Alnylam in Transformative Deal with Roche

In what has to be considered the largest drug discovery collaboration in biotech history, and a validation of Alnylam’s IP and the field of RNAi Therapeutics as a whole, Alnylam and Roche signed a technology license agreement that will give Roche NON-exclusive access to RNAi Therapeutics-related Alnylam IP in return for around $275M in upfront cash, plus over $40M in equity investments, and $15M for Roche’s acquisition of Alnylam’s German subsidiary in Kulmbach, Bavaria.

Roche may use this license to discover and develop RNAi Therapeutics in four out of 20 Alnylam defined therapeutic focus areas: oncology, respiratory, metabolic disease, and non-viral liver diseases. This excludes, however, gene targets that have already been exclusively licensed to other 3rd party licensees or are covered by Alnylam’s own gene-target specific IP. Further reasonable milestone payments could top $1billion with additional royalties on any product sales.

This landmark agreement could significantly speed up the whole field of RNAi Therapeutics by bringing into the fold a highly resourceful biopharmaceutical company with a proven track-record in bringing innovative medicines to patients (see Roche’s Genentech alliance). Moreover, Alnylam, which has a promising RNAi Therapeutics candidate for RSV in phase II clinical trials, will now have all the financial resources it needs to greatly expand and accelerate its own proprietary pipeline and may never need to raise cash through dilutive secondary offerings. What is more, similar deals could follow as Alnylam is free to issue similar non-exclusive licenses, including in the 4 fields covered today, for similar, if not better conditions. The interest should only increase as more partnerships are being announced and players still outside of Alnylam’s umbrella IP estate may now rush to become licensed before their competitors will claim some valuable gene targets of interest.

In light of this, Alnylam’s share price which shot up over 50% today should have much room to extend its rally. Today’s closing price of $23.12, giving the company a market capitalisation of around $900M with over $500M in cash or cash equivalents, could easily be seen as a very attractive bargain. Still below its all-time high set in the wake of Merck’s acquisition of Sirna Therapeutics last year for $1.1billion, it would not be surprising to see the stock extend its rally considerably as the wider financial community comes to grasp with the magnitude of today’s events.

I congratulate John Maraganore and his team at Alnylam for today’s accomplishment. This astounding deal gives me time to pause and rethink my long-held dogma that turning the promise of RNAi Therapeutics into reality is a largely science-driven endeavour. What we have witnessed today will bring some hope into the lives of many patients and relatives suffering from a range of serious diseases. It may not be this, the next, or even the year thereafter, but possibly sooner rather than later.