Ladies and gentlemen, welcome to the Arrowhead Research Corporation Fiscal 2015 Third Quarter Financial Results Conference Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. I will now hand the conference call over to Vincent Anzalone, Vice President of Investor Relations for Arrowhead. Please go ahead, Vince.

Thank you and good afternoon, everyone. And thank you for joining us today to discuss Arrowhead’s results for its fiscal 2015 third quarter ended June 30, 2015. With us today from management are President and CEO, Dr. Christopher Anzalone; Chief Operating Officer and Head of R&D, Dr. Bruce Given; and Chief Financial Officer, Ken Myszkowski. Management will provide a brief overview of the quarter and we’ll then open up the call to your questions. Before we begin, I would like to remind you that comments made during today’s call may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts, including without limitation those with respect to Arrowhead’s goals, plans and strategies, are forward-looking statements. These include but are not limited to statements regarding the anticipated safety and/or efficacy of ARC-520, ARC-AAT, ARC-F12, and our other programs, as well as anticipated timing for study enrollment and completion and the potential for regulatory and commercial success. They represent management's current expectations and are inherently uncertain. Thus actual results may differ materially. Arrowhead undertakes no duty to update any of the forward-looking statements discussed on today’s call. You should refer to the discussions under Risk Factors in Arrowhead’s annual report on Form 10-K and the company’s quarterly reports on Form 10-Q for additional matters to be considered in this regard. With that said, I’d like to turn the call over to Dr. Christopher Anzalone, President and CEO of the company. Chris?

Thanks, Vince. Good afternoon, everyone, and thank you for joining us today. During the recent period, we made important progress on our clinical candidates ARC-520 for chronic hepatitis B infection and ARC-AAT for liver disease associated with alpha-1 antitrypsin deficiency. We also made good progress on our preclinical pipeline and the underlying DPC delivery platform. I'll discuss a few of these highlights and then hand the call over to Bruce Given, our Chief Operating Officer and Head of R&D, who will provide an overview of our clinical programs, followed by Kim Myszkowski, our Chief Financial Officer, who will give review of the financials for the fiscal 2015 third quarter. Before I talk about highlights from the quarter, I want to announce our plan to hold an Analyst and Investor Day on September 24, 2015 to discuss our 520 in detail and provide data from the clinical program and from a non-clinical study in chronically infected chimpanzees. We’ve learnt a great deal of our ARC-520 and the biology of hepatitis B during the course of our chimpanzee study that spanned over a year, as well as from our Phase 2a clinical study. As we discussed in our last conference call, the Phase 2a include four cohorts at doses 1, 2, 3 and 4 milligrams per kilogram and was then expanded to include three additional cohorts. These additional cohorts were designed to test some of the hypothesis that emerged from our research program, including the chimp study. We think the format of an Analyst Day will allow us to provide a more comprehensive overview of what we're learning than if we simply provide a topline results in a press release. Some of what we have learned was rather surprising to us and our advisors. We believe that our work represents a real…

Thank you, Chris, and good afternoon, everyone. We typically talk about the ARC-520 clinical studies in terms like Phase 2a, Phase 2b and Heparc-2002. But I don’t think we've ever explained at one time what all these studies are. There are now multiple ongoing and initiating studies of ARC-520. I think that a helpful thing to do for our investor is to briefly describe each study and identify them by description and study number to help ensure everybody has a clear picture about what we are talking about when we refer to a specific study. A copy of the prepared remarks for this call will be available on the events page of our website if you want this description for future reference. Heparc-1001 was our initial Phase 1 single dose-escalation study of ARC-520 administered intravenously to healthy adult males and females. This was conducted in Australia and is complete. The purpose was to assess safety, tolerability and pharmacokinetics. Heparc-2001 is a multicenter, single-dose escalation study of ARC-520 administered to patients with chronic immune active HBV infection maintained on entecavir therapy. This is the ongoing study that we typically referred to as our Phase 2a study as being conducted in Hong Kong. There were four initial cohorts who have received ARC-520 doses of 1, 2, 3 or 4 mgs per kg, and then an additional three cohorts were subsequently added. We plan to discuss what these three new cohorts are and overall results from all seven cohorts at our Analyst Day in September. This study is designed to give us an indication of early activity and determine tolerability in a patient population. Heparc-2002 is a Phase 2b multicenter, multidose study to determine the depth of hepatitis B surface antigen reduction following ARC-520 in combination with entecavir or tenofovir in patients with…

Thanks, Bruce. And good afternoon, everyone. As we reported earlier today, our net loss for the three months ended June 30, 2015 was $15.9 million, or $0.27 per share, based on 59.5 million weighted average shares outstanding. This compares with a net loss of $11.6 million, or $0.22 per share, based on 51.9 million weighted average shares outstanding for the three months ended June 30, 2014. Total operating expenses for the three months ended June 30, 2015 were $16.1 million, compared to $12.7 million for the three months ended June 30, 2014. The increase in operating expenses compared to the year ago period are $3.4 million, were primarily due to higher research and development expenses of $1.1 million and higher salaries and payroll-related expenses, which also increased $1.1 million. Non-cash operating expenses for stock compensation and depreciation and amortization increased $900,000, as compared to the prior year quarter. Higher R&D costs in the quarter were driven by clinical trial expenses, primarily related to ARC-520. The increase in salary and payroll-related expenses were driven by higher headcount. Total full-time headcount at June 30, 2015 was 97, as compared to headcount of 75 at June 30, 2014. Net cash used in operating activities during the third fiscal quarter was $13.1 million, compared with $9.8 million in the prior year period. Cash used in operating activities during the quarter were primarily composed of research and development costs, mostly program cost for ARC-520 and program cost for ARC-AAT, as well as R&D salary and wages and related discovery research costs, as well as general and administrative costs, including salary costs. The primary drivers of the change in cash used in operating activities during the current period, as compared to fiscal 2014, is consistent with the drivers for the change in operating expenses aside from non-cash charges. Turning to our balance sheet, at June 30, 2015, including our investments in fixed income securities, our cash and investments balance was $111.6 million, a decrease of $16.8 million from March 31, 2015. Our cash and investments at September 30, 2014 was $177.3 million. During the quarter the company made the final payment of $3 million to Novartis related to the asset acquisition that closed in March of this year. Excluding this $3 million payment, our net change in cash and investments during the quarter was $13.8 million. Our common shares outstanding at June 30, 2015 were 59.5 million, which increased from 54.7 million at September 30, 2014 primarily due to the issuance of 3.3 million shares for the Novartis asset acquisition. Also at June 30, 2015 there were 15,652 shares of preferred stock outstanding. These preferred shares are convertible into 2.7 million shares of common stock. Common shares outstanding, including the conversion of our preferred shares, would be 62.2 million. With that brief overview, I’ll now turn the call back to Chris.

Thanks, Ken. With the Analyst Day presentation new multiple dose studies of ARC-520, initial healthy volunteer and patient data of ARC-AAT, progress of ARC-F12 towards the clinical, and data from our growing pipeline all on horizon, it is shaping up to be an exciting second half of the year for us at Arrowhead. We see all of these as substantial near and long-term value drivers for our shareholders. I would now like to open the call to questions. Operator?

[Operator Instructions] Our first question comes from the line of Michael Yee from RBC Capital Markets. Please proceed with your question.

Thanks. Good afternoon. Couple of questions on the Germany and Hong Kong studies. You’re dosing -- there you’re going to start dosing, can you just describe I guess what the trigger points are to disclose the data? How are you thinking about disclosing data over what timing? Maybe walk through little of that so we can understand when we can expect to hear more on that? Second question is that on the MONARCH study, which you disclosed. You said there being combinations. Should we assume that these are combinations with interferon and you’re going to start at the low 1 to 2 milligrams? Is that the base assumption? And then last and final question is on AAT, you previously described you can get significant knockdown like 85%, 90%. I’m just trying to understand when we could start to see some of that data. I know that you’ve started the Part B? Thanks.

Okay. Michael, this is Bruce Given. I guess, there are three questions here. Let me take the middle one first, which was the question about MONARCH Heparc-2008. Certainly, interferon combinations are an important and obvious place to start, especially since the other agents that beyond the nukes of course. The other agents that we would like to think about in combination are not yet available. They haven’t gotten far enough in development to participate in the study like MONARCH yet. So at this point, initial cohorts in MONARCH will be interferon-based. And I think at this point until we have information from multiple dose setting that we need to go higher than 1 or 3 mg per kg, I think we will be starting probably at the 2 mg per kg dose in MONARCH, but we wouldn’t hesitate to increase the dose if we thought that that would give us more knockdown. The value of MONARCH, one of the important values of MONARCH is that, it’s a trial that allow us to be quite iterative and quite adaptive in response and intend. So that’s certainly possible. But at this point, we don’t know under multiple dose conditions, whether there would be any value from going higher. I will take the AAT question next. And you asked the question of when would we be seeing knockdown in that range of 85% to 90%? That of course presumes that humans are going to behave like primates and mice, and that’s where the natural floor is. Keep in mind unlike some of the places where we work in RNA -- and these hepatic RNAi targets, AAT is produced outside the liver and not only in the liver. So for products that are truly liver, liver targeted, we don’t know what the floor is…

Okay. Thank you.

Our next question comes from the line of Ted Tenthoff from Piper Jaffray. Please proceed with your question.

Great. Thank you very much for the thorough update. Just two fact checking questions. The 2002 and the 2003 studies one in Germany and HK and ultimately, South Korea, are they for weekly doses did you say?

No. We said four doses given every four weeks, so basically monthly doses, Ted.

Okay. Great. Sorry about that. Thanks. And then the all four study, is that the U.S. study that has just been kind of cleared to begin at 1 mg per kg?

That’s right. That’s the study that we worked out with the FDA.

Yes. And how many doses are the -- in that study had disclosed. I know it’s very big dosing, but rhyme on it.

Yes. There will be three monthly doses.

Three months. Okay. Awesome. Thank you. Very much looking forward to the Analyst Day in September and learning more about these new discoveries that you guys are making on the field.

Thanks, Ted.

[Operator Instructions] And our next question comes from the line of Eun Yang from Jefferies. Please proceed.

Hi. This is Carmen in for Eun. Thanks for taking the questions and congratulations on the quarter. So first in the Phase 2a trial of ARC-520, I know you’re expecting to see some data in September. But would you be able to give us any kind of directional color on whether you’re seeing a dose response an HB surface antigen reduction in the 3 and 4 milligram doses as compared to 1 and 2 milligrams?

It’s actually a hard question to answer because we’re still blinded. Those cohorts and cohort five are double-blinded cohorts there. They're all blinded. They’ll be unblinded before the Analyst Day on September 24th and then we’ll be able to answer that question. The last two cohorts, cohorts six and seven are both open-label cohorts, so we’ll be able to provide current data for those on the Analyst Day. But the 3 and 4 mg per kg cohorts and the E negatives are still blinded.

Okay. Thanks. And just to clarify, sorry if I missed it, where will the MONARK trial be run?

Yeah. Are we disclosing that?

We will not disclose that.

Yeah.

Okay. No problem. And for the Phase 2b multiple dose trials that’s, 2004, 2003 and 2002, has dosing began in those?

So, we are actively screening in 2004. All of the centers are up and running and screening. 2002 and 2003 are at this point, the European centers, as you might imagine are basically not enrolling in clinical trials because it's the summer vacation season. And even if the investigators are around then the research pharmacists aren’t around or it's just not feasible to start to study in August in Europe. In Hong Kong, we could get started but we're focusing on completing our enrollment in 2001 rather than turning those centers on to enroll for 2002 to 2003. So we would expect that they'll start enrolling probably in September.

Okay. And on 2002 and 2003, you mentioned that those would be testing 1 and 2 milligram per kilogram doses and in 2004 also be testing that 2 milligram per kilogram dose?

It's currently designed just to do the 1 mg/kg dose and then get back to the FDA.

Okay. And then lastly for the Phase 2b combination trials, can you give us any additional details on the dose and for a combinations with immune modulators that you plan to use interferon, anti-PD-1 or something else?

Well, as I had said to Michael, interferon does figure into some of the early cohorts there. So do classic nukes. We’ve been giving a lot of consideration to other potential combinations or even with some discussions with other potential collaborators in that regard. But as I said, there actually are very few products out there that are in a position to be able to collaborate. But we sort to have our -- we have our thoughts, our thoughts about what might be the next best combination agents to think about putting cohorts in. We’ve discussed these with our clinical advisory board. They’re pretty excited about some of the ideas as well. But at this point, early cohorts interferon and the nukes are going to be the original starting point, I think is fair to say.

And keep in mind that the goal of MONARCH here is to find the recipe to get us to functional cures. Once we find that recipe, we’ll then blow that out with larger studies of course. And we are taking an open architecture approach to finding that recipe. We are bit agnostic as to what combinations will do as long as they appear to be safe and they make sense theoretically. We will try those combinations.

Okay. Got you. Thank you very much.

Welcome.

This concludes our today’s Q&A session. I’d like to turn the call back over to Mr. Anzalone for any closing remarks.

Thanks very much. Thank you for joining us on the call today. We look forward to talking to you again on September 24th.