Arrowhead Pharmaceuticals (ARWR) and Sarepta Therapeutics (SRPT) have struck a global licensing and partnership deal for clinical and preclinical programs in genetic diseases of the muscle, central nervous system, and lungs, the companies said Tuesday.

Arrowhead will get an upfront payment of $500 million in cash and $325 million as an equity investment from Sarepta upon closing, the companies said.

Arrowhead will also receive $250 million in five equal installments of $50 million each over five years and has the potential to receive an additional $300 million in near-term milestone payments as well as future potential payments of up to $10 billion together with sales royalties, the parties said.

Under the terms of the agreement, Arrowhead will produce clinical drug supply for all programs, and commercial drug product for the four programs currently in clinical studies.

Sarepta said it will finance the transaction, expected to close early next year, through cash on hand.

The companies said they have also signed a discovery collaboration for up to six additional muscle, cardiac, and/or central nervous system targets using Arrowhead's novel delivery technologies.

Arrowhead shares were 21% higher in recent Tuesday premarket activity, while Sarepta shares were up 2.4%.