ARROWHEAD PHARMACEUTICALS, INC.ARWR

ARROWHEAD PHARMACEUTICALS, INC. Segments Disclosure

10-KFiled Nov 25, 20252 min read
SEGMENT INFORMATION
We operate in a single segment dedicated to the discovery, development, manufacturing and commercialization of RNAi therapeutics. The Company's RNAi therapeutics are comprised of siRNAs that function upstream of conventional medicines by potently silencing messenger RNA (“mRNA”) that encode for proteins implicated in the cause or pathway of disease, thus preventing them from being made. Consistent with our operational structure, our Chief Executive Officer (“CEO”), as the CODM, manages and allocates resources on a consolidated basis at the global corporate level. Our global research and development and technical operations and quality organizations are responsible for the discovery, development, and supply of products. Commercial efforts that coordinate the marketing, sales and distribution of these products are organized by geographic region and therapeutic area. All of these activities are supported by corporate staff functions. Managing and allocating resources at the corporate level enables our CEO to assess the overall level of resources available and how to best deploy these resources in line with our overarching long-term, corporate-wide strategic goals. The determination of a single segment is consistent with the consolidated financial information regularly reviewed by the CODM for the purposes of evaluating performance, forecasting future period financial results, allocating resources and setting incentive targets.
Consistent with our management reporting, results of our operations are reported on a consolidated basis for purposes of segment reporting. The CEO evaluates performance and decides how to allocate resources based on consolidated net loss that is reported on the consolidated statements of operations and comprehensive income (loss). The measure of segment assets is reported on the consolidated balance sheets as total assets. The CEO uses consolidated net loss to evaluate income generated from the Company’s business activities in deciding how to allocate company resources (such as pursuing clinical development or entering a strategic collaboration), monitoring budget versus actual results, and establishing management’s compensation. Please refer to the consolidated financial statements for further information related to these measures of segment performance. In addition, research and development and selling, general and administrative expenses are significant segment expenses regularly provided to the CEO with the following categories:
Research and Development
Year Ended September 30,
202520242023
(in thousands)
Candidate costs$347,571 $259,280 $162,459 
R&D discovery costs66,788 74,150 55,586 
Salaries109,085 96,418 73,668 
Facilities related29,233 25,782 16,267 
Total research and development expense, excluding non-cash expense$552,677 $455,630 $307,980 
Stock compensation32,582 33,586 34,332 
Depreciation and amortization21,900 16,654 10,876 
Total research and development expense$607,159 $505,870 $353,188 

General & Administrative
Year Ended September 30,
202520242023
(in thousands)
Salaries$31,916 $27,589 $22,999 
Professional, outside services, and other53,589 24,733 20,720 
Facilities related5,625 4,116 3,415 
Total general and administrative expense, excluding non-cash expense$91,130 $56,438 $47,134 
Stock compensation30,785 40,382 43,798 
Depreciation/amortization2,028 1,941 1,617 
Total general and administrative expense$123,943 $98,761 $92,549 
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About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

Other Available Disclosures

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