Ladies and gentlemen, welcome to the Arrowhead Pharmaceuticals Conference Call. [Operator Instructions] I will now hand the conference over to Vincent Anzalone, Vice President of Investor Relations for Arrowhead. Please go ahead, Vince.

Thank you. Good afternoon everyone and thank you for joining us today to discuss Arrowhead’s results for its Fiscal 2023 Second Quarter Ended March 31, 2023. With us today from management are President and CEO, Dr. Christopher Anzalone, who will provide an overview of the quarter; Dr. Javier San Martin, our Chief Medical Officer, who will provide an update on our mid and later-stage clinical pipeline; Dr. James Hamilton, our Chief of Discovery and Translational Medicine, who will provide an update on our earlier stage programs; and Ken Myszkowski, our Chief Financial Officer, who will give a review of the financials. In addition, Tracy Oliver, our Chief Commercial Officer and Patrick O’Brien, our Chief Operating Officer and General Counsel, will be available during the Q&A portion of the call. Before we begin, I would like to remind you that comments made during today’s call 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 fact are forward-looking statements and are subject to numerous risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements. For further details concerning these risks and uncertainties, please refer to our SEC filings, including our most recent annual report on Form 10-K and our quarterly reports on Form 10-Q. I’d now like to turn the call over to Chris Anzalone, President and CEO of the company. Chris?

Thanks, Vince. Good afternoon, everyone and thank you for joining us today. In 2017, we introduced our proprietary TRiM platform. We believe then that it could become an industry leading RNAi platform for hepatocyte focused therapies and importantly, one that could bring RNAi outside the liver. This was based entirely on our competence and the potential of the science At the time, we had no clinical programs, a single partner, and our stock was trading for less than $2. Six years later, we have 12 individual drug candidates in clinical studies targeting two different organ systems, 3 ongoing Phase 3 studies, 5 strong partners, a healthy balance sheet and a reason to believe that the next 6 years will be characterized by even more rapid growth. We expect to have at least 14 drug candidates in clinical trials by the end of this year targeting 3 different organ systems, liver, lung, and CNS. [Going to] [ph] muscle targeting programs could grow this to 16 individual drug candidates across 4 different organ systems in 2023, a partner and opportunities make that a bit more difficult to predict and I will touch on that later in the call. We are well on our way to reach our 2025 goal to grow our pipeline of RNAi Therapeutics to a total of 20 clinical stage or marketed products in the year 2025. I do not believe there is a company on the planet that can match this. We've made substantial progress over the past quarter and since our last call. Let's start with pulmonary. We recently disclosed early top line data for ARO-RAGE in normal healthy volunteers. The data were very encouraging and indicated a high level of target gene knockdown with a long duration of effect in a well-tolerated manner. James will talk…

Thank you, Chris, and good afternoon, everyone. Before I go into the mid and late stage cardiometabolic studies, I want to quickly review the status of the fazirsiran, our investigation [RNAi therapeutic] [ph] has been developed in partnership with Takeda for the treatment of liver disease associated with alpha-1 antitrypsin deficiency. During the last quarter, we reported data demonstrating that patients receiving 25, 100, or 200 milligrams of fazirsiran who have baseline fibrosis achieved a dose dependent mean reduction in serum Z-AAT concentration at week 48 of 74%, 89%, and 94% respectively, leading to dramatic reductions in total liver Z-AAT and PAS-D globule burden, a histological measure of Z-AAT accumulation. In addition 42% of patients showed an improvement in portal inflammation and 50% of patients achieved an improvement in fibrosis of at least one point by METAVIR stage. These data are very consistent with the prior data generated from the 2002 open label study. Subsequently, Takeda initiated and began dosing in the REDWOOD clinical study. It is a randomized double-blind placebo controlled Phase 3 trial to evaluate the efficacy and safety of fazirsiran in the treatment of AATD liver disease. Approximately 160 adult patients with METAVIR stage F2 to F4 fibrosis will be randomized 1:1 to receive fazirsiran or placebo. The primary endpoint of the study is a decrease from baseline of at least one stage of histological fibrosis METAVIR stage in the centrally liver biopsy than at week 106 in patients with METAVIR stage F2 and F3 fibrosis. Additional information on the REDWOOD study can be found at www.theredwoodliverstudy.com I also want to give a brief update on where we are with our current metabolic candidates ARO-APOC3 and ARO-ANG3. I will start with ARO-APOC3, our investigational RNAi therapeutic been developed as a treatment for patients with mixed dyslipidemia, severe…

Thank you, Javier. We have demonstrated significant progress across discovery and early development. We continue to extend the reach of our TRiM platform to new tissue types and expand our pipeline into new disease areas in which patients have inadequate treatment options. We've also rapidly and efficiently advanced multiple early clinical stage programs and continue to generate highly encouraging data using various versions of the TRiM platform, each optimized for a different cell type. I'd like to focus today on a few different areas. The pulmonary platform with recent top line data announced for ARO-RAGE; ARO-C3, our candidate for complement mediated diseases; and our emerging CNS platform with the first candidate being ARO-SOD1. Let's start with pulmonary. We have three candidates in the clinic now, ARO-RAGE, ARO-MUC5AC, ARO-MMP7, which all use the same TRiM conjugate that targets the Alpha V Beta 6 Integrin for delivery to pulmonary epithelial cells. I will talk about each individually, but we think one of the benefits of gaining an RNAi therapeutic delivery platform with increasing validation is that learnings from each program can directly inform advances in the others. So, we view de-risking events for one program such as the data we sell with ARO-RAGE as potentially de-risking to some extent to the others. ARO-RAGE is our investigational RNAi Therapeutic designed to reduce expression of the Receptor for Advanced Glycation End products or RAGE as a potential treatment for inflammatory pulmonary diseases such as asthma. We are currently conducting a Phase I/2A randomized double-blinded placebo controlled study in normal healthy volunteers, which is Part 1 and in patients with mild-to-moderate asthma, which is Part 2. The single ascending dose portion of the study includes 5 sequentially enrolled NHP cohorts with escalating single dose levels. The multiple ascending dose portion of the study includes 5…

Thank you, James, and good afternoon everyone. As we reported today, our net income for the quarter ended March 31, 2023 was 48.7 million or $0.45 per share based on $108.1 million fully diluted weighted average shares outstanding. This compares with net income of 44.4 million or $0.41 per share based on 107.9 million fully diluted weighted average shares outstanding for the quarter ended March 31, 2022. Revenue for the quarter ended March 31, 2023 was 146.3 million, compared to 151.8 million for the quarter ended March 31, 2022. Revenue in the current period primarily relates to our collaboration agreements with Takeda and GSK. Revenues recognize as we complete our performance obligations, which include managing the ongoing AAT Phase 2 clinical trials for Takeda. There remains 31 million of revenue to be recognized associated with the Takeda collaboration, which we anticipate will be recognized over the next year. Additionally, in the quarter ended March 31, 2023, Takeda dosed the first patient of its Phase 3 REDWOOD clinical study of fazirsiran, triggering a $40 million milestone payment and GSK dosed the first patient in its Phase 2b trial of GSK4532990 formally known as ARO-HSD in March triggering a $30 million milestone payment. Revenue for these milestone payments will be reflected in fiscal Q2, while cash receipt will be in fiscal Q3. Revenue in the prior period, primarily related to the recognition of $120 million associated with the upfront payment received from GSK, in addition to a portion of the payments received from our license and collaboration agreements with Takeda and Horizon. Total operating expenses for the quarter ended March 31, 2023 were 98.1 million, compared to 110.3 million for the quarter ended March 31, 2022. The key driver of this change was decreased candidate costs and lower stock compensation expense. The…

Thanks, Ken. We've already had a busy 2023 and have made a great deal of progress on many fronts. However, we anticipate that the middle and into the second half of the year will be even busier and offer even more opportunities to demonstrate what our pipeline can bring to patients. We've always been clear that we believe for RNAi to reach its full potential as revolutionary therapeutic modality, it needs to be able to address gene targets wherever they are. That is no longer a long-term goal between the liver franchise, the pulmonary franchise, the skeletal muscle franchise, the CNS franchise, and the adipose franchise. We have the opportunity to help a lot of people and create a substantial amount of value. But this is just a start. I expect us to blow through [20 and 25] [ph] and build a uniquely large and diverse pipeline of important medicines across multiple therapeutic areas. I have never been more excited about our near term prospects or more proud of this amazing team. When you combine a technology that works with talented innovators who are aligned as [ to mission] [ph] and empowered to make decisions and push science, incredible things can follow. We hope you can join us on June 1 at our R&D day to hear more. Thank you for joining us today, and I would now like to open the call to your questions. Operator?

Thank you all. [Operator Instructions].

I also want to just remind analysts that we – in the interest of time, we like to limit the questions to one question and one follow-up.

Alright. Our first question comes from the line of Maury Raycroft with Jefferies.

Thanks for taking my question. I was going to ask if you can provide some additional detail on what new data we see at the R&D day from the cardiometabolic and pulmonary program specifically? And as follow-up for the Phase 3 PALISADE study, you mentioned readout in second quarter 2024, I'm just wondering if you will report on patient baseline characteristics at the R&D day or potentially at a medical meeting this year?

Thanks, Maury. So there's – I think, there's different questions there. What are we going to be talking about the R&D day? We'll be overviewing the pulmonary programs of course and we'll give you what data we will have at the time. We expect, as I mentioned in the prepared remarks, we expect to have some early non-healthy volunteer data from MUC5AC. I don't expect that we'll have MMB7 data, but we'll – we'll also likely have a bit more of ARO-RAGE. We also – we will talk about those indications or those targets, as well as the indications. On the cardiometabolic side, it'll be a good chance for us to talk broadly about how we see ARO-ANG3 and ARO-APOC3 fitting into treatment paradigms. We'll talk a bit about a more recent data as well. We'll talk about the new CNS platform. We'll probably go into a little bit of the adipose platform a bit. We'll talk about SOD1, we'll talk about the portion of ALS that we'll be addressing with SOD1. I'm sure I'm forgetting some things. It will be a bit of a busy day. We have a lot going on as you know, Maury, and we hope to touch on most of what we're doing.

Got it. And anything additional you could say about the PALISADE study, sounds like that's moving along and you'll have that readout second quarter of next year. Will you provide more on the types of patients that you've enrolled into this study, is that something we can learn more about this year?

Sure. I think we will review the entry criteria, and that would give you a really good idea, but I don't think we're going to look at the baseline [indiscernible] and report that ahead of the end of the studies. This is a Phase 3 registration study. It is going really well. So, I will review the key inclusion criteria so you get a sense of the patient population.

Got it. Okay. Thanks for taking my questions.

Alright. Thank you. For our next caller, we have Eliana Mural with UBS. Please go ahead. Your line is now open.

Hey guys. Thanks so much for taking the question and congrats on the recent pulmonary data. Maybe just in terms of the patient cohorts that we can expect later this year. I guess, how should we think about what endpoints in particular you'll be reporting out, I guess, between, like, Feno FeV1, and what you'll be looking to see in some of that early data? Thanks.

James, do you want to address that?

Sure. Yeah. So for RAGE, we're enrolling patients with mild-to-moderate asthma and I think these are relatively small cohorts. So, they're not powered for FeV1, although we will be measuring FeV1. Some of the key biomarkers that I think could be indicative of pathway engagement that knocking down a RAGE is affecting the inflammatory pathways are things like Feno, which is an IL-13 driven parameter, where we're also measuring blood and sputum eosinophils. I think that will be interesting as well. And Periostin is also IL-13 driven. And then as you mentioned, FeV1 and spirometry.

Great. Thanks. Just a quick follow-up. I mean, maybe just what your latest thinking around what the clinically meaningful level of target not found, I'd be left to sort of select to go forward doses and how this could differ between RAGE and MUC5AC?

Yeah. So that's a really good question, that’s one that we just can't answer. No one has been able to reduce expression of MUC5AC or RAGE in the past or MMP7 for that matter. And so there's just – we don't have a good biomarker for what that [bogey] [ph] could be. We will say however though for RAGE, for instance, we were seeing Mean max knocked down after 2 doses. In the serum at least at around 80%. In the animal models that we have studied, that was more than enough to affect phenotype. These are severe models. And so that gives us some confidence. But again, they're just models. And so, we really have to wait to see in humans on what this looks like. We are excited about that level of knockdown. It's a good deep knockdown and it appears to be durable. And so, we are optimistic that that will be – that we are on the board for RAGE and for MUC and for MMP7, as well as for future targets. We believe that because this is a target rich environment, it is – it feels likely to us that if you can knock a gene product down by 80% or so that you're going to affect disease states in at least some of these targets.

Awesome. Thanks guys.

Thank you. Our next question comes from the line of Joel Beatty with Baird. One moment.

First one is, how could the profile of ARO-SOD1 potentially compare with Tofersen? And then second question is, can you provide a little more color on why I think eliminating the study of some of the PNH patients from the ARO-C3 study?

Yes, sure. Thanks for the question. So with regards to SOD1, I think that we will be competitive and likely better in terms of depth of gene target knockdown. And extremely, importantly for this route of administration for intrathecal part of the administration duration, which is key if we can do intrathecal administration every 3 or even every 6 months, I think that it would be much preferable for patients compared to every 2 weeks or every month dosing with Tofersen. And then with regards to PNH, it was really a matter of competition that PNH is a small market that's reasonably well addressed with a lot of ongoing competing clinical trials and competing marketed – pursuing to be marketed therapeutics. So, we thought that we have limited resources and best to put those resources to work elsewhere.

Great. Thank you.

Alright. Thank you so much. Our next question comes from the line of Mani Foroohar. I'm sorry, did I say your name properly?

Close enough. Thanks for taking my question.

With SVB, go ahead. Sorry.

So, I want to dive in a little bit on some of the modeling impact financially, the updates you've given us. Obviously, you've got your NASH program back in your hand out of the HPVs remains in the J&J's hands. You've talked about moving a number of other assets forward, CNS. How should we think about what this means for the tempo of CapEx and OpEx going forward from here? And to what extent is that already contemplated in the commentary you gave us last quarter and prior around ramping CapEx and OpEx spend to drive growth?

Sure. I don't – this was already factored into our plans over the next few years. I don't think anything that's happened over the last couple of quarters has materially changed change those things. We are growing so fast now, Mani, as you know. And we've got 12 clinical programs, 7 of them are wholly-owned. I think we'll have 14 to 16 clinical programs by the end of this year. We have an awful lot of opportunity to partner judiciously. That's – as you know, that's an important part of our model. I believe that we are going to have 20 clinical programs or marketed products by 2025 and no company, I don't think certainly not a company our size can commercialize all of those. And so we have an awful lot of ammunition to find good partners. To bring in non-dilutive capital and that continues to be an important part of our ongoing financial planning. I think that that job gets even easier as we expand these platforms to include CNS to include skeletal muscle, pulmonary adipose. We've got an awful lot of opportunity to find good partners, but while still holding on to a very large number of, we think potentially important medicines to drive value for us.

Okay. That makes a lot of sense. Thank you.

Sure.

Alright. Thank you so much. Alright. One moment. Our next question comes from Mayank Mamtani with B. Riley Securities. Your line is now open.

Good afternoon and thanks for taking our questions. Just maybe on MUC5 and ARO-RAGE, just can you clarify how long or is the chronic tox data available from that – from the preclinical study standpoint? And then at a high level, like the differences between the candidate design delivery, I know the PD market is clear for – clearer for RAGE, but is there anything that we can glean from the different programs that help us think about the de-risking that is underway for the pulmonary delivery? And then I have a quick follow-up.

Sure. The chronic tox is not complete – those are ongoing. And then the next question is what is de-risking events? Well, James, do you want to address? Want to address more data through this year. We'll have – we will look at – we will have more data on knockdown healthy volunteers shortly. We'll have patient data late this year, and then we'll have the chronic tax data. I guess all of those are somewhat – are incrementally de-risking. We feel really good about the changes we've made in ARO-RAGE, ARO-MUC5AC, ARO-MMP7, compared to ARO-ENAC a year ago. These are substantially more potent constructs. We're using in broad terms, and James correct me if I’m wrong here. Around [1 mg per kg] [ph] is at this fourth dose that we reported on. A little less than [1 mg per kg] [ph]. And as you may recall, Mayank, in the pulmonary day a year plus ago, around a year ago, I guess, we graphed the various top studies and where we started to see local lung inflammation and over 6 months. And the cumulative the cumulative doses around 100 mgs per kg where we started to see that inflammation. And so, we feel like we are in good shape here that we should be substantially underneath that for RAGE. We'll see where we are with MMP7 and with MUC, but at least so far the data we've seen it's encouraging to us that we have something that's extraordinarily more potent than ARO-ENAC. And again remember, I mean again, I know you will recall this. Our dosing for ARO-ENAC was with three daily doses every two weeks. For ARO-RAGE we are once a month and as James pointed out, we have data out through 6 weeks and we are still seeing a deep knockdown. And so this may not be once a month dosing, maybe once every 2 months dosing and then maybe once every 3 months dosing. So, we feel like we're in good shape here.

Great. Yes. Look forward to seeing more of the R&D day. And then just another high level question. As you've decided on DUX4 muscle, for externalization and not maybe on SOD1 and CNS. So, I mean how are you thinking about which muscle types to go forward with internally versus externally? And for DUX4 muscle, skeletal muscle, are they like kind of deal analogs that exist out there for the kind of value you might be looking for? Thanks for taking our questions.

Sure. So, let me be clear. We've not made a decision on partnering in ARO-DUX4. We were gearing up to file CTA. We are ready to go. If we even had chronic tox [indiscernible], as I mentioned, and we had substantial interest from several companies and we decided to press pause and see where those go. And so that's where we are right now. We'll see if those – if any of those turn into an actual deal, if they do, that's great. We know hopefully we'll find the right partner for that. If not, that's great too because we believe in the drug, we believe in the platform, and we'd be happy to push that into the clinic ourselves. It just made sense for us to wait a couple of months to see where these things go. We are in a good spot I think for not only ARO-DUX4, but also the follow-on clinical candidate. But as I mentioned, we think we'll be CTA ready in the fourth quarter. We're in a good spot where we are almost agnostic. I'm happy to bring both those to clinic ourselves, but also I'm happy to listen to offers and if there are good companies who can – who have experience in these types of – in developing these types of drugs and come up with proper value than we have we're happy to talk about that as well.

Got it. High class problem to have. Thanks for taking my question.

You're welcome.

Alright. Thank you so much for that. [Operator Instructions] Our next question comes from Patrick Trucchio with HC Wainwright & Company. Patrick, your line is now open.

Thanks and good afternoon. Just a follow-up question on the CNS platform. I'm wondering if you can discuss the preclinical data that's been generated to date and the level of confidence in the safety profile of these sRNA constructs and delivery methods as you transition to human trials? And then secondly, I'm wondering if there's an update on the HBV program and what that collaboration may look like going forward?

I'm sure – so let me – I'll give you the high level answer to the CNS question and then and James can give you more granular answer if necessary. So, we have done the [GLP tox studies] [ph] and we feel comfortable about safety margins there. We've done exhaustive non-GLP tox studies with ARO-SOD1, as well as other potential candidates and we feel good about what we're seeing. With respect to HBV, I don't have anything to update you on now. I believe that Janssen is running their process and so I don't have any information on where that's going to be over the next several quarters.

Yes. I think I would just add on the CNS platform, we'll share more of the specific data at the Analyst Day in June. But we're seeing 80% to 90% reduction in various brain regions in both rodents and non-human primates with good duration that should support at least Q3 month dose administration and we'll share more really next month.

That's helpful. Thank you very much.

You're welcome.

Alright. Thank you so much, Patrick. Our next question comes from the line of Keay Nakae with Chardan.

Thank you. Question on top. Anything you have learned from Biogen's development to first and that you think you might be able to learn from and benefit from as you proceed into the clinics? Yes. I mean, it's very helpful to have another asset out there that's hitting the same gene target that's kind of gone through the whole process. And I think learned a lot from what they did in their early clinical studies their Phase 1/2 design and then they're pivotal as well?

Yes. And I'd like to add that the regulatory person is very, very important. And the accelerated approval based on the validated biomarker for a disease like this, I think it's huge for the field. It's really important for our program. Will enable us to go a lot faster. I think in this condition and thanks to their work, there is a very good data over the natural history of this SOD1 ALS patient looks like and also was a benchmark for efficacy both in neurofilament and also clinically. So, I think this success program opened the door for advanced – our program even faster.

Great. Thank you.

Alright. Thank you so much. And our next question comes from Prakhar Agrawal with Cantor Fitzgerald. One moment. Your line is opening up now. One moment.

Thanks for taking my questions and congrats on the quarter. The first question is on asthma for targets such as RAGE, given you're testing it in a broad population, how much benefit on lung function endpoint such as FeV1, you think you need to show to give you confidence on moving it into later phase trials trying to better understand what benchmarks are you looking at? And I had a quick follow-up.

Yes. So, James already made the point that we're not looking at efficacy data in this Phase 1 study. So, this program will require a proper Phase 2 study to show efficacy and probably FeV1. If you look at the benchmark with the biologics that are already approved with the [indiscernible], we are looking about 100 milliliters improvement, approximate FeV1. So that's the benchmark, I think, for a Phase 2 study. And that's also something that we will discuss at the Analyst Day in June 1st.

Thank you. And just curious as to the broader long-term strategy in asthma, given you have two targets, is the plan to continue developing both assets into Phase 2, Phase 3 or you could make a decision to prioritize one over the other at a certain time and what drives that decision? Thank you.

Data. It's – as with ANG3 and APOC3, look, these are two targets that are interesting. And they will – and they'll be addressing asthma in two different ways. And so we look forward to seeing how they – how patients respond to each of them. It could be that there are populations of patients who respond better to one than the other, it could be that one is superior in all patient populations. We're just going to have to wait and see. It's a good problem to have because we think we have a good opportunity for both of them to be important medicines. And so, let's just see what the data of the data show over the next couple of years.

Yes. And the other thing I would say is, MUC5AC is a very new constructive type of drug and there are other new construction diseases that are very prevalent and their memory can be very significant. So, please say we will evaluate total indications such as COPD or bronchiectasis, as well as we go along.

Alright. Thank you so much. Our next question comes from Luca Issi with RBC Capital. One moment for your line.

Thanks so much for taking my question. I have a few, maybe Chris now that you have proof of concept here, I would say for targeting agent, I should say, in lung, how are you thinking about business development? Is this a good time to find a partner? Are you hoping to further the risk of platform before you entertain BD discussions? Or are you planning to keep pulmonary in-house full stop? Any thoughts there would be much appreciated. And maybe on SOD1 ALS, can you just talk about why going after this indication? Obviously, you're a few years behind Biogen, there are only 200 to 300 patients in the United States. So, why not going after other targets with bigger TAMs like maybe [indiscernible]. So again, any thoughts there appreciated it. And then last one quickly on CapEx, if I recall it correctly, last time you mentioned that you were expecting to invest up to $200 million in CapEx to build the facility in Verona, Wisconsin, however, I think the 10-Q suggests that the number is now between 200 and 260, so wondering if you can clarify that? Thanks so much.

Sure. Thanks, Luca. Ken, you want to address the last first?

Sure. The 200 that we mentioned was the amount that we thought we were going to spend this year. The total project was anticipated to be $280 million, $290 million in total. We have spent less than the $200 million this year. We expect to spend probably around $90 million more in the second half and probably about $100 million toward that in fiscal 2024.

Okay. So the other two questions. The first one was around pulmonary partnering. So, look, we aren't rushing to partner the current three assets anytime soon or frankly even the broader platform right now. We want to learn more, we want additional data. I don't think that we should be in a hurry to do that. This is an important space for us. As we've said in the past, we don't see 2 or 3 or 4 drugs here. We see 8 or 9 or 10 drugs coming out of the pulmonary platform. There's 16,000 or so pulmonologist in the U.S. we like the idea of building a commercial infrastructure to address that market with several drugs in our own bag. Having said that, it's probably not going to be 10, 11, 12 drugs. So, there will be partnering within this platform, I think at some point, I don't think it makes sense to spend too much time on it at this point because we're still early days. But this is a good opportunity for us. Again internally to create value and to serve patients ourselves, but also to find additional partners in order to really extract proper value from this part of the TRiM platform. The second question I do with SOD1, why are you going after SOD1 instead of something else? Well, I'll tell you. We are also going after something else. We're an and company. We're not an or company. It just so happened that SOD1 popped first and we think it's a good place for us to be. We think we'll stack up well against to a first and as we talked about, it's nice to learn from somebody and accelerate our pathway because somebody went ahead of us, and then if we have a better drug for those patients, then so much better. And so, we believe in SOD1, we believe in helping those patients who need it. But that's just the first of we think many, like the pulmonary space, CNS is a target rich environment and there's no shortage of important targets that we will be going after.

Alright. Thank you so much Luca. Our last question is coming from the line of Madhu Kumar with Goldman Sachs. Oner moment while your line opens.

Hey, thanks for taking our question. So, one kind of science question and then one big strategy question. So, the science question is, what do you think is the fundamental floor for sRAGE and the serum from extrapulmonary resources? Basically, how far do you think serum sRAGE can potentially get to, if you really were to just wipe it [out in the lung] [ph]? And then conversely, what is the floor in the lung, I said in bronchoalveolar lavage for sRAGE as well. And then kind of the big picture strategy question is, kind of related to Luca's question. Effectively, like what would you need to see to really reposition the company to focus on these 8, 9 or 10 lung indications relative to the kind of current menagerie of liver directed drugs?

Sure. Yes. So the floor of sRAGE, maybe the second part of question is key here. I think measuring – if you assume that the valve sRAGE is exclusively coming from the lung, I mean the floor would be close to zero that you maybe get a small amount of sRAGE coming from endothelium or some of the other cell types, but really the most of the sRAGE in the [bowel] [ph] should be coming from the type 2 alveolar epithelial cells. Now, that doesn't mean that we'd be able to get 99.9% knockdown. I think even with our best triggers in the liver, we're getting 95% plus knockdown, so that's just not the way RNAi tends to work. In the serum, I don't think we know the answer to that really. I think the best indication are the data that we've shared so far that you can achieve 90% reduction in the blood. It's not entirely clear how much sRAGE in the blood is coming from extra pulmonary sources. Although I think it is clear that most of it is coming from the lung. So that number may vary from person-to-person or either in between healthy volunteers and asthma patients. So, I think we're still trying to sort that out, what's the floor in sRAGE in the blood. It was one of the reasons why we added an additional dose level to this healthy volunteer study.

I think we're getting very close because we already seen 90%. If you look at APOC3, AAT, that's what you see, 80%, 85%. So, I think we're getting very close to the floor. Almost complete addition.

And so, and Madhu, I'll address the second question. So, I'm just curious. So, when you talk to a J&J and Pfizer and others, do you refer to their large pipeline as menagerie of drugs? So, look, we're not going to refocus this company to be a pulmonary company. I think there's no reason to do that. We actually like this strategy of having a broad pipeline across therapeutic areas. I think we can do it in part, but I think we can do it because we are relying on well validated targets and hopefully we stay disciplined and we continue to do that. And so, ultimately I think that we can create the most value by being a relatively diversified company. Pulmonary is a [nice deep well] [ph]. And so that is a place I think that where we will have several or more of our wholly-owned drugs, but that won't be the only one.

Thanks very much.

Thanks, Madhu.

Alright. Thank you all so much for your questions. I would now like to turn it back to Chris Anzalone for our closing remarks.

Thanks very much for joining us today, and we look forward to speaking with you on June 1.

Goodbye. Alright. Making sure you all can you hear me. Thank you for your participation in today's conference. This does conclude the program. You all may now disconnect if you haven't already.