Arrowhead Pharma Stock Soars Pre-Market On $825M Sarepta Licensing Deal: Retail Activity Hits Year-High

The global licensing deal includes $500 million in cash and $325 million in equity, at a 35% premium upon closing.

Shares of Arrowhead Pharmaceuticals ($ARWR) surged as much as 22% in pre-market trading on Tuesday after announcing a $825 million deal with Sarepta Therapeutics ($SRPT), which saw a 3% uptick. 

Arrowhead is also expected to report its fourth-quarter earnings after the bell. 

The global licensing and collaboration agreement includes $500 million in cash and $325 million in an equity investment, at a 35% premium upon closing, according to the company’s statement.

Arrowhead will also receive $250 million over the next five years and could earn an additional $300 million in the next 12 months.

The company is also set to receive royalties on commercial sales and may earn up to $10 billion in milestone payments over time.

The agreement covers several programs targeting rare diseases of the muscle, central nervous system, and lungs. 

Sarepta has the option to select up to six new targets for Arrowhead to develop using Arrowhead's proprietary Targeted RNA Interference Molecule (TRiM) platform,  capable of deep and durable target-gene knockdown.

According to Arrowhead, this deal provides the company with enough capital to extend its runway through 2028. The funds may also be enough to support the launch of its first commercial product, Plozasiran, by 2025. 

Retail activity around Arrowhead soared to its highest level this year, with sentiment reaching 'extremely bullish' (93/100) and chatter climbing to 'extremely high' (89/100).

In contrast, retail sentiment around Sarepta remains more subdued, rising to the 'bullish' (58/100) range, while chatter has increased to 'normal' (46/100).

Sarepta’s stock is up 22% year-to-date, whereas Arrowhead has dropped by 26%.

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