July 23 (Reuters) - Sarepta Therapeutics' ( SRPT )

licensing partner Arrowhead Pharmaceuticals ( ARWR ) said on

Wednesday it expects to receive near-term milestone payments

from the drugmaker despite recent setbacks, including the death

of a trial patient reported last week.

Shares of Arrowhead rose nearly 4% in premarket trading. Its

stock has declined 11% since Sarepta disclosed that a

51-year-old man who received its experimental gene therapy

SRP-9004 died of liver failure.

Investors and analysts criticized

Sarepta for reporting the patient's death a day after it

disclosed cost cutting efforts, including its plans to halt the

study and layoffs. Two teenage boys who received Elevidys,

Sarepta's gene therapy approved for a rare muscular dystophy,

have also died of liver toxicities this year.

Sarepta's shares declined 25% in the last week, and have

fallen nearly 90% so far this year. Stock fell 1.6% to $13.4 in

premarket hours.

The companies entered into an agreement in late 2024, and

Sarepta gained licensing rights to four of Arrowhead's

early-stage experimental therapies.

"Sarepta has provided no indication of any intention to fail

to fulfill any of its obligations," the Pasadena,

California-based Arrowhead said.

Arrowhead expects to receive $300 million by the end of this

year, related to patient enrollment for its early-to-mid stage

study of ARO-DM1, which is being tested for a genetic condition.

But if Sarepta fails to make certain payments, Arrowhead

would have the right to terminate the partnership, the drug

developer said. Provisions of the deal allow both the parties to

terminate the agreement under certain circumstances.

Bernstein analyst William Pickering said earlier in the week

that there was not much reason for Arrowhead to pull out of the

deal unless they find another partner, as it does not have

enough financial resources to launch the therapies on its own.