ARWR inks Novartis deal: $200M now and up to $2B in milestones

Rhea-AI Filing Summary

Arrowhead Research entered an exclusive licensing agreement with Novartis for ARO-SNCA, a preclinical RNAi therapeutic targeting Parkinson's disease and other synucleinopathies. Arrowhead will complete preclinical work while Novartis is responsible for clinical development, manufacturing, and commercialization. Arrowhead will receive a $200 million upfront payment, potential up to $2 billion in development, regulatory, and sales milestones, and is eligible for tiered royalties up to the low double digits on net product sales. The transactions are subject to customary closing conditions, including the expiration of the Hart-Scott-Rodino waiting period. The full agreement text will be filed as an exhibit to Arrowhead's annual report for the year ending September 30, 2025.

Positive

• $200 million upfront payment provides immediate non-dilutive capital
• Potential up to $2 billion in development, regulatory, and sales milestones represents substantial upside
• Tiered royalties up to the low double digits preserve long-term revenue participation
• Novartis will be responsible for clinical development, manufacturing, and commercialization, shifting execution and funding risk away from Arrowhead

Negative

• Exclusive license transfers control of clinical and commercial decisions for ARO-SNCA to Novartis
• Arrowhead's upside depends on milestone achievement and sales performance controlled by Novartis
• Transaction closing is subject to conditions including the Hart-Scott-Rodino waiting period, which could delay realization

Insights

Financial Analyst

TL;DR: Large upfront cash and significant milestone potential materially de-risks preclinical asset while preserving upside via royalties.

Receiving $200 million upfront provides immediate non-dilutive capital that can fund operations or other programs. The potential $2 billion in milestones and low-double-digit royalties create substantial upside if the program advances successfully through development and commercialization. Offloading clinical development, manufacturing, and commercialization to Novartis shifts development cost and execution risk away from Arrowhead, improving capital efficiency. The agreement remains subject to closing conditions, so recognition of full value depends on transaction close and future program progress.

M&A / Licensing Specialist

TL;DR: This is a material licensing deal typical for preclinical biotech, transferring late-stage risk to a major pharma partner.

Granting an exclusive license to Novartis for ARO-SNCA aligns with standard industry practice where a smaller developer completes preclinical work and a larger partner assumes clinical and commercial responsibilities. The headline economics—$200 million upfront, up to $2 billion in milestones, and tiered royalties—are sizable and indicate strong strategic interest. Key transactional considerations remain: exclusivity scope, milestone structure, and regulatory timelines, none of which are detailed here and will be important to assess deal accretion and contingent value.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF

THE SECURITIES EXCHANGE ACT OF 1934

September 2, 2025

Date of Report

(Date of earliest event reported)

Arrowhead Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-38042

46-0408024

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

177 E. Colorado Blvd, Suite 700, Pasadena, CA 91105

(Address of principal executive offices, including Zip Code)

(626) 304-3400

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4 (c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

ARWR

The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01 Entry into a Material Definitive Agreement

Exclusive licensing and collaboration agreement

On September 2, 2025, Arrowhead Pharmaceuticals, Inc. (the “Company”) entered into an Exclusive License and Collaboration Agreement (the “Agreement”) with Novartis Pharma AG, a company organized under the laws of Switzerland (“Novartis”).

Under the Agreement, Novartis will receive an exclusive license for ARO-SNCA, a preclinical stage investigational RNA interference (“RNAi”) therapeutic being developed by the Company as a potential treatment of Parkinson’s Disease, and other synucleinopathies, and for other additional collaboration targets utilizing the Company’s proprietary Targeted RNAi Molecule platform.

The Company will conduct and complete all activities through the preclinical stages of ARO-SNCA, and Novartis will be wholly responsible for clinical development, manufacturing, and commercialization activities. The Company will receive $200 million as an upfront payment and is eligible to receive up to $2 billion in potential development, regulatory and sales milestones, and is further eligible to receive tiered royalties up to the low double digits on net product sales.

The transactions contemplated under the Agreement are subject to customary closing conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

The description of the Agreement contained herein does not purport to be complete and is qualified in its entirety by reference to the complete text of the Agreement which will be filed as an exhibit to the Company’s Annual Report on Form 10-K for the year ending September 30, 2025.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.						Description
99.1						Press Release, dated September 2, 2025.
104						Cover Page Interactive Data File (the cover page tags are embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: September 2, 2025

ARROWHEAD PHARMACEUTICALS, INC.
By:						/s/ Daniel Apel
						Daniel Apel
						Chief Financial Officer

FAQ

What did Arrowhead (ARWR) license to Novartis?

Arrowhead licensed an exclusive agreement for ARO-SNCA, a preclinical RNAi therapeutic for Parkinson's disease and other synucleinopathies, plus additional collaboration targets using its Targeted RNAi Molecule platform.

How much cash does Arrowhead receive upfront in the Novartis deal?

Arrowhead will receive a $200 million upfront payment under the agreement.

What potential future payments can Arrowhead receive from Novartis?

Arrowhead is eligible for up to $2 billion in development, regulatory, and sales milestones and tiered royalties up to the low double digits on net product sales.

Who will handle clinical development and commercialization for ARO-SNCA?

Novartis will be wholly responsible for clinical development, manufacturing, and commercialization activities for ARO-SNCA.

Are there conditions before the transaction closes?

Yes. The transactions are subject to customary closing conditions, including the expiration of the Hart-Scott-Rodino Antitrust Improvements Act waiting period.