Arrowhead, Sarepta Stocks Rise Despite Price-Target Cuts Post $1B Licensing Deal: Retail Buzz Strong
By Stocktwits Inc | First Published Nov 28, 2024, 1:08 AM ISTPiper reduced Sarepta’s price target to $182 from $200, highlighting the partnership’s near-term financial impact.
Shares of Arrowhead Pharmaceuticals Inc. ($ARWR) and Sarepta Therapeutics Inc. ($SRPT) climbed on Wednesday despite Wall Street trimming price targets after the companies announced a $1 billion licensing agreement.
Under the deal, Sarepta gains exclusive global rights to multiple programs targeting rare genetic diseases affecting muscles, the central nervous system, and lungs.
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In return, Arrowhead will receive $825 million upfront, comprising $500 million in cash and $325 million in equity at a 35% premium. An additional $250 million will be paid in installments over the next five years.
Arrowhead is also eligible for up to $10 billion in potential milestones and low double-digit royalties.
Needham lowered Sarepta’s price target to $202 from $205, maintaining a ‘Buy’ rating. But the brokerage praised the deal for its platform diversification and alignment with Sarepta’s rare genetic medicine expertise.
Piper Sandler cut Arrowhead’s price target to $45 from $62, keeping an ‘Overweight’ rating. The brokerage sees the collaboration as transformative, with Sarepta acquiring clinical and preclinical TRiM programs.
Piper also reduced Sarepta’s price target to $182 from $200, highlighting the partnership’s pipeline expansion and near-term financial impact.
Citi reduced Arrowhead’s price target to $26 from $27, maintaining a ‘Neutral’ stance. The analyst noted Arrowhead’s extended cash runway through 2028, aided by this deal and a strategic financing arrangement with Sixth Street.
Arrowhead ranked among the top 10 trending symbols on Stocktwits by Wednesday afternoon, with a good dose of optimistic retail chatter driving activity for both stocks.
However, a bearish overhang remains for Arrowhead after it missed fiscal fourth-quarter expectations on Tuesday, reporting a loss of $1.36 per share (vs. a $0.97 loss consensus) and $35 million in revenue (vs. $55.07 million expected).
Arrowhead’s CEO emphasized the company’s readiness to commercialize medicines, spotlighting the recent submission of its first New Drug Application (NDA) to the FDA for plozasiran, which could launch in 2025 pending approval.
Year-to-date, Arrowhead shares have declined over 14%, while Sarepta has surged more than 40%.
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