Sarepta Therapeutics is paying Arrowhead Pharmaceuticals $500 million in cash, plus a $325 million equity investment, for worldwide licensing rights to seven programs—four clinical and three preclinical—in addition to a discovery partnership with six targets.
Sarepta’s equity investment in Arrowhead’s common stock represents a 35% premium to the biotech’s 30-day volume weighted average price, according to a Nov. 26 release. Over the span of five years, Sarepta is doling out an additional $250 million via annual payments of $50 million, plus offering Arrowhead the chance to bring in future milestone payments and royalties.
In exchange, Sarepta will receive exclusive worldwide licenses to four phase 1/2 assets, all of which were designed using Arrowhead’s targeted RNAi molecule (TRiM) platform. The tech is built to deliver small interfering RNA (siRNA) to multiple tissue and cell types, ramping up the RNA interference and knocking down the target genes.
More specifically, the deal gives Sarepta access to ARO-DUX4, an RNAi therapeutic designed to reduce the expression of DUX4 in skeletal muscle. The program is currently being tested as a treatment for a genetic muscle disease called facioscapulohumeral muscular dystrophy (FSHD).
The Cambridge, Massachusetts-based biopharma is also picking up rights to ARO-DM1, which is made to suppress myotonic dystrophy protein kinase (DMPK) in patients with myotonic dystrophy type 1 (DM1), also known as Steinert disease.
The third clinical program is dubbed ARO-MMP7 and targets idiopathic pulmonary fibrosis, a chronic disease that causes the lungs to scar and makes it harder to breathe.
Last up is phase 1/2-ready ARO-ATXN2, with a clinical trial set to launch in a neurogenerative disease known as spinocerebellar ataxia 2 by the end of the year.
Arrowhead will assume responsibility for the ongoing trials, with the programs then transitioning to Sarepta.
Meanwhile, Sarepta will also take on responsibility of three preclinical assets after Arrowhead wraps up Investigational New Drug (IND)-enabling activities. The programs use Arrowhead’s platform for CNS delivery and take aim at spinocerebellar ataxia type 1, spinocerebellar ataxia type 3 and Huntington's disease.
The agreement “will add meaningfully to Sarepta’s mid- and early-stage pipeline,” and complement existing work in Duchenne muscular dystrophy and limb-girdle muscular dystrophies and gene therapy, while adding on new indications, according to the company's Nov. 26 release.
What’s more—the two companies have also inked a discovery partnership in which Sarepta will nominate and Arrowhead will deliver IND-ready constructs for six targets across skeletal muscle, cardiac and CNS indications. As part of the collaboration, Sarepta will have an exclusive license to Arrowhead’s tech for developing therapeutics in a range of skeletal muscle gene targets.
The deal is expected to close in early 2025, according to the release.
Separately, Sarepta’s board has greenlit a share repurchase authorization of up to $500 million part of an “overall capital allocation strategy.”
“With the launch of Elevidys going exceedingly well, this broad siRNA collaboration with Arrowhead provides a synergistic platform to complement Sarepta’s gene therapy and gene editing engine,” Sarepta CEO Doug Ingram, who is also joining Arrowhead’s board of directors, said in the release. “The agreement affords multiple potential blockbuster opportunities, serves our strategic priorities for the remainder of the decade and beyond, and diversifies our business model across one-time therapies and chronic treatments allowing for long-term growth and success.”
“At the close of this agreement, Doug Ingram will be appointed to the Arrowhead board of directors,” said Chris Anzalone, Ph.D., president and CEO at Arrowhead. “He 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 as Arrowhead seeks the same transition.”
In September, Arrowhead shared phase 3 data on a rare metabolic disease treatment that is racing toward regulators.
The topline data centers on familial chylomicronemia syndrome (FCS) and found that people who took 25 mg and 50 mg of plozasiran for 10 months experienced 80% and 78% reductions in triglycerides, respectively, compared to 7% for placebo.
Arrowhead previously said it planned on filing for FDA approval by the end of 2024. The biotech is racing against Ionis, which is set to learn whether the FDA will approve its rival FCS drug candidate olezarsen by Dec. 19.