Arrowhead, Sarepta Ink Global License and Collaboration Deal for Multiple Programs

Arrowhead Pharmaceuticals, Inc. has entered into a global licensing and collaboration agreement with Sarepta Therapeutics. The deal will bring Arrowhead $825 million upfront, including $500 million in cash and an equity investment of $325 million at a 35% premium. Additionally, Arrowhead will receive $250 million in equal yearly installments over five years and is on track to earn an additional $300 million in near-term payments over the next year. Furthermore, Arrowhead stands to gain royalties from commercial sales and could receive up to $10 billion in potential future milestone payments.

The collaboration encompasses various clinical and preclinical programs targeting rare, genetic diseases affecting muscles, the central nervous system (CNS), and lungs. It also allows Sarepta to select up to six new targets for Arrowhead to focus on for discovery and preclinical development. Sarepta's expertise in precision genetic medicine for rare diseases will leverage Arrowhead's proprietary Targeted RNAi Molecule (TRiM™) platform.

Christopher Anzalone, Ph.D., president and CEO of Arrowhead, stated that this strategic agreement is pivotal as Arrowhead transitions from a development-stage company to a commercial-stage entity. The significant capital influx and potential future payments will extend Arrowhead's financial runway into 2028, supporting the launch of new drugs, including investigational plozasiran for familial chylomicronemia syndrome, potentially in 2025.

Doug Ingram, president and CEO of Sarepta, will join Arrowhead's Board of Directors, bringing substantial experience in advancing investigational medicines, building commercial organizations, and moving companies toward profitability. Ingram emphasized the synergistic relationship between Arrowhead's siRNA technology and Sarepta's expertise in delivering rare disease treatments, aiming to expedite the development of innovative treatments for patients with limited or no existing options.

Upon completion of the agreement, Arrowhead will receive a $500 million upfront payment and $325 million from Sarepta's purchase of Arrowhead stock at a 35% premium. Arrowhead will also receive $250 million over five years and potentially $300 million in near-term payments linked to the continued enrollment of certain study cohorts.

Arrowhead may earn development and sales milestone payments ranging from $110 million to $410 million and $500 million to $700 million per program, respectively. Additionally, Arrowhead will be entitled to tiered royalties on commercial sales up to the low double digits.

The agreement covers several programs under various stages of development. These include ARO-DUX4 for facioscapulohumeral muscular dystrophy type 1, ARO-DM1 for type 1 myotonic dystrophy, ARO-MMP7 for idiopathic pulmonary fibrosis, and ARO-ATXN2 for spinocerebellar ataxia 2, all currently in Phase 1/2 clinical trials. Preclinical programs include ARO-HTT for Huntington's disease, expected to be CTA-ready in 2025, and ARO-ATXN1 and ARO-ATXN3 for spinocerebellar ataxia 1 and 3, respectively, expected to be CTA-ready in 2026.

Over the five-year term, Sarepta can propose up to six new CNS or muscle targets for Arrowhead to explore. Arrowhead will handle discovery and preclinical development, with Sarepta receiving an exclusive license for clinical development and commercialization.

Arrowhead will produce clinical drug supplies for all programs stemming from the agreement and commercial drugs for the four current clinical trial programs. The transaction, expected to close in early 2025, is subject to regulatory approvals and customary conditions.

This collaboration promises to combine Arrowhead's innovative RNAi technology with Sarepta's proven track record in rare disease treatment, potentially leading to groundbreaking therapies for patients with few or no existing options.