12:00 AM
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Jan 20, 2014
 |  BioCentury  |  Strategy

Independent streak

How Merck, Genzyme deals boost Alnylam's quest to remain independent

Alnylam Pharmaceuticals Inc.'s deals with Genzyme Corp. and Merck & Co. Inc. are designed to give the RNAi pioneer the wherewithal to deliver value to its shareholders for the next five to 10 years while remaining independent.

The Genzyme deal announced Monday will have the more immediate impact by boosting Alnylam's cash position, capabilities and valuation.

In return for purchasing a 12% stake in Alnylam for $700 million, Genzyme received selected rights to develop and commercialize two of Alnylam's clinical candidates, and options to the rest of the biotech's rare disease RNAi portfolio.

The purchase price works out to $79.85 per share - a 21% premium to Alnylam's close of $66.21 on Jan. 10 before the deal was announced.

The cash will give Alnylam the runway to advance two more programs into the clinic by 2015, bringing the total to seven from the previously planned five.

The deal also provides access to Genzyme and Sanofi's international development and commercial infrastructure while allowing Alnylam to retain control over the programs and maintain rights in territories with significant upside.

The Merck deal announced a day earlier could boost longer-term growth.

On Jan. 12, Alnylam said it would acquire the IP and RNAi assets of Sirna Therapeutics Inc. from Merck for $25 million in cash and $150 million in stock.

The deal cements Alnylam's already strong IP position in RNAi by giving the biotech complete rights to two patent estates it had previously shared with Sirna. It also adds two preclinical programs, plus technology that could expand Alnylam's potential targets beyond the liver.

The $1.3 billion market cap bump Alnylam got on the deals last week also would make the biotech a much more expensive takeout target. Alnylam ended the week at $87.36 per share, with a market cap of $5.5 billion.

"The Genzyme deal accelerates our plans today, but the Merck deal provides a good component of how we can continue to build our company for the future," President and CEO John Maraganore told BioCentury.

Genzyme opts in

The Genzyme deal carves up Alnylam's current and future rare disease portfolio based on the size of the markets the drugs are intended to serve and the time frame in which the products are expected to reach clinical proof of concept.

Genzyme will immediately gain rights to Alnylam's two most advanced clinical candidates, patisiran and ALN-TTRsc.

For patisiran, Genzyme will have rights outside North America and Western Europe. For ALN-TTRsc, the partners will co-develop and co-promote the product within North America and Western Europe, while Genzyme will have rights in the rest of the world.

Genzyme already had rights to ALN-TTRsc in Japan and Asia-Pacific countries under a 2012 deal(see BioCentury, Nov. 5, 2012).

The differences in territory rights reflect expectations that ALN-TTRsc will treat a bigger market, where additional capabilities and bandwidth will be needed.

ALN-TTRsc is in Phase II development for familial amyloid cardiomyopathy, which is estimated to affect 40,000 people worldwide. Patisiran is in Phase III for transthyretin (TTR)-mediated amyloidosis in patients with familial amyloidotic polyneuropathy (FAP). There are about 10,000 FAP patients worldwide.

Alnylam will lead development and commercialization in the shared territories.

"We and Genzyme together believe that the broadened partnership on ALN-TTRsc will increase the product's overall value, as significant market development and commercial scale is warranted...

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