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Alnylam to Cut a Third of Its Staff on Heels of Pipeline Reorganization

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By Doug Macron

A little more than a year after it shed nearly a third of its workforce, Alnylam Pharmaceuticals announced another round of layoffs that will reduce its staff by around 33 percent as it further sharpens its focus on its two lead drug-development programs.

“As we effect our ongoing transformation from a platform company to a product company, now is the time to focus our near-term efforts and resources on what we believe to be our highest value opportunities — specifically, accelerated clinical development plans for our programs in transthyretin-mediated amyloidosis and hemophilia,” Alnylam CEO John Maraganore said in a statement.

The move, which is expected to trim as much as $20 million in cash operating costs, comes at a pivotal time for Alnylam, which has recently reported promising clinical data but has been dealing with the pressures of protracted legal battles and the failure to secure industry partnerships for key drug candidates.

Roughly one year ago, Alnylam unveiled its so-called 5x15 initiative, which promised five drug candidates in “advanced clinical development” by 2015 (GSN 1/6/2011). Included in this effort are the company's TTR amyloidosis and hemophilia programs, as well as therapies for hypercholesterolemia, anemia, and hemoglobinopathies.

At the time, the company also said that it would commercialize all five drugs in the US itself, and seek marketing partners in other territories.

Achieving this goal appears to have proven more difficult than anticipated. This month Alnylam announced that it would now focus on bringing only two candidates to market on its own: ALN-TTR02, a second-generation version of its phase I TTR amyloidosis treatment ALN-TTR01, and the preclinical hemophilia treatment ALN-APC (GSN 1/12/2012). All other programs would advance only with the help of new and existing partners, the company added.

Alnylam also quietly changed other terms of the 5x15 initiative, and now states that it expects to have five products in any stage of clinical development by the end of 2015, rather than advanced development by the start of that year.

As a result of the change-up, Alnylam said last week that it will cut an estimated 55 jobs “as it aligns its resources to focus on what it believes to be the company’s highest value opportunities with accelerated clinical development plans.”

According to a company filing with the US Securities and Exchange Commission, the layoffs will reduce the company's overall workforce to around 115 employees. As a result, Alnylam said it expects to save about $20 million this year, although it will incur roughly $4 million in one-time restructuring expenses this quarter related to employee severance, benefits, and other costs.

Although Alnylam maintains a relatively large financial cushion — the company recently said it expects its 2011 year-end cash balance to be around $260 million — the company has been facing a number of pressures that make trimming costs all the more important.

In late 2010, partner Novartis declined to exercise a $100 million option to take broad, non-exclusive access to Alnylam's RNAi-related intellectual property (GSN 9/30/2010). In conjunction with that news, Alnylam announced a 25 percent to 30 percent reduction in force designed to save $25 million in 2011.

Since that time, Alnylam has failed to secure any new industry partnerships for its RNAi product candidates — a longstanding goal for the firm. More importantly, the company has been embroiled in a series of lawsuits that have diverted resources away from its drug-development efforts.

In mid-2009, Alnylam and the Max Planck Institute sued the Massachusetts Institute of Technology, the Whitehead Institute for Biomedical Research, and the University of Massachusetts Medical School for allegedly misappropriating inventions from the Tuschl-II patent family, which they control, into patent applications from a related IP estate (GSN 7/9/2009).

That dispute was settled last March (GSN 3/17/2011), but shortly thereafter Alnylam was slapped with a lawsuit by Tekmira, which charges that Alnylam stole and misused trade secrets related to proprietary lipid nanoparticle delivery technologies (GSN 3/17/2011).

Around that same time, Alnylam and Max Planck were sued by the University of Utah for allegedly failing to list one of that institution's researchers as an inventor on the Tuschl-II IP (GSN 3/24/2011).

The legal row with Tekmira has since grown, with Alnylam filing counterclaims and Tekmira expanding its suit to include charges against Alnylam collaborator AlCana Technologies. That case is set to go to trial in October.

More recently, Alnylam filed a separate patent-infringement suit against Tekmira, alleging that it violated a number of patents through a drug-discovery collaboration with Bristol-Myers Squibb (GSN 1/19/2012). Tekmira has denied the allegation.

Meanwhile, the University of Utah litigation inches forward, though no date has been set for a trial.


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