Alnylam Wheels, Deals, and Gets $700M Investment From Genzyme

Alnylam Wheels, Deals, and Gets $700M Investment From Genzyme

Jan 13, 2014 at 9:19AM

A few years ago, Genzyme struck a deal with Alnylam Pharmaceuticals (NASDAQ:ALNY) to grab some rights to an RNA interference drug program for a rare disease called transthyretin amyloidosis. Clearly, Genzyme liked what it saw, because it's now ready to write a massive $700 million check to the Cambridge, MA-based company to significantly expand the deal.

Genzyme, now the rare disease unit of Paris-based pharma giant Sanofi (NYSE:SNY), is kicking off the annual JP Morgan Healthcare Conference in San Francisco by announcing it's snapped up a 12 percent ownership stake in Alnylam. It's done so by acquiring $700 million worth of the company's stock at $80 per share—a roughly 21 percent premium to Alnylam's $66.21 closing price on Friday.

In return, Genzyme has significantly deepened its ties to Alnylam's RNAi drug programs. First, Genzyme will get more rights to Alnylam's drug candidate patisiran, the biotech company's RNAi drug that's furthest along in clinical development.

Genzyme previously held Asian rights to patisiran under the original deal the two companies signed in 2012. Now, however, Genzyme will now be able to sell patisiran everywhere except North America and Western Europe—assuming patisiran makes it through clinical trials and wins approval from regulators. In November, Alnylam began enrolling patients in a Phase III trial testing the drug inpatients with familial amyloidotic polyneuropathy, or FAP—a condition in which excessive amounts of amyloid proteins build up in the tissues of the body, leading to progressive damage to the nerves.

In addition, Genzyme and Alnylam will now co-develop and ultimately co-sell ALN-TTRsc, a form of patisiran Alnylam is developing to deliver via an injection just under the skin. That drug is currently being tested in a mid-stage clinical trial for familial amyloid cardiomyopathy (FAC), which is like FAP, except it leads to damage to the heart. Again, Alnylam will keep rights to the drug in North America and Western Europe, while Genzyme will be able to sell the drug in the rest of the world.

Genzyme is also getting ahold of a number of other Alnylam drug candidates. It's got the option to acquire either worldwide rights or co-commercialization rights to two other unspecified Alnylam drug candidates once early clinical studies on them are completed. Genzyme also has the option, up until 2020, to develop and sell all products Alnylam is developing to treat rare genetic diseases everywhere except North America and Western Europe. That part of the deal can be extended by an additional year, the two companies said.

"This new relationship with Genzyme is transformational for Alnylam," said Alnylam CEO John Maraganore, in a statement. "It is a game changer for both the advancement of RNAi therapeutics as a new class of genetic medicines to patients around the world, and for our commitment to build a leading, independent biopharmaceutical company that delivers value to our shareholders."

That wasn't the only wheeling and dealing Alnylam did on Sunday. It also paid Merck $175 million up front in cash and stock for what remains of Sirna Therapeutics, the RNAi outfit the pharma giant shelled out $1.1 billion for in 2006. In the deal, Alnylam's getting intellectual property, certain preclinical drug candidates, and rights to Sirna's RNAi drug delivery platform. Alnylam is paying $150 million in cash and $25 million in stock right away, and could end up adding another $105 million in milestone payments—per product—to the deal when all is said and done.

I'll be meeting with Maraganore at the JP Morgan conference tomorrow, and will update this story with some comments afterwards. In the meantime, Alnylam will be holding a conference call at 9 am ET/6 am PT Monday morning to discuss the deals.

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This article originally appeared on Xconomy, along with:

Ben Fidler and Xconomy have position in any stocks mentioned. The Motley Fool recommends Alnylam Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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