Sarepta Therapeutics, Inc. (NASDAQ: SRPT), a leader in precision genetic medicine for rare diseases, has announced an exclusive global licensing and collaboration agreement with Arrowhead Pharmaceuticals, Inc. (NASDAQ: ARWR). Under this agreement, Sarepta will gain exclusive global rights to several clinical, preclinical, and discovery-stage programs targeting rare genetic diseases affecting the muscle, central nervous system (CNS), and lungs.
This partnership strengthens Sarepta’s already robust pipeline, particularly in Duchenne muscular dystrophy (DMD) and limb-girdle muscular dystrophies (LGMD), while expanding into additional therapeutic areas. The agreement includes the appointment of Doug Ingram, Sarepta’s president and CEO, to Arrowhead’s Board of Directors.
Key Clinical Programs
The agreement encompasses several clinical-stage programs, including:
- ARO-DUX4: A program designed to reduce the production of the DUX4 protein in skeletal muscle, which is currently in a Phase 1/2 clinical trial for facioscapulohumeral muscular dystrophy (FSHD).
- ARO-DM1: Targets myotonic dystrophy protein kinase (DMPK) in skeletal muscle, with a Phase 1/2 clinical trial for myotonic dystrophy type 1 (DM1).
- ARO-MMP7: Aimed at reducing matrix metalloproteinase 7 (MMP7) expression in pulmonary epithelial cells, currently undergoing Phase 1/2 clinical trials for idiopathic pulmonary fibrosis (IPF).
- ARO-ATXN2: Targets ataxin-2 (ATXN2) in the CNS, with a Phase 1/2 clinical trial for spinocerebellar ataxia 2 (SCA2) expected by the end of 2024.
These programs utilize Arrowhead’s proprietary Targeted RNAi Molecule (TRiM™) platform, designed to deliver siRNA to various tissue and cell types, enabling rapid and durable gene knockdown.
Preclinical Programs
The collaboration also covers preclinical programs leveraging Arrowhead’s TRiM CNS delivery platform for subcutaneous administration, including:
- ARO-ATXN1: Targets ataxin-1 for SCA1.
- ARO-ATXN3: Targets ataxin-3 for SCA3.
- ARO-HTT: Aimed at targeting huntingtin (HTT), the gene linked to Huntington’s disease.
Additionally, Sarepta and Arrowhead will collaborate on discovering up to six more muscle, cardiac, and/or CNS targets, utilizing Arrowhead’s novel delivery technologies.
Strategic Benefits and Future Plans
This collaboration provides Sarepta access to Arrowhead’s leading RNA interference (RNAi) platform, complementing its gene therapy and gene editing strategies. Doug Ingram emphasized the potential for this partnership to generate “multiple potential blockbuster opportunities” and diversify Sarepta’s business model by combining one-time therapies and chronic treatments for sustained growth.
“We are excited to partner with Arrowhead, who has demonstrated excellence in siRNA technology. We look forward to advancing treatments for devastating genetic diseases with significant unmet needs,” said Ingram.
Financial Terms
Under the terms of the agreement, Sarepta will make an upfront payment of $500 million and an equity investment of $325 million in Arrowhead common stock, at a 35% premium to the 30-day volume weighted average price prior to the agreement’s announcement. Arrowhead will also receive an additional $250 million in annual installments over five years, with potential future milestone payments and royalties. Arrowhead is responsible for the Phase 1/2 trials currently in progress, while clinical-stage programs will transition to Sarepta once these trials are complete.
Share Repurchase Program
In addition to the collaboration, Sarepta’s Board of Directors has authorized a $500 million share repurchase program to be executed over the next 18 months. This program will be based on market conditions and other factors as evaluated by the company’s management.
Closing and Expected Timeline
The transaction is expected to close by early 2025, following regulatory reviews. Sarepta will fund the agreement with cash on hand, with no plans to raise additional capital through debt or equity offerings.
Sarepta’s Ongoing Mission
Sarepta is focused on developing precision genetic medicines to treat rare, life-altering diseases. With leadership in DMD and LGMD, the company is advancing more than 40 programs in gene therapy, RNA therapies, and gene editing. Their strategic initiatives are aimed at driving innovation and providing transformative treatments to patients.
Investor Call
Sarepta will host a conference call on November 26, 2024, to discuss this agreement. Interested parties can access the call via webcast, with a replay available on the company’s investor relations website.
This collaboration with Arrowhead strengthens Sarepta’s position in advancing cutting-edge treatments for genetic diseases, marking an important step in its long-term strategy for growth and innovation.
