Sarepta's licensing partner Arrowhead expects near-term payments despite setbacks

Reuters

4 days ago

July 23 (Reuters) - Sarepta Therapeutics' (SRPT.O), opens new tab licensing partner Arrowhead Pharmaceuticals (ARWR.O), opens new tab said on Wednesday it expects to receive near-term milestone payments from the drugmaker despite recent setbacks, including the death of a trial patient reported last week.
Shares of Arrowhead rose nearly 4% in premarket trading. Its stock has declined 11% since Sarepta disclosed that a 51-year-old man who received its experimental gene therapy SRP-9004 died of liver failure.
Investors and analysts criticized
Sarepta for reporting the patient's death a day after it disclosed cost cutting efforts, including its plans to halt the study and layoffs. Two teenage boys who received Elevidys, Sarepta's gene therapy approved for a rare muscular dystophy, have also died of liver toxicities this year.
Sarepta's shares declined 25% in the last week, and have fallen nearly 90% so far this year. Stock fell 1.6% to $13.4 in premarket hours.
The companies entered into an agreement in late 2024, and Sarepta gained licensing rights to four of Arrowhead's early-stage experimental therapies.
"Sarepta has provided no indication of any intention to fail to fulfill any of its obligations," the Pasadena, California-based Arrowhead said.
Arrowhead expects to receive $300 million by the end of this year, related to patient enrollment for its early-to-mid stage study of ARO-DM1, which is being tested for a genetic condition.
But if Sarepta fails to make certain payments, Arrowhead would have the right to terminate the partnership, the drug developer said. Provisions of the deal allow both the parties to terminate the agreement under certain circumstances.
Bernstein analyst William Pickering said earlier in the week that there was not much reason for Arrowhead to pull out of the deal unless they find another partner, as it does not have enough financial resources to launch the therapies on its own.