in the current period. This increase is primarily due to the growth of our discovery efforts, including the addition of our research facility inSan Diego . We anticipate this expense to continue to increase as we increase headcount to support our discovery efforts to identify new drug candidates. 58
-------------------------------------------------------------------------------- Stock compensation expense, a non-cash expense, increased by$9,465,000 from$16,277,000 during the year endedSeptember 30, 2020 to$25,742,000 during the current period. Stock compensation expense is based upon the valuation of stock options and restricted stock units granted to employees, directors and certain consultants. Many variables affect the amount expensed, including the Company's stock price on the date of the grant, as well as other assumptions. The increase in the expense in the current period is primarily due to the increased headcount discussed above and a mix of higher grant date fair values of awards amortizing during the current period due to the Company's stock price at the time of the grants. We generally expect future stock compensation expense to increase as our headcount continues to increase to support our clinical pipeline.
The depreciation charge, a non-cash charge, increased by
General and administrative expenses
The following table provides details of our general and administrative expenses for the periods indicated: (table below in thousands) Twelve Twelve Months % of Months % of Ended Expense Ended Expense Increase (Decrease) September September 30, 2021 Category 30, 2020 Category $ % Salaries$ 13,681 17 %$ 11,781 23 %$ 1,900 16 %
Professional / outdoor
services 10,148 13 % 7,342 14 % 2,806 38 % Facilities related 2,344 3 % 2,203 5 % 141 6 % Other G&A 2,976 3 % 3,233 6 % (257 ) -8 % Total general & administrative expense, excluding non-cash expense$ 29,149 36 %$ 24,559 48 %$ 4,590 19 % Stock compensation 50,931 63 % 27,106 52 % 23,825 88 % Depreciation/amortization 901 1 % 611 1 % 290 47 % Total general & administrative expense$ 80,981 100 %$ 52,276 100 %$ 28,705 55 % Salaries expense increased by$1,900,000 from$11,781,000 during the year endedSeptember 30, 2020 to$13,681,000 during the current period. The increase is primarily driven by annual merit increases, performance bonuses and increased headcount needed to support our growing clinical pipeline. We anticipate this expense to continue to increase as our pipeline expands. Professional/outside services include legal, accounting, consulting, patent expenses, business insurance expenses and other outside services retained by the Company. Professional/outside services expense increased by$2,806,000 from$7,342,000 during the year endedSeptember 30, 2020 to$10,148,000 during the current period. The increase is primarily related to an increase in consulting expenses in the current period. Facilities-related expense increased by$141,000 from$2,203,000 during the year endedSeptember 30, 2020 to$2,344,000 during the current period. This category primarily includes rental costs for our corporate headquarters inPasadena, California . The increase was due to the additional space leased for our corporate headquarters to accommodate the increase in headcount. Other G&A expense decreased by$257,000 from$3,233,000 during the year endedSeptember 30, 2020 to$2,976,000 during the current period. This category consists primarily of travel, communication and technology, office expenses, and franchise and property tax expenses. We anticipate this expense to increase in the future as our headcount increases in order to support our growing pipeline. Stock compensation expense, a non-cash expense, increased by$23,825,000 from$27,106,000 during the year endedSeptember 30, 2020 to$50,931,000 during the current period. The increase is due to certain performance-based stock awards being deemed probable of being achieved in the current period. Stock compensation expense is based upon the valuation of stock options and restricted stock units granted to employees, directors and certain consultants. Many variables affect the amount expensed, including the Company's stock price on the date of the grant, as well as other assumptions. We generally expect future stock compensation expense to increase as our headcount continues to increase to support our clinical pipeline. Depreciation and amortization expense, a noncash expense, increased by$290,000 from$611,000 during the year endedSeptember 30, 2020 to$901,000 during the current period. The increase is primarily related to amortization of leasehold improvements for our corporate headquarters. 59
————————————————– ——————————
Other income / expenses
Other income/expense was income of$8.6 million during the year endedSeptember 30, 2020 compared to income of$8.2 million during the current period. Other income/expense primarily consists of interest income. The change in interest income between the year endedSeptember 30, 2021 and 2020 is primarily due to the amounts invested in and the interest rates earned on our bond portfolio.
Liquidity and capital resources
Arrowhead has historically financed its operations through the sale of its equity securities and revenue from its collaboration agreements. Research and development activities have required significant capital investment since the Company's inception and are expected to continue to require significant cash expenditure in the future, particularly as the Company's pipeline of drug candidates and its headcount have expanded significantly. Additionally, significant capital investment will be required as the Company's pipeline matures into later stage clinical trials, as well as with the Company's plans to increase its internal manufacturing capabilities and discovery efforts. AtSeptember 30, 2021 , the Company had cash on hand of approximately$184.4 million as compared to$143.6 million atSeptember 30, 2020 . Cash invested in short-term fixed income securities and marketable securities was$183.4 million atSeptember 30, 2021 , compared to$171.9 million atSeptember 30, 2020 . Cash invested in long-term fixed income securities was$245.6 million atSeptember 30, 2021 , compared to$137.5 million atSeptember 30, 2020 . The Company also entered into an Open Market Sale Agreement (the "ATM" agreement), pursuant to which the Company may, from time to time, sell up to$250,000,000 in shares of the Company's common stock throughJefferies LLC . As of the year endedSeptember 30, 2021 , no shares have been issued under the ATM agreement. The Company believes its current financial resources are sufficient to fund its operations through at least the next twelve months. A summary of cash flows for the years endedSeptember 30, 2021 , 2020, and 2019 as follows: Years ended September 30, 2021 2020 2019 (in thousands) Cash Flow from: Operating Activities$ 171,224 $ (95,391 ) $ 173,035 Investing Activities (141,678 ) (240,778 ) (47,746 ) Financing Activities 11,305 257,948 66,382 Net Increase (decrease) in cash and cash equivalents 40,851 (78,221 )
191 671
Cash and cash equivalents at beginning of period 143,583 221,804
30 133
Cash and cash equivalents at end of period$ 184,434 $ 143,583 $ 221,804 During the year endedSeptember 30, 2021 , the Company generated$171.2 million in cash from operating activities, which was primarily related to the Takeda license agreement's$300 million upfront payment, partially offset by the ongoing expenses of the Company's research and development programs and general and administrative expenses. Cash used in investing activities was$141.7 million , which was primarily related to the purchase of investments of$240.7 million and purchase of property and equipment of$23.6 million , partially offset by maturities of fixed-income securities of$122.6 million . Cash provided by financing activities of$11.3 million was due to cash received from stock option exercises. During the year endedSeptember 30, 2020 , the Company used$95.4 million in cash from operating activities, which was primarily related to the ongoing expenses of the Company's research and development programs and general and administrative expenses. Cash used in investing activities was$240.8 million , which was primarily related to the purchase of investments of$279.0 million and purchase of property and equipment of$12.0 million , partially offset by maturities of fixed-income securities of$50.1 million . Cash provided by financing activities of$257.9 million was driven by the securities financing inDecember 2019 , which generated$250.5 million in net cash proceeds, as well as$7.5 million in cash received from stock option exercises. During the year endedSeptember 30, 2019 , the Company generated$173.0 million in cash from operating activities, which was primarily related to the$175.0 million upfront payment and the two$25.0 million milestone payments received from Janssen, and the premium JJDC paid on the Company's common stock during the period. These inflows were partially offset by approximately$66.5 million of cash used for the ongoing expenses of the Company's research and development programs and general and administrative expenses. Cash used in investing activities was$47.7 million , which was primarily related to purchases of fixed-income investments of$90.3 million partially offset by maturities of fixed-income investments of$54.5 million . Cash provided by financing activities of$66.4 million was driven by the equity investment the Company received from JJDC during the period. 60
--------------------------------------------------------------------------------
Contractual obligations
For information related to our future commitments for our facility related obligaitons, see Notes 8 and 14 of Notes to Consolidated Financial Statements of Part IV, Item 15. Exhibits and Financial Statement Schedules. For information related to our future commitments relating to our collaboration and licensing agreements, see Notes 2 and 8 of Notes to Consolidated Financial Statements of Part IV, Item 15. Exhibits and Financial Statement Schedules. Commitments related to our clinical, manufacturing and business operation related agreements are$214.9 million as of the year endedSeptember 30, 2021 , however these agreements are cancelable.
© Edgar online, source