Sarepta’s troubles had nothing to do with Arrowhead’s assets, and yet both companies have seen their stock prices decline this past month. BioSpace caught up with Arrowhead’s Chris Anzalone to talk about the biotech’s role as an RNAi pipeline savior.
Arrowhead Pharmaceuticals’ shares have fallen 12% in the past month, but it had little to do with work going on at the RNA interference specialist. Instead, it was Arrowhead’s association with Sarepta Therapeutics—with which it has a partnership worth as much as $11 billion—that sowed the chaos at the markets.
“We have been caught in that downdraft as well, unfortunately,” Arrowhead CEO Chris Anzalone told BioSpace, speaking to Sarepta’s gene therapy safety drama that has been playing out over the past month. “And it’s not unreasonable. I think that people were curious about Sarepta’s ability to perform on the partnership.”
For the record, Anzalone isn’t worried about Sarepta dropping out of the alliance. He thinks the deal is too sweet for both sides. H.C. Wainwright Research agreed in a July 31 note, calling the partnership “symbiotic and mutually beneficial.”
“[Sarepta] have said quite clearly that—and I don’t want to put words in their mouth, but my interpretation is—the future of their company is based on the assets they got from us,” Anzalone said.
Indeed, Sarepta last month announced a strategic restructuring and pipeline pivot away from its legacy gene therapies and toward a handful of siRNA platform assets that are partnered with Arrowhead.
Even so, Anzalone understands why investors have been nervous. “Cash from Sarepta is a big part of our financial model over the next two years,” he said. HCW pointed out that the non-dilutive capital provided by Sarepta is key to Arrowhead’s plans to reach cash flow–positive operations by 2030.
With some explaining of what happens if Sarepta doesn’t pay, Anzalone said that investors have been reaching the place he is at right now.
“I’m almost at equivoce. The deal goes as planned. Great. The deal goes under, we get our assets back and we keep the cash. That’s also fine.”
The Future of Sarepta Is Here
Sarepta’s pipeline pivot should have been good news for Arrowhead—it was a vote of confidence for the biotech’s platform and a sign that Sarepta saw the massive partnership as its future. But a day later, the company’s months-long safety drama came to a head.
On July 18, Sarepta revealed that a third patient had died after taking one of its gene therapies. This spurred a market tumble for both companies. While Arrowhead kept its head down, Sarepta became wrapped up in a very public dispute with the FDA. Analysts began to wonder if Sarepta could keep up its commitments to Arrowhead.
The deal, signed in November 2024, is worth $825 million upfront, with as much as $10 billion possible later on through a series of consistent payments tied to enrollment and other clinical development milestones. The partnership is focused on rare genetic diseases of the muscle, central nervous system and lung, with two key Phase I muscular disease programs: ARO DM1 for type 1 myotonic dystrophy (DM1) and ARO-DUX4 for facioscapulohumeral muscular dystrophy type 1 (FSHD1). The deal also includes two other clinical-stage therapies and three preclinical programs.
Arrowhead has been working swiftly behind the scenes on the Sarepta programs, already meeting one of the Phase I enrollment targets for ARO DM1 that would trigger a $100 million milestone. This payment is due by the end of the fourth quarter under the terms of the agreement. Anzalone doesn’t anticipate any issues with that payout.
“I expect [Sarepta] to continue to perform, and we’ve seen no evidence that they will not,” Anzalone said. “I would read into that that they’re going to spend their last dollar to make sure that [the deal] stays intact, because it’s so important for them strategically.”
But if they don’t, Anzalone said the contract has solid termination framework, which HCW also noted. If Sarepta stops paying, the assets fall back to Arrowhead and no cash has to be returned.
“Look, I’m okay with either of those things—again, I don’t think the latter is going to happen. I think they’re going to perform,” Anzalone said. “The fail-safe here is that we get a bunch of really good assets back and move forward ourselves.” The CEO also expressed an openness to work with Sarepta in the future to tweak the deal if needed.
While the situation is a little uncertain, Anzalone said he’s confident in one thing: “These are good assets.”
Looking back at the deal process, Anzalone said he would still sign the same one today. Sarepta—which is known for its Duchenne muscular dystrophy therapies—was a natural fit for ARO-DUX4, an RNA interference (RNAi) conjugate in development for the progressive genetic muscle disease FSHD1.
Anzalone remembers the scope of the partnership growing as discussions went on with Sarepta CEO Doug Ingram. Sarepta at that time was in the initial stages of commercializing Elevidys after its June 2023 approval—before it ran into the safety problems it faces today—but had a fairly empty pipeline.
“They appear to be good at regulatory, commercial and late-stage development, but they didn’t have much of a pipeline. And we are nothing but pipeline,” Anzalone said. “So it just kind of grew. And next thing you knew, we were doing what was going to be a very large deal.”
The final terms eventually work out to somewhere around $11 billion. Besides the $100 million ARO DM1 enrollment milestone, Anzalone expects to trigger another $200 million by the end of the year for the same program, plus a $50 million milestone in February 2026 for an R&D milestone.
“We didn’t pick anybody’s pocket. This was, I think, as good a deal for Sarepta as it was for us,” Anzalone said. “This is one of those funny deals that I would be glad to take either side of the transaction.”
Data from the first Sarepta-partnered programs ARO DM1 and ARO DUX4 are expected by the end of the year, and while there’s no firm date, Anzalone suspects Sarepta’s leadership will be eager to make the results public once they’re ready. He said those data are expected to be interpretable—which is to say, investors should get their first true assessment of the programs’ likelihood of success.
“Too early data that doesn’t tell a story . . . can be confusing, but as soon as there is a nugget of a story, I’d like to put that out,” Anzalone said.
Pizza and Beer Money
The modality itself, RNAi, is derisked thanks to larger peer Alnylam Pharmaceuticals, and Arrowhead is largely seen as the next in line biopharma to capitalize on the technology.
Besides Sarepta, Arrowhead is also partnered with Amgen, GSK and Takeda and is awaiting its first FDA approval this fall for the lead candidate in its wholly owned pipeline. Plozasiran is set for a Nov. 18 decision date for possible approval in familial chylomicronemia syndrome (FCS), a rare genetic metabolic disorder that prevents the body from breaking down fats.
“[Arrowhead’s] RNAi pipeline is steadily advancing toward commercial-stage maturity, independent of partnership support,” HCW said.
With such a focus on partnering, Anzalone said it was important to the team to take plozasiran all the way alone, even though Arrowhead could have continued as just an R&D company.
With that kind of model, “you can stay capitalized and stay in what I call pizza and beer, but you can’t really make that leap to be an independent, longer-term valuable biotech company that say Vertex, Regeneron and the like have translated into,” the CEO said.
To ensure success, Anzalone said the team has bulked up with regulatory experts and is focusing on the small FCS market first.
“We, like any company who goes from an R&D-only organization to R&D plus commercial, are going to make a lot of dumb mistakes,” Anzalone admitted. “But it’s an ultra-rare indication and [has] allowed us to kind of get our feet wet and learn how to be a commercial organization.”
Afterward, Arrowhead is targeting the much larger severe hypertriglyceridemia indication with plozasiran. The therapy is currently being tested in a trio of Phase III clinical trials with completion expected in mid-2026. These readouts could pave the way for Arrowhead’s second FDA nod.
Besides the lead plozasiran program, Arrowhead has caught the obesity craze and is working on two early assets. Of the two, Anzalone is most excited about ARO-ALK7, which is meant to silence the ACVR1C gene, in turn reducing the risk of obesity-related metabolic complications. These two programs are not up for partnering, Anzalone says. Arrowhead is specifically focused on providing better weight loss and improving tolerability.
“This is the health need of our time in western economies and so the GLP-1s are a very good start, but there’s a ton of white space there.”
