Sarepta's RNA Therapy for DM1 Progresses, Triggering $200M Milestone Payment to Arrowhead

Sarepta Therapeutics has announced positive developments in its phase 1/2 trial for SRP-1003, a small interfering RNA (siRNA) therapeutic targeting type 1 myotonic dystrophy (DM1). The progress has resulted in a significant milestone payment to partner Arrowhead Pharmaceuticals and has been met with enthusiasm from industry analysts.

Trial Progress and Safety Update

Sarepta reported that two cohorts receiving escalating doses of SRP-1003 have completed treatment, with a third cohort now fully enrolled. This enrollment milestone has triggered a $200 million payment to Arrowhead Pharmaceuticals, due within 60 days.

Importantly, a pre-specified drug safety committee has delivered a positive analysis of the therapy, allowing Sarepta to proceed with additional dose escalation groups. Patients are currently being dosed in a fourth cohort, with plans to initiate dosing in a final group early next year.

Leerink Partners analysts view this safety update favorably, particularly in light of previous safety concerns with other DM1 therapies and oligonucleotides. The analysts noted, "As we have frequently seen safety as a speed bump for other DM1 therapies, as well as oligonucleotides broadly, we view the incremental safety update favorably for the SRP-1003 program."

Financial and Strategic Implications

The positive news has had an immediate impact on Sarepta's stock, which rose 5% from $17.76 to $18.71 per share following the announcement. This development comes at a crucial time for Sarepta, which has been navigating financial challenges and restructuring efforts in recent months.

In November 2022, Sarepta entered into a significant partnership with Arrowhead, paying $500 million upfront and investing an additional $325 million for rights to seven programs. The agreement includes $300 million in milestone payments tied to the DM1 study's enrollment, of which $100 million was already paid in July 2023.

Sarepta's recent financial maneuvers, including the sale of Arrowhead shares and debt refinancing, appear to be part of a broader strategy to address its 2027 debt obligations and extend its cash runway. The company's focus on siRNA therapies, following the discontinuation of several gene therapy programs, underscores the importance of the SRP-1003 program to Sarepta's future pipeline.