How will the $100 million milestone payment from Sarepta affect Arrowhead’s cash balance and liquidity in the short term?

The $100 million milestone from Sarepta will instantly lift Arrowhead’s cash balance by roughly $50 million (the other $50 million is paid in Arrowhead common stock, which expands equity but does not affect cash). In the short‑term this cash injection improves the company’s liquidity ratios – current and quick ratios will jump to levels well above the industry median – and provides a modest buffer against the company’s ongoing R&D cash burn. With an extra $50 million on the balance sheet, Arrowhead can fund its near‑term clinical‑development spend (including the second enrollment milestone and subsequent manufacturing spend) without having to tap the equity market or take on additional debt, which is a positive signal for credit‑risk‑sensitive investors and may reduce the cost of capital in the coming quarters.

From a market‑dynamic perspective, the cash inflow reduces near‑term financing risk, which tends to lift the stock’s risk premium and supports a higher valuation multiple. Technically, the announcement is likely to create a short‑term price support around the recent trading range (the news landed near the recent $6‑$7 per‑share level, and the $50 M cash injection could act as a catalyst for a breakout above the prior resistance at ~ $7.20). Traders could look for a break‑out bullish setup on the next pull‑back: a bounce off the newly reinforced support would be a buying opportunity, while a failure to hold could signal a short‑term correction as the market digests the cash‑boost versus the underlying high‑growth but cash‑intensive pipeline. In short, the milestone cash bolsters Arrowhead’s liquidity, narrows the need for near‑term financing, and creates a modest upside bias for the stock in the near term.