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iStock, Afry Harvy 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.” Annalee Armstrong for BioSpace “[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.”

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iStock, Deagreez In the wake of multiple patient deaths from liver injuries related to Sarepta Therapeutics’ AAV gene therapy platform, some in the sector are looking for ways to improve the current technology, while others are eager to move on. If a patient is a good candidate to receive a gene therapy, delivering it using an adeno-associated virus (AAV) is a natural choice. AAVs are the current standard bearer for delivering functional genes to patients with genetic diseases. Duchenne muscular dystrophy (DMD)—a lethal muscle disease caused by mutations in the dystrophin gene—is a natural candidate for gene therapy. But Sarepta Therapeutics’ recent, well-publicized saga has rocked the gene therapy space. Within the last few months, two patients with DMD who received the company’s AAV gene therapy Elevidys died from liver injury, as did a patient in a Phase I clinical trial for the company’s limb-girdle muscular dystrophy gene therapy SRP-9004, which uses the same underlying platform technology as Elevidys. The issue with AAVs in these cases is a problem for just about anything that enters the bloodstream: they accumulate in the liver. That’s not a problem unique to this technology, but its significance lies in one of the major drawbacks of using AAVs: their immunogenicity. “Everything goes to the liver, not just viruses,” Nitin Joshi, a bioengineer and assistant professor at Harvard Medical School whose lab develops gene therapies for a variety of disorders, told BioSpace . “This is an issue for all drugs, including small molecules.” It’s a bigger problem with AAVs, however, because viruses can raise a response from the immune system, causing damaging effects like cytokine storm, he explained. AAVs were discovered in 1965 and quickly recognized for their ability to deliver DNA into cells. In 1984 , scientists demonstrated a landmark proof of concept: AAVs could deliver a gene to a mammalian cell. Novartis’ Luxturna , which in 2017 became the first-ever FDA-approved gene therapy, for a rare form of inherited vision loss, is delivered using an AAV vector. Now, with a spate of high-pro on its docket, the gene therapy space is asking itself questions about AAV, its old reliable workhorse. Even before the recent deaths connected to Elevidys, thirteen deaths were linked to AAV gene therapy between 2021 and 2024, according to an article published by the Norn Group. After news of the third death linked to Sarepta’s platform broke, fears for AAV’s future exploded on social media. Zhonghao (John) Liu, founder and CSO at YOLO Immune, compared the situation to the death in the 1990s of Jesse Gelsinger after being injected with an experimental gene therapy using an adeno-virus vector to treat his genetic disease of urea cycle disorder. The FDA stopped all ongoing gene therapy trials at that time, Liu wrote in a LinkedIn post in late July. “Today’s event may become the second turning point for the whole gene therapy field! Chilling Winter Is Coming!” But AAV’s demise may have been greatly exaggerated. “AAVs will have value in the long run,” Emil Kakkis, CEO of Ultragenyx, told BioSpace. A Real Sponge for Drugs AAVs are popular—even among the suite of other viruses available to deliver drugs, like retroviruses—for a very specific reason: they can deliver DNA directly to the nucleus of non-dividing cells. That separates them from retroviruses, which can only target dividing cells, and lentiviruses, which can target non-dividing cells but struggle to deliver DNA to the nucleus, where it can be expressed stably. That opens up the virus’ tissue-targeting abilities far beyond other viral and nonviral platforms. Sarepta, Elevidys and the liver injuries sustained by patients taking the drug have not come under the spotlight because patients with DMD are especially susceptible to liver side effects. In contrast, myotubular myopathy, another genetic condition that produces severe muscle weakness, does cause liver problems on its own. In 2020 , two patients taking an experimental AAV-delivered therapy for myotubular myopathy made by Audentes Therapeutics (now a part of Astellas Pharma) died of liver injury. “But unlike myotubular myopathy, DMD patients don’t have underlying liver disease usually, and [it] also seems like liver failure in the three Sarepta cases are more consistent with AAV-associated immune reaction,” Joshi told BioSpace in a follow-up email. Instead, in DMD, the problem is that AAVs accumulate exceptionally well in the liver but are difficult to target anywhere else. Dystrophin is mutated in the muscle, which AAVs do not target particularly well. Also, since muscle is distributed throughout the body, a replacement gene needs to be delivered systemically as opposed to locally. Because muscle is such a tricky tissue to target, gene therapies for DMD need to use AAV doses several orders of magnitude higher than those for a genetic disease related to the liver, Kakkis explained. That is why DMD patients are experiencing liver injuries: they are simply receiving much, much more virus than patients with other conditions, he said. “For liver conditions, you don’t need a higher dose,” Kakkis said. “For other places you need to increase the dose.” This also comes down to issues with manufacturing AAVs. It is difficult to prepare fully potent AAVs where every single capsid contains a therapeutic gene. According to Kakkis, a therapeutic dose of a gene therapy’s DNA can be made up of up to 50% empty viruses, meaning patients are getting double the dose of virus that they actually need. However, Sarepta’s struggles do not mean the end of AAVs. A bevy of companies, including KBI Biopharma and BioChromatographix , in addition to academic scientists, are actively researching methods —like ultracentrifugation and particular kinds of chromatography—to separate out empty capsids in an AAV preparation, potentially lowering the effective dose for gene therapies like Elevidys. Another popular fix for AAV’s struggles with liver injuries is to give patients steroids along with their gene therapy in an attempt to muffle an immune reaction to the virus. According to Kakkis, this has long been a common approach for gene therapy companies, and one Ultragenyx is employing in its Sanfilippo syndrome program. Ultragenyx received a Complete Response Letter from the FDA last month for its Sanfillippo candidate UX111, also an AAV-based gene therapy. The regulator cited manufacturing concerns, but Kakkis remained confident in the company’s viral technology. “We have been testing AAVs in four different conditions with no safety issues. We look at AAVs as a very safe format and we’re invested in it,” he said. “With continued improvement in AAV technology, it’ll be around for a very long time.” Beyond AAV While some in the gene therapy industry look to fine-tune AAVs for greater safety, others are charting a course away from the old stalwart. One of these individuals is Harvard’s Joshi. “It’s the holy grail [of gene therapies] to move away from viral vectors,” he said. “The field agrees we need new materials with the ability to transfect cells.” Other gene delivery platforms, particularly lipid nanoparticles (LNPs), have come to the fore as alternative methods. LNPs have the simple advantage of not being a virus and therefore having much lower immunogenicity, avoiding the liver injury complications of AAV-based therapies. While not a gene therapy, Moderna’s mRNA-based COVID-19 vaccine Spikevax uses LNPs to deliver its payload. It sidesteps a key issue with LNPs that echo AAVs’ issues: they’re difficult to target anywhere but the liver. Moderna doesn’t have that problem because its vaccine can be delivered into the bloodstream without much targeting and still raise an immune response. It’s not just vaccines that are leveraging LNPs. Alnylam’s Onpattro , an siRNA therapy for hereditary amyloidosis, uses an LNP vehicle to deliver its payload. However, this is again a liver-directed condition, so targeting is not an issue. Kakkis reiterated that AAVs are here to stay, even if further improvements in dosing and immunogenicity are needed. “I look at Sarepta’s drug as a first-generation drug. What Sarepta’s done is open the door to other improvements,” he said, pointing to companies like Solid Bioscience that are developing next-generation delivery systems. “We have been testing AAVs in different conditions [like Sanfilippo syndrome and Wilson disease] with no safety issues,” he said. “I think AAVs are a very safe way to deliver DNA to the liver. With continued improvement in AAV technology, it’ll be around for a very long time.” And the stakes for patients, especially those with DMD, are extremely high. “There are kids living and dying today, so it’s now or never, not three to five years from now on. In that setting, the treatment has value.”