Sarepta sells Arrowhead shares to fund milestone payment for DM1 drug

CAMBRIDGE, Mass. - Sarepta Therapeutics, Inc. (NASDAQ:SRPT), currently valued at approximately $2 billion in market capitalization, has sold 9,265,312 shares of Arrowhead Pharmaceuticals common stock in a privately negotiated block trade, expecting to receive at least $174 million in gross proceeds, according to a company press release. According to InvestingPro data, the company’s move comes as it faces significant cash burn, with negative free cash flow of $451 million in the last twelve months.

The biotech company also entered an agreement to transfer an additional 2,660,989 Arrowhead shares to satisfy $50 million of a $100 million milestone payment obligation triggered by progress in its SRP-1003 clinical program for type 1 myotonic dystrophy (DM1). While InvestingPro analysis shows the company maintains a healthy current ratio of 2.89, indicating strong short-term liquidity, investors seeking deeper insights can access the comprehensive Pro Research Report, available for over 1,400 US stocks.

The milestone payment was triggered following a safety review and achievement of the first predetermined enrollment target in the Phase 1/2 clinical study of SRP-1003, an investigational RNA interference therapeutic for DM1.

"The sale of our equity investment is a strategic decision to help fund this milestone but does not change our conviction in the utility of the siRNA approach," said Doug Ingram, chief executive officer of Sarepta.

Sarepta expects to release preliminary data from the Phase 1/2 study of SRP-1003 in the second half of 2025.

The company, which describes itself as a leader in precision genetic medicine for rare diseases, maintains leadership positions in Duchenne muscular dystrophy and is developing programs across muscle, central nervous system, and cardiac diseases.

The transaction represents a strategic financial move for Sarepta as it advances its clinical pipeline while managing milestone payment obligations to its development partner.

In other recent news, Sarepta Therapeutics has resumed shipments of its Duchenne muscular dystrophy drug, Elevidys, after the FDA determined that a patient’s death was unrelated to the treatment. This decision allows the company to continue providing the drug to ambulatory patients, accompanied by a healthcare provider letter about acute liver failure. Jefferies has reiterated its Buy rating for Sarepta with a $35.00 price target following this development. Freedom Broker has also upgraded the stock from Hold to Buy, raising its price target to $37.00, citing improved mid-term revenue prospects due to the resumed supply of Elevidys. Meanwhile, TD Cowen maintained its Hold rating with a $17.00 target after Sarepta’s webinar revealed similar risks of acute liver injury for both ambulatory and non-ambulatory patients. BMO Capital continues to rate Sarepta at Market Perform with a $50.00 target, noting that the company expects normal commercial dynamics by the fourth quarter. Additionally, Wells Fargo increased its price target to $50.00, maintaining an Overweight rating, as Sarepta progresses in its siRNA programs in collaboration with Arrowhead Pharmaceuticals.

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