Arrowhead Pharmaceuticals in Pasadena has finalized its global licensing and collaboration agreement with Sarepta Therapeutics, securing an immediate $500 million upfront payment, according to a joint statement issued last week.
The partnership, initially revealed last November, includes an additional $325 million through Sarepta’s purchase of Arrowhead common stock at $27.25 per share, according to regulatory filings.
The agreement encompasses multiple clinical-stage programs targeting rare genetic disorders, with Arrowhead eligible to receive tiered royalties on commercial sales up to the low double digits.
The company’s clinical programs include ARO-DUX4 for facioscapulohumeral muscular dystrophy, ARO-DM1 for type 1 myotonic dystrophy, ARO-MMP7 for idiopathic pulmonary fibrosis, and ARO-ATXN2 for spinocerebellar ataxia 2.
Arrowhead will receive $250 million in staged annual payments of $50 million over five years, with potential additional earnings of $300 million tied to ongoing clinical trials.
The collaboration leverages Arrowhead’s RNA interference technology, which treats intractable diseases by silencing specific genes, inducing rapid and durable knockdown of target genes.
Under the terms, Arrowhead maintains responsibility for manufacturing clinical drug supplies and commercial products for the four programs currently in clinical trials.
The deal structure includes development milestone payments ranging from $110 million to $410 million per program, plus sales milestones between $500 million and $700 million.
Sarepta gains rights to propose up to six new central nervous system or muscle targets, with Arrowhead conducting discovery and preclinical development before transferring licenses.
The agreement’s closing followed the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other standard conditions.
The statement said Arrowhead’s preclinical pipeline includes ARO-HTT for Huntington’s disease expected in 2025, and ARO-ATXN1 and ARO-ATXN3 for spinocerebellar ataxia planned for 2026.