PASADENA, Calif.--(BUSINESS WIRE)--Nov. 26, 2024-- Arrowhead Pharmaceuticals, Inc. (NASDAQ: ARWR) today announced a global licensing and collaboration agreement with Sarepta Therapeutics (NASDAQ: SRPT). Upon closing, Arrowhead will receive $825 million, consisting of $500 million cash and $325 million as an equity investment priced at a 35% premium. Arrowhead also receives $250 million to be paid in equal installments over five years and is eligible to receive an additional $300 million in near-term payments, which Arrowhead is on track to achieve during the next 12 months. Additionally, Arrowhead is eligible to receive royalties on commercial sales and up to approximately $10 billion in future potential milestone payments.
The agreement covers multiple clinical and preclinical programs in rare, genetic diseases of the muscle, central nervous system (CNS), and the lungs, as well as allows Sarepta to select up to six new targets for Arrowhead to conduct discovery and preclinical development activities in areas complementary to Sarepta’s leadership in precision genetic medicine for rare diseases, which can utilize Arrowhead’s proprietary and differentiated Targeted RNAi Molecule (TRiM™) platform.
“For Arrowhead, this strategic transaction accomplishes several important goals that we see as critical to our success as we move from a development stage company operating in several therapeutic areas to a more focused commercial stage company over the coming years. It provides us with a transformational amount of capital immediately and the potential for significant non-dilutive cash throughout the duration of the collaboration. We estimate that this transaction extends Arrowhead’s cash runway into 2028 and potentially through multiple new drug launches, including wholly owned and partnered programs. We now turn our focus as a company to launching investigational plozasiran for the treatment of familial chylomicronemia syndrome potentially in 2025, pending FDA review and approval, which would be our first commercial product. We are also prioritizing further development of additional pipeline programs which would be complementary to plozasiran from a clinical, regulatory, and commercial perspective,” said Christopher Anzalone, Ph.D., president and CEO at Arrowhead. “With this agreement we also welcome the Sarepta team as new Arrowhead collaboration partners who bring a wealth of clinical, regulatory, and commercial expertise in key areas outside of our cardiometabolic focus. We have a very efficient drug discovery engine that continues to generate many promising programs and we have great confidence in Sarepta’s ability to take the next steps to advance and commercialize multiple Arrowhead-discovered drug candidates, which we believe have the potential to be best-in-class.”
At the close of the agreement, Doug Ingram, president and CEO of Sarepta, will be appointed to the Arrowhead Board of Directors. He is an experienced biotech and pharma executive and has led Sarepta as they advanced multiple investigational medicines through the clinical and regulatory process, built a commercial organization from the ground up, launched multiple drugs, and moved the company toward profitability. His experience and guidance will be valuable to Arrowhead as the Company seeks the same transition.
Mr. Ingram added, “The agreement marks the start of a synergistic relationship with Arrowhead’s leading siRNA technology and Sarepta’s proven success in bringing rare disease treatments to patients. Together, we will expedite the development of Arrowhead’s promising scientific approach and bring best-in-class treatments to patients with devastating rare diseases where treatment options are limited or do not exist. I am honored to serve on the Arrowhead Board of Directors and to help Arrowhead advance its extraordinary science for the benefit of patients around the world.”
Summary Financial Terms
Upon closing, Arrowhead will receive a $500 million upfront payment and $325 million through the purchase by Sarepta of Arrowhead common stock priced at a 35% premium to the 30-day volume weighted average price. Arrowhead will also receive $250 million to be paid in annual installments of $50 million over 5 years. Arrowhead also has the potential to receive $300 million in near-term payments associated with the continued enrollment of certain cohorts of a Phase 1/2 study, which Arrowhead is on track to achieve during the next 12 months.
Arrowhead is eligible to receive development milestone payments of between $110 million and $410 million per program and sales milestone payments of between $500 million and $700 million per program. Arrowhead is also eligible to receive tiered royalties on commercial sales up to the low double digits.
Summary of Programs under License and Collaboration Agreement
Clinical Stage
ARO-DUX4, which is designed to target the gene that encodes the DUX4 protein as a potential treatment for patients with facioscapulohumeral muscular dystrophy type 1, currently dosing patients in a Phase 1/2 clinical study.
ARO-DM1, which is designed to reduce expression of the dystrophia myotonica protein kinase, or DMPK, gene in skeletal muscle as a potential treatment for patients with type 1 myotonic dystrophy, currently dosing patients in a Phase 1/2 clinical study.
ARO-MMP7, which is designed to reduce expression of matrix metalloproteinase 7, or MMP7, in the lung as a potential treatment for idiopathic pulmonary fibrosis, currently dosing patients in a Phase 1/2 clinical study.
ARO-ATXN2, which is designed to silence expression of the toxic ATXN2 protein in the CNS as a potential treatment for spinocerebellar ataxia 2 (SCA2), currently in a Phase 1/2 study that is open for enrollment.
Preclinical Stage
ARO-HTT for patients Huntington’s disease expected to be CTA-ready in 2025
ARO-ATXN1 for patients with spinocerebellar ataxia 1 (SCA1) expected to be CTA-ready in 2026
ARO-ATXN3 for patients with spinocerebellar ataxia 3 (SCA3) expected to be CTA-ready in 2026
Discovery
During the five-year term, Sarepta can propose up to six new CNS or muscle targets for which Arrowhead will perform discovery and preclinical development. Sarepta would then receive an exclusive license to those programs and be responsible for clinical development and commercialization.
Drug Manufacturing
Under the agreement, Arrowhead will manufacture clinical drug supply for all programs arising out of the license and collaboration, and commercial drug product for the four programs currently in clinical trials.
The transaction is expected to close in early 2025, subject to the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions.
Gibson, Dunn & Crutcher LLP is serving as legal advisor to Arrowhead.