Tekmira’s Amended Complaint Suggests that Alnylam’s Transgressions More Severe than Suspected

The Amended Complaint against Alnylam filed in early June by Tekmira revealed that the potential damages to the company as a result of Alnylam’s alleged transgressions may be much more severe than initially feared based on the original Complaint and their public relationship over the years.

In particular, Alnylam apparently used their insights into Tekmira’s technology, gained as a result of its collaborator status and by secretly hiring ex-Tekmira employees (in breach of non-compete agreements) to file for patents that may question Tekmira’s freedom-to-operate in the technology that it itself developed. One example concerns the MC class of lipids.

From the Amended Complaint:

‘35. After learning Tekmira’s MC Trade Secrets in the collaboration, Alnylam misused those trade secrets by, among other things, filing for patents in its own name, and without including any Tekmira inventors, on a lipid structure that was broad enough to include the MC class of cationic lipids developed by Tekmira. In so doing, Alnylam improperly claimed ownership over Tekmira’s MC Trade Secrets, including the MC class of cationic lipids, for itself.’

Even worse, Tekmira’s significant competitive advantage of being pretty much the only company that can make quality SNALP/LNP at commercial scale is threatened as regulatory demands allowed Alnylam to learn of Tekmira's LNP manufacturing know-how and trade secrets which it abused to not only make such information fair game apparently throughout the Alnylam organization, but even to disseminate it to 3rd parties such as Takeda- all despite of Tekmira's best efforts to limit such information to only a few Alnylam employees on a need-to-know basis, password protection, written agreements, and all:

From the Amended Complaint:

‘Tekmira provided the MBR for the Lead Formulation, which is one of Tekmira’s MBR Trade Secrets, to Mr. Konys and specific, identified employees within Alnylam pursuant to the terms of the September 2008 MBR Agreement. Tekmira tightly controlled access to this information, including by securing the MBR computer files with password protection in order to limit the universe of individuals within Alnylam who could gain access to the MBR Trade Secrets.’

…

‘Tekmira learned about Alnylam’s wrongful disclosure of Tekmira’s MBR [Master Batch Records] Trade Secrets to Takeda when Alnylam’s David Konys told Tekmira that Alnylam had received questions from Takeda about Tekmira’s delivery technology.

Mr. Konys forwarded Takeda’s questions and asked Tekmira to answer them. The questions included information taken directly from Tekmira’s MBR.’

In addition, Alnylam has been manufacturing LNPs for 3^rd parties, including at least Takeda and Novartis, in an alleged violation of the exclusive LNP manufacturing status of Tekmira which apparently included certain non-clinical LNP manufacturing. No wonder Tekmira investors have been waiting in vain for those sure-fire Novartis and Takeda deals and were instead diluted by about 15% in a capital raise this month. Meanwhile, Alnylam pocketed $50M in ‘technology transfer’ milestones from Takeda.

From the Amended Complaint:

‘83. On information and belief, Alnylam is manufacturing delivery formulations for at least Takeda and has also done so for another third party pharmaceutical company called Novartis. On further information and belief, the delivery technology that Alnylam is providing contains, is based upon, and derives in whole or in part from Tekmira technology, including its confidential information and trade secrets.

Alnylam’s use of Tekmira’s manufacturing and delivery technology to manufacture formulations for third parties is not authorized by the restrictions on use and disclosure in the Protiva Agreement, Tekmira Agreement, September 2008 MBR Agreement, and Manufacturing and Supply Agreement. Alnylam’s manufacturing activity also constitutes a breach of the Manufacturing Requirements provisions of the agreements, which require Alnylam to use Tekmira as its “exclusive manufacturer to Manufacture and supply its requirements” for toxicology and other non-clinical studies and clinical development, through the completion of all Phase II studies for each product licensed from Tekmira. §11.1.1, Manufacturing and Supply Agreement.’

In general, it is quite clear that Alnylam’s own, ‘independent’ LNP development efforts were in competition with that of Tekmira. This actually is nothing new as David Bumcrots lipidoid-vs-SNALP comments four years ago illustrate. However, by not only licensing Tekmira IP, but also seeking practical help in using the technology, Alnylam greatly restricted its ability to build a competing LNP technology platform as that would have been destined to collide with the collaboration agreement that protected Tekmira’s ownership over its technology during and after the collaboration. This includes that Alnylam could not develop and claim technology that would have been derived from Tekmira’s technology and benefited from Tekmira know-how and trade secrets. It won’t take much effort for an expert witness to demonstrate that ‘2^nd generation’, MC3, formulation ratios etc as claimed in patent applications by Alnylam, including its Canadian subsidiary Alnylam Canada, are all obviously derived from Tekmira technology and know-how.

The Amended Complaint further illustrates that Alnylam showed no respect for its partner. Is it because it believed that money entitled them to all of Tekmira property, to the degree that it confuses an exclusive license with actual ownership (e.g. Alnylam citing, in defense of allegations that it misappropriated MC technology, the Greene-Murray letter in which Tekmira's CEO acknowledged Alnylam's exclusive rights to MC3)? Is it because it considered Tekmira’s existence a potential weakness in its quest for RNAi Therapeutics world domination? Or is it because historic business development successes (which ironically are largely based on Tekmira's technology) made them lose touch with reality?

I’m not exactly sure, but what I do believe is that all this has been a concerted scheme to marginalize and, yes, destroy Tekmira. The fact that Alnylam has published and been claiming to have discovered that ApoE explains the preferred functional uptake of ionizable SNALPs in the liver, although this was based on confidential information provided to it by Tekmira, nicely captures that Alnylam knew no shame when it came to Tekmira. In the long-term, no matter how this litigation ends, a company that interprets Open Innovation to mean that first you evaluate, and if you like it then marginalize the inventor, will find it difficult to attract (small) biotech companies with real enabling RNAi technologies.

A word about myself and the Tekmira-Alnylam litigation

It is not surprising that there is speculation about my motives and strong language in supporting Tekmira in their litigation against Alnylam. Yes, I am a shareholder of Tekmira and have disclosed that a number of times- not that I would have to anyway. This, however, is not without reason and based on Tekmira’s critical contributions to siRNA delivery, a leadership that is continuing to this day (see e.g. nebulized LNPs or the manufacturing of quality antibody-targeted SNALPs). I have long taken exception with the way Alnylam has been treating Tekmira and have seen it getting worse. Tekmira’s Complaint therefore only confirms what I had feared some time ago, and I see no reason to mince my words and expect Tekmira to vigorously pursue this case until it regains rightful ownership over all of its technology- plus damages and more.

For discussion purposes, here the Amended Complaint.