Arrowhead stock soars on $825M Sarepta Therapeutics deal By Investing.com
On Tuesday, Arrowhead Pharmaceuticals Inc. (NASDAQ:) shares surged 32% following the announcement of a comprehensive licensing and collaboration agreement with. Sarepta Cure (NASDAQ:). The deal, which is set to close in early 2025, will see Arrowhead receive $825 million, including a $500 million upfront fee and an equity investment of $325 million at a 35% premium. Additionally, Arrowhead is slated to earn $250 million over the next five years and could earn up to $10 billion in future milestone payments, as well as royalties on product sales.
The partnership gives Sarepta access to Arrowhead’s Targeted RNAi Molecule (TRiM™) platform to develop therapeutics for rare genetic diseases affecting the muscles, central nervous system, and lungs. Sarepta will also have the option to select up to six new targets for Arrowhead to test in clinical development.
Arrowhead’s President and CEO, Christopher Anzalone, Ph.D., highlighted the importance of the deal, saying it offers “transformational capital value” and the ability to acquire non-dilutive capital. The deal is expected to extend Arrowhead’s cash flow into 2028, supporting the launch of its investigational drug plozasiran and development of its pipeline.
In conjunction with the agreement, Sarepta’s President and CEO, Doug Ingram, will join Arrowhead’s Board of Directors, bringing his extensive experience in developing investigational drugs and launching commercial drugs.
Arrowhead is on track to receive an additional $300 million in upcoming clinical trial registration fees within the next 12 months. The company is also eligible for milestone development payments of between $110 million and $410 million per program and milestone sales payments of between $500 million and $700 million per program. Arrowhead will also earn limited profits from commercial sales.
Current clinical programs under agreement include ARO-DUX4 for facioscapulohumeral muscular dystrophy type 1, ARO-DM1 for myotonic dystrophy type 1, ARO-MMP7 for idiopathic pulmonary fibrosis, and ARO-ATXN2 for spinocerebellar ataxia 2. The preclinical programs ARO-HTT, ARO-ATXN1, and ARO-ATXN3 are expected to be ready for applications of clinical trials in the coming years.
Arrowhead will discuss the details of the deal during its fiscal year-end results conference call on Tuesday, November 26, 2024, at 4:30 pm ET. The closing is subject to regulatory approval and general closing conditions.
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