Sarepta Sells Arrowhead Stake to Fund Milestone Payment

Core Insights - Sarepta Therapeutics (SRPT) has sold at least $174 million worth of its equity investment in Arrowhead Pharmaceuticals to fund a $100 million milestone payment related to the phase I/II study of SRP-1003 for treating myotonic dystrophy type 1 (DM1) [1][4][5] - Following the announcement, Sarepta's shares rose approximately 9%, although the stock has declined 83.2% year-to-date compared to a 2% decline in the industry [1][4] Company Developments - Sarepta entered an exclusive global licensing and collaboration agreement with Arrowhead Pharmaceuticals in February 2025, acquiring rights to four investigational RNA interference therapeutics [3] - The decision to sell equity in Arrowhead was driven by a milestone payment obligation due to the successful early enrollment and safety review of SRP-1003 [4][6] - Sarepta has sold 9.26 million shares of Arrowhead in a private sale and expects to receive at least $174 million in cash proceeds [5] Financial and Operational Challenges - The company is facing scrutiny from investors due to three patient deaths linked to its gene therapy treatments, which were attributed to acute liver failure [6][7] - Following these incidents, Sarepta suspended dosing of Elevidys for non-ambulatory patients but has since resumed shipments after FDA clearance for ambulatory patients [8][9] - To address safety concerns, Sarepta is developing a new protocol for Elevidys administration in non-ambulatory patients and plans to submit findings to the FDA [9] Strategic Restructuring - Last month, Sarepta initiated a restructuring plan aimed at saving nearly $400 million annually starting in 2026, which includes laying off 36% of its workforce [10] - The company is now focusing on its siRNA pipeline acquired from Arrowhead Pharmaceuticals as part of its strategic shift [10]