aibioArrowhead Pharmaceuticals prices $625,000,000 of 0.00% convertible notes due 2032
Tickers ARWR
Arrowhead Pharmaceuticals raised the notes from $500,000,000 to $625,000,000 while selling common stock at the same time. The notes rank behind $254.9 million of secured borrowing.
Key facts
- Company
- Arrowhead Pharmaceuticals, Inc. (NASDAQ: ARWR)
- News type
- Debt Financing
- Primary source
- Arrowhead Pharmaceuticals, Inc. 424B5 (2026-01-07)
The notes
Arrowhead Pharmaceuticals, Inc. (Nasdaq: ARWR) priced $625,000,000 of 0.00% convertible senior notes due 2032, according to a prospectus supplement dated January 7, 2026. Preliminary supplements dated January 6, 2026 had described a $500,000,000 offering. The underwriters have a 30-day option to buy up to an additional $75,000,000 of notes.
The notes pay no regular interest. The initial conversion rate is 11.4844 shares per $1,000 principal amount, an initial conversion price of about $87.07 per share. The last reported sale price of the common stock was $65.69 on January 7, 2026, below that conversion price. The company may redeem the notes on or after January 16, 2029 if its stock trades above 130% of the conversion price for a set period.
The offering price is 100% of principal. Underwriting discounts and commissions are $16,250,000, which leaves $608,750,000 before expenses. The company estimates net proceeds of about $608.2 million, or about $681.3 million if the option is exercised in full. U.S. Bank Trust Company, National Association is the trustee, paying agent and conversion agent.
Banks and advisors
The book-running managers are J.P. Morgan, Jefferies, BofA Securities, Piper Sandler and RBC Capital Markets. Matthews South, LLC is financial advisor to Arrowhead. The capped call transactions are entered into with one or more of the underwriters or their affiliates, and/or other financial institutions, which the supplement calls the option counterparties.
The concurrent stock sale and the use of money
Arrowhead is also offering 3,100,776 shares of common stock, or pre-funded warrants for 1,550,387 shares in place of some shares, with an option for up to 465,116 more shares. The company estimates net proceeds of about $188.3 million from that offering if it is completed, or about $216.6 million with the option. The supplement says neither offering depends on the other.
The company intends to use about $42.8 million of the note proceeds to fund the capped call transactions. The filing says those transactions are generally expected to reduce potential dilution on conversion and to offset cash payments above principal. The rest of the proceeds, together with the stock offering proceeds, are for general corporate purposes, including working capital, capital expenditures, research and development, clinical trial costs and preparation for potential launches of late-stage products. Part of the proceeds may also prepay loans under the Credit Facility.
Debt already on the books
As of September 30, 2025, the company had about $254.9 million of indebtedness for borrowed money, excluding the credit facility of Visirna Therapeutics Inc., a variable interest entity for which the company is the primary beneficiary. All of the counted debt is senior secured indebtedness under the financing agreement that establishes the Credit Facility. Those loans bear interest at 15.0% a year, paid in kind and added to principal each period. Visirna's facility had 72.9 million Chinese yuan, about $10.3 million, outstanding.
The notes are senior, unsecured obligations. The filing says they are effectively subordinated to the company's existing and future secured debt, to the extent of the value of the collateral securing it, and structurally subordinated to all debt of the subsidiaries. The indenture does not prohibit the company or its subsidiaries from taking on more debt, including secured debt.
The product base
The supplement says 19 Arrowhead-discovered candidates are in clinical trials, from Phase 1 to Phase 3. It says the FDA approved REDEMPLO (plozasiran) in 2025 for adults with familial chylomicronemia syndrome, as an adjunct to diet to reduce triglycerides. Three Phase 3 studies in severe hypertriglyceridemia (SHASTA-3, SHASTA-4 and SHASTA-5) are fully enrolled, and the company plans to file a supplemental application in 2026, pending successful completion of those studies. The company says the notes and stock proceeds, with existing cash and investments, should fund planned operations into fiscal year 2029. That is the company's own estimate.
Arrowhead reported a net loss of $1.6 million for the year ended September 30, 2025, against $599.5 million a year earlier, and cash provided by operations of $179.6 million, against $462.9 million used in 2024. Research and development expense rose to $607.2 million from $505.9 million. The supplement gives no revenue figure for REDEMPLO.