By Padmanabhan Ananthan and Christy Santhosh
(Reuters) -Arrowhead Pharmaceuticals will get up to $2 billion from Swiss pharma major Novartis for an exclusive worldwide license to the U.S. drugmaker’s experimental therapy that targets neuromuscular conditions such as Parkinson’s.
Shares of Arrowhead, which has also partnered with Sanofi and GSK, rose about 10.4% in morning trading following the news.
Novartis has been on a deal-making spree in 2025, including buyouts and licensing pacts, as it prepares for looming patent expirations on several blockbuster medicines.
The company has been looking to acquire Avidity Biosciences, a developer of treatments for rare muscle disorders, according to media reports.
H.C. Wainwright analysts said the collaboration was a “strategically clean deal” that would extend Arrowhead’s cash runway without diluting its ownership.
They said the deal directly supports Arrowhead’s treatment strategy for the central nervous system alongside its in-house ARO-MAPT program, a candidate for treating neurological disorders such as Alzheimer’s and frontotemporal dementia.
Arrowhead will receive $200 million upfront when the deal with Novartis closes and up to $2 billion in milestone payments and royalties on future sales. Novartis will receive exclusive worldwide rights to the experimental therapy, ARO-SNCA.
Arrowhead had previously said it expects to receive near-term milestone payments from its collaboration with Sarepta Therapeutics despite recent setbacks around the latter’s gene therapy Elevidys, including two deaths.
TD Cowen analyst Joseph Thome said the deal should help mitigate concerns some have expressed around the probability of milestones being received from the Sarepta deal.
ARO-SNCA is in preclinical testing and is designed to lower levels of alpha-synuclein, a protein linked to Parkinson’s and related disorders.
Novartis and Arrowhead said they plan to move the program into human trials as soon as possible.
The agreement also covers future projects using Arrowhead’s RNA-targeting platform. Financial terms for those were not disclosed.
Novartis will use Arrowhead’s platform to develop additional treatments outside the U.S. drugmaker’s current pipeline.
(Reporting by Christy Santhosh and Padmanabhan Ananthan in Bengaluru; Editing by Krishna Chandra Eluri and Sriraj Kalluvila)
