NEW YORK – Sarepta Therapeutics on Tuesday announced it had struck an exclusive global licensing and collaboration agreement with Arrowhead Pharmaceuticals, under which it will obtain rights to multiple small interfering RNA (siRNA) therapeutics in clinical, preclinical, and discovery-stage development.
In the transaction expected to close early next year, Sarepta will pay Pasadena, California-based Arrowhead $500 million upfront and make a $325 million equity investment in Arrowhead common stock, priced at a 35 percent premium to the 30-day volume weighted average price of the company's common stock prior to the announcement of the agreement. Arrowhead will also receive $250 million in annual installments of $50 million over five years and will be eligible for potential milestone payments and royalties. Sarepta will fund the deal with cash on hand and does not plan to raise additional capital via the debt or equity capital markets.
Cambridge, Massachusetts-based Sarepta will obtain licenses to four of Arrowhead's clinical-stage programs, including ARO-DM1, which aims to suppress DMPK in skeletal muscle to treat myotonic dystrophy type 1, a muscular dystrophy that's caused by mutations in the DMPK gene, and ARO-ATXN2, which targets ATXN2 in the central nervous system to treat spinocerebellar ataxia type 2, a neurodegenerative disorder caused by mutations in the ATXN2 gene. ARO-DM1 is currently being evaluated in a Phase I/II trial, and ARO-ATXN2 is expected to enter a Phase I/II trial by year-end.
Other clinical-stage candidates that Sarepta will gain access to include ARO-DUX4, a potential treatment for facioscapulohumeral muscular dystrophy and ARO-MMP7, a potential treatment for idiopathic pulmonary fibrosis. Both drugs are under testing in Phase I/II trials. All of these clinical-stage candidates use Arrowhead's Targeted RNAi Molecule (TRiM) delivery platform, which is designed to deliver siRNAs to multiple types of tissues and cells in the body and knock down target genes.
Arrowhead will continue to be responsible for Phase I/II trials currently underway. The later-stage programs will transition to Sarepta after the completion of early-stage studies.
This deal adds meaningfully to Sarepta's mid- and early-stage pipeline, the company said, complementing its work developing gene therapies for Duchenne and limb-girdle muscular dystrophies. The US Food and Drug Administration this summer converted an accelerated approval it granted to Sarepta for its Duchenne muscular dystrophy gene therapy Elevidys (delandistrogene moxeparvovec) to a traditional approval, and expanded the indication to cover older patients, despite concerns from some agency reviewers.
Elevidys is the first gene therapy for Duchenne to reach the market in the US.
"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 President and CEO Doug Ingram said in a statement. "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."
As part of the deal, Ingram will be appointed to Arrowhead's board of directors.
"[Ingram] 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," Arrowhead President and CEO Chris Anzalone said in a statement. "His experience and guidance will be valuable as Arrowhead seeks the same transition."
The agreement also covers preclinical programs in spinocerebellar ataxia type 1, spinocerebellar ataxia type 3, and Huntington's disease, which will transition to Sarepta upon completion of investigational new drug (IND)-enabling activities. Additionally, Sarepta and Arrowhead have entered into a discovery partnership under which Sarepta will nominate up to six additional targets for muscle, cardiac, and CNS disorders.