Shares of Sarepta Therapeutics SRPT rose practically 14% on Tuesday after saying that it has entered into an unique international licensing and collaboration settlement with Arrowhead Prescription drugs ARWR.
ARWR Deal Expands Sarepta’s Pipeline
Per the deal phrases, Sarepta will purchase unique rights to Arrowhead’s seven pipeline packages, which embrace 4 in lively scientific growth and the remaining three in preclinical growth. These packages are being developed in opposition to a broad vary of genetic ailments in muscle, central nervous system (CNS) and uncommon pulmonary problems.
Every of the 4 scientific packages is at the moment being evaluated by Arrowhead in separate section I/II research focusing on totally different ailments. The primary is ARO-DUX4, which is being developed as a possible therapy for sufferers with facioscapulohumeral muscular dystrophy (FSHD), whereas ARO-DM1 is being developed to deal with myotonic dystrophy sort 1 (DM1). The remaining candidates, ARO-MMP7 and ARO-ATXN2, are being developed to deal with idiopathic pulmonary fibrosis (IPF) and spinocerebellar ataxia 2 (SCA2) indications, respectively.
Arrowhead will stay liable for the continued scientific research. As soon as these research are full, Sarepta will assume duty for the later levels of growth.
Sarepta will assume duty for 3 preclinical belongings following the completion of the investigational new drug (IND)-enabling actions by Arrowhead. These packages goal spinocerebellar ataxia sort 1, spinocerebellar ataxia sort 3 and Huntington’s illness.
As a part of this deal, the businesses have additionally fashioned a discovery collaboration below which Sarepta will choose six targets throughout skeletal muscle, cardiac and CNS areas, and Arrowhead will develop and ship IND-ready constructs for these targets.
Monetary Phrases of the Sarepta-Arrowhead Deal
In alternate for buying these rights, Sarepta will make an upfront cost of $500 million plus an fairness funding of $325 million in Arrowhead’s widespread inventory. The corporate will even pay $250 million in annual installments over the following 5 years.
Per Arrowhead, it has the potential to earn a further $300 million via near-term scientific trial enrollment-related milestone funds. Additionally it is eligible for future milestone funds of as much as $10 billion, in addition to royalties on product gross sales.
Sarepta additionally clarified that it’s going to fund the cope with its current money steadiness and has no plans to lift extra capital. The deal is anticipated to shut early subsequent yr, topic to customary guidelines and rules.
Different Bulletins by SRPT
The corporate’s president and CEO, Doug Ingram, is ready to affix Arrowhead’s board of administrators.
Alongside the above information, Sarepta additionally introduced that its board of administrators has licensed a share repurchase program of as much as $500 million of the corporate’s excellent widespread inventory over the following 18 months.
SRPT Inventory Efficiency
Wall Road was impressed with Sarepta’s licensing deal. If the deal is efficiently closed, it might add potential therapies that not solely complement the corporate’s pipeline of muscular dystrophies but in addition broaden into new indications.
Some analysts additionally opined that the corporate financing the cope with the prevailing money steadiness and popping out with a brand new buyback program illustrates administration’s confidence within the industrial potential of its at the moment marketed therapies, particularly the not too long ago authorized DMD gene remedy Elevidys.
Yr thus far, Sarepta Therapeutics’ shares have risen 35.3% in opposition to the industry’s 7.9% decline.
Picture Supply: Zacks Funding Analysis
Sarepta’s Sturdy Industrial Portfolio
Sarepta’s industrial portfolio consists of three authorized RNA-based PMO therapies — Exondys 51, Vyondys 53 and Amondys 45 — and the one-shot gene remedy Elevidys, all focusing on DMD indication.
At the moment, Elevidys is the primary and solely one-shot gene remedy for DMD in the US. Since its industrial launch final yr in June, the gene remedy has demonstrated blockbuster potential. Sarepta has added round $437 million in product gross sales within the first 9 months of 2024. As compared, the remedy generated over $200 million in gross sales final yr.
Elevidys has been developed by Sarepta in collaboration with pharma large Roche RHHBY. Sarepta and Roche entered right into a licensing settlement in 2019 to develop Elevidys. Per the settlement, RHHBY has unique rights to launch and commercialize Elevidys in ex-U.S. markets.
Aside from Elevidys, Sarepta has three different therapies in its industrial portfolio focusing on the DMD affected person inhabitants. Exondys 51 is the primary authorized disease-modifying remedy for DMD in the US in addition to the corporate’s first product to obtain advertising approval. Exondys 51 recorded spectacular gross sales progress previously few quarters regardless of the COVID-19 pandemic. Vyondys 53 and Amondys 45 have additionally seen sturdy demand since their launch. Per administration, these three medication have the potential to handle practically a 3rd of all sufferers with DMD in the US.
Administration can also be gearing as much as submit a regulatory submitting with the FDA subsequent yr looking for approval for gene remedy candidate SRP-9003 in sufferers with limb-girdle muscular dystrophy sort 2E/R4 (LGMD2E/R4, or beta sarcoglycanopathy).
Sarepta Therapeutics, Inc. Worth
Sarepta Therapeutics, Inc. price | Sarepta Therapeutics, Inc. Quote
SRPT’s Zacks Rank
Sarepta Therapeutics at the moment carries a Zacks Rank #2 (Purchase). You may see the complete list of today’s Zacks #1 Rank stocks here.
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