Arrowhead Pharmaceuticals (ARWR) saw its stock price plummet by 8.28% in pre-market trading on Thursday, following news that its partner Sarepta Therapeutics (SRPT) had sold a substantial portion of its Arrowhead stock holdings. The sell-off by a major stakeholder has triggered concerns among investors, leading to the sharp decline in Arrowhead's share price.

According to a late Wednesday announcement, Sarepta Therapeutics sold approximately 9.3 million common shares of Arrowhead Pharmaceuticals, generating at least $174 million in gross proceeds. Additionally, Sarepta will transfer about 2.7 million Arrowhead shares to satisfy $50 million of a previously announced $100 million milestone payment obligation. This significant reduction in Sarepta's stake in Arrowhead, less than a year after investing $325 million, has contributed to the downward pressure on Arrowhead's stock.

Despite the stock sale, the two companies maintain a collaborative relationship on the development of SRP-1003, an investigational RNA interference therapeutic for the treatment of type 1 myotonic dystrophy. However, the market seems more focused on Sarepta's decision to reduce its Arrowhead holdings. H.C. Wainwright commented that Sarepta's exit at a loss has damaged its credibility, further impacting investor sentiment. As the market digests this unexpected move by a key partner, Arrowhead Pharmaceuticals faces challenges in maintaining investor confidence in the short term.