Sarepta Therapeutics' licensing partner Arrowhead Pharmaceuticals 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.

Sarepta Therapeutics announced it has laid off more than one-third of its workforce, a drastic cost-cutting move following the deaths of two teenagers administered its gene therapy for Duchenne muscular dystrophy.

Sarepta Therapeutics faces serious FDA action after news broke of a third patient death, the FDA gets a new top drug regulator in George Tidmarsh, a handful of new drugs get turned away from the market and pharma companies continue to commit billions to reshoring manufacturing.

On a conference call, CEO Doug Ingram said the decision to cut 36% of the company's staff and halt several drug programs was essential to ensuring Sarepta's "long-term viability."

Sarepta Therapeutics is laying off 500 staffers, or 36% of its workforce, as part of a strategic restructuring aiming to save $400 million annually. | Sarepta Therapeutics has laid off 500 staffers, or 36% of its workforce,

The favorable market reaction indicates investor relief at management’s swift measures to rectify the company's worsening financial situation.

Arrowhead Pharmaceuticals said on Wednesday it expects to receive near-term milestone payments from Sarepta Therapeutics as part of their licensing agreement, despite recent setbacks at the Cambridge,

The drastic cost-cutting move follows the deaths of two teenagers that forced the company to restrict usage of its gene therapy for Duchenne muscular dystrophy.