Arrowhead Pharmaceuticals raises $700 million in convertible notes

Arrowhead Pharmaceuticals Inc. (NASDAQ: ARWR) issued $700 million in convertible senior notes due 2032 on January 12, 2026, according to a company statement. The notes carry a 0.00% interest rate and do not accrete in principal amount.

J.P. Morgan Securities LLC and Jefferies LLC served as underwriters for the offering. The underwriters exercised their full over-allotment option to purchase an additional $75 million in notes, which was included in the total issuance amount.

The notes will mature on January 15, 2032, unless earlier repurchased, redeemed or converted. Noteholders may convert their notes into common stock at an initial conversion rate of 11.4844 shares per $1,000 principal amount, representing a conversion price of approximately $87.07 per share.

Before October 15, 2031, conversion rights are limited to certain triggering events. After that date, noteholders may convert at any time until two trading days before maturity. Arrowhead may settle conversions using cash, common stock or a combination of both.

The company may redeem the notes starting January 16, 2029, provided its stock price exceeds 130% of the conversion price for at least 20 trading days during a 30-day period. The minimum redemption amount is $75 million unless all outstanding notes are redeemed.

If certain fundamental changes occur, noteholders may require Arrowhead to repurchase their notes at par value plus any accrued special interest. The notes rank as senior unsecured obligations but are effectively subordinated to any secured debt and structurally subordinated to subsidiary obligations.

U.S. Bank Trust Company, National Association serves as trustee for the notes under an indenture dated January 12, 2026.

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