Sarepta loses credibility by exiting Arrowhead at loss, says H.C. Wainwright

Less than one year after investing $325M in Arrowhead (ARWR) stock, Sarepta (SRPT) fully unwound its equity position, selling 9.27M shares in a block trade for $174M in gross proceeds and transferring 2.66M shares back to Arrowhead to satisfy $50M of a $100M milestone payment, with the unwinding representing a 31% decline vs. the purchase price, H.C. Wainwright analyst Mitchell Kapoor tells investors in a research note. The rapid pivot from strategic investment to divestiture in under 12 months weakens Sarepta’s credibility in capital allocation and renews concerns that Sarepta’s late-stage and commercial portfolio may not generate sufficient near-term cash to support its current debt and pipeline ambitions, the firm says. H.C. Wainwright has a Sell rating and $5 price target on Sarepta shares.