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Stock-Based Compensation
 12 Months Ended
Sep. 30, 2025
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation STOCK-BASED COMPENSATION
The Company has three plans that provide for equity-based compensation.
Under the 2013 Incentive Plan (the “2013 Plan”), 2,276,279 awards are granted and outstanding, relating to stock options and restricted stock awards to employees and directors as of September 30, 2025.
Under the 2021 Incentive Plan (the “2021 Plan”), 8,000,000 shares (subject to certain adjustments) of the Company’s common stock are authorized for grants of stock options, stock appreciation rights, restricted and unrestricted stock, performance awards, cash awards and other awards convertible into or otherwise based on shares of the Company’s common stock. The maximum number of shares authorized under the 2021 Plan will be (i) reduced by any shares subject to awards made under the 2013 Plan after January 1, 2021, and (ii) increased by any shares subject to outstanding awards under the 2013 Plan as of January 1, 2021 that, after January 1, 2021, are canceled, expired, forfeited or otherwise not issued under such awards (other than as a result of being tendered or withheld to pay the exercise price or withholding taxes in connection with any such awards) or settled in cash. As of September 30, 2025, 6,231,559 shares have been granted under the 2021 Plan. The total number of shares available for issuance was 2,378,770 shares, which includes 170,898 and 439,431 shares that were forfeited under the 2013 and 2021 Plans, respectively.
Under the Company’s Inducement Plan (the “Inducement Plan”), 832,950 shares of the Company’s common stock are authorized for issuance pursuant to grants of stock options, stock appreciation rights, restricted and unrestricted stock, stock units (including restricted stock units), performance awards, cash awards, and other awards convertible into or otherwise based on shares of the Company’s common stock. Awards under the Inducement Plan may only be granted to new employees of the Company in accordance with the provisions of Rule 5635(c)(4) of the Nasdaq Listing Rules. As of September 30, 2025, 660,020 shares have been granted under the Inducement Plan. The total number of shares remaining available for issuance was 255,244 shares.
In addition, prior to adoption of the Inducement Plan, the Company previously granted stand-alone inducement awards in the form of stock options and restricted stock units outside of the Company’s equity plans to new employees under Rule 5635(c)(4) of the Nasdaq Listing Rules. As of September 30, 2025, there were 598,605 and 53,713 shares underlying outstanding stand-alone inducement options and restricted stock units, respectively.
The following table presents a summary of awards outstanding attributable to Arrowhead Pharmaceuticals, Inc.:
As of September 30, 2025
2013 Plan2021 PlanInducement AwardsTotal
Granted and outstanding awards:
Options776,279 32,151 598,605 1,407,035 
Restricted stock units1,500,000 3,750,071 560,280 5,810,351 
Total2,276,279 3,782,222 1,158,885 7,217,386 
The following table summarizes stock-based compensation expenses included in operating expenses attributable to Arrowhead Pharmaceuticals, Inc.:
Year Ended September 30,
202520242023
(in thousands)
Research and development$27,320 $29,527 $34,332 
General and administrative27,528 37,570 43,798 
Total $54,848 $67,097 $78,130 

Stock Option Awards
The following table presents a summary of the stock option activity for the year ended September 30, 2025:
SharesWeighted-
Average
Exercise
Price
Per Share		Weighted-
Average
Remaining
Contractual
Term (Years)		Aggregate
Intrinsic
Value
Outstanding at September 30, 20241,978,516 $23.39 
Granted— — 
Cancelled or expired(36,341)45.44 
Exercised(535,140)7.41 
Outstanding at September 30, 20251,407,035 $28.90 3.4$19,099,141 
Exercisable at September 30, 20251,407,035 $28.90 3.4$19,099,141 
The aggregate intrinsic values represent the amount by which the market price of the underlying stock exceeds the exercise price of the option. The total intrinsic value of the options exercised during the years ended September 30, 2025, 2024, and 2023 was $6.4 million, $4.2 million and $12.2 million, respectively.
Stock-based compensation expense related to stock options outstanding for the years ended September 30, 2025, 2024, and 2023 was $0.1 million, $2.8 million and $8.4 million, respectively.
As of September 30, 2025, the pre-tax compensation expense for all outstanding unvested stock options is considered nominal.
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. The Black-Scholes option pricing valuation model was developed for use in estimating the fair value of traded options, which do not have vesting restrictions and are fully transferable. The determination of the fair value of each stock option is affected by the Company’s stock price on the date of grant, as well as assumptions regarding a number of highly complex and subjective variables. No options were granted during the years ended September 30, 2025 and 2024.
The following table provides the assumptions used in the calculation of grant-date fair values of these stock options based on the Black-Scholes option pricing model:
Year Ended September 30,
2025(5)
2024(5)
2023
Expected dividend yield(1)
— — — 
Risk-free interest rate(2)
N/AN/A
3.69% – 4.57%
Expected volatility(3)
N/AN/A86.4 %
Expected term (in years)(4)
N/AN/A6.25
Weighted-average grant date fair value per shareN/AN/A25.61
(1) The dividend yield is zero as the Company currently does not pay a dividend.
(2) The risk-free interest rate is based on that of the U.S. Treasury yields with equivalent terms in effect at the time of the grant.
(3) Volatility is estimated based on volatility average of the Company’s common stock price.
(4) The computation of expected term was determined based on safe harbor rules, considering the contractual terms of the awards and vesting schedules.
(5) No options were granted during the year ended September 30, 2025 and September 30, 2024.
Visirna ESOP: As of September 30, 2025, Visirna, a subsidiary of the Company, granted 14,612,000 stock options to its employees from the Employee Stock Option Plan (the “Visirna ESOP”), which authorizes 20,000,000 shares for issuance. The Visirna ESOP is independently managed by Visirna, including the valuation process. For the years ended September 30, 2025 and 2024, stock-based compensation expense related to the Visirna ESOP was $8.5 million and $6.9 million, respectively.
Restricted Stock Units
Restricted Stock Units (“RSUs”), including market-based, time-based and performance-based awards, have been granted under the Company’s 2013 and 2021 Plans, the Inducement Plan and as inducements awards granted outside of the Company’s equity-based compensation plans. At vesting, each outstanding RSU will be exchanged for one share of the
Company’s common stock. RSU awards generally vest subject to the satisfaction of service requirements or the satisfaction of both service requirements and achievement of certain performance targets.
The following table summarizes the activity of the Company’s RSUs:
Number of
RSUs		Weighted-
Average
Grant
Date
Fair Value
Outstanding as of September 30, 20244,913,312 $49.61 
Granted2,779,689 19.38 
Vested(1,525,693)47.15 
Forfeited(356,957)30.19 
Outstanding as of September 30, 20255,810,351 $36.97 
The fair value of RSUs was determined based on the closing price of the Company’s common stock on the grant date, with consideration given to the probability of achieving service and/or performance conditions for awards.
For the years ended September 30, 2025, 2024 and 2023, the Company recorded stock-based compensation expense of $54.9 million, $64.3 million and $69.7 million, respectively, related to shares of RSUs. As of September 30, 2025, there was $73.3 million of total unrecognized compensation cost related to RSUs that is expected to be recognized over a weighted-average period of 1.7 years.