Alnylam Pharmaceuticals said this week that its agreement with the Max Plank Society, under which the company obtained the rights to the so-called Tuschl-1 and Tuschl-2 patent applications, has been amended to allow Alnylam greater flexibility in making business decisions, including those related to staffing, at its German subsidiary, Alnylam Europe.
Under the terms of the amendment, Alnylam will issue 270,000 shares of its common stock to the Max Planck Society and other co-owners of the intellectual property. Based on the company's stock price of $7.05 as of Thursday morning, the stock is worth roughly $1.9 million.
Roland Kreutzer, a founder of Ribopharma, which became Alnylam Europe after it was acquired by Alnylam in 2003, told RNAi News this week that there have been no layoffs as of yet in connection with the amended deal. He referred additional questions to Alnylam.
Officials from Alnylam declined requests for comment.
In December 2002, Alnylam struck a deal with Garching Innovation — the technology transfer organization of the Max-Planck Society — for the worldwide rights to use and sublicense certain patented technology, namely the Tuschl-1 and Tuschl-2 patent applications.
Named for one-time Max-Planck researcher and Alnylam co-founder Thomas Tuschl, these patent applications cover the use of short interfering RNAs — 21 to 23 nucleotides in length — to induce RNAi in mammalian cells; and RNAi using siRNAs with two-to-three nucleotide 3' overhangs on the end, respectively.
In exchange for the co-exclusive rights to Max-Planck's ownership of the Tuschl patent applications, Alnylam gave Garching a number of shares of preferred stock and agreed to pay royalties on net sales of all therapeutic and prophylactic products developed with the technology.
Additionally, Alnylam agreed to "build development and commercial capabilities in Germany comparable to Alnylam's capabilities in the United States using reasonable commercial efforts," according to an Alnylam filing with the US Securities and Exchange Commission this week. To satisfy this requirement, Alnylam acquired Ribopharma.
Alnylam also noted in the SEC filing that under this comparability requirement, it is required until December 20, 2007, "to maintain Alnylam Europe as an operating company in Germany with 25 full-time equivalent employees having their legal and habitual residence in Germany and working 75 percent of their working time in Germany. In addition, until such date, Alnylam is obligated to ensure that ten of such employees are scientists with at least a doctoral-level degree and four of such employees are diploma scientists," the filing states. "Alnylam is obligated to deliver to Garching periodic reports detailing how Alnylam has fulfilled, and how Alnylam intends to fulfill, these obligations."
Alnylam said in a statement this week that the amended deal with Garching "modifies staffing requirements at Alnylam Europe, and removes obligations to add functions in Germany that would unnecessarily duplicate those in the US."
Specifically, under the amended agreement, Garching has agreed to waive "any and all rights" related to its right to terminate the licensing arrangement with Alnylam based upon "an asserted default under the comparability requirement," Alnylam said in the SEC filing.
The amended agreement also releases Alnylam from its obligation to come to an agreement with Garching on "a reasonable and equal split of indications and sub-indications according to the estimated market size and accessibility by RNAi within the field … between Alnylam US and Alnylam Europe," the filing states.
In an SEC filing related to Alnylam's 2004 initial public offering, the company noted that it does not intend to pursue full clinical development of in-process R&D programs picked up through the Ribopharma acquisition, which include malignant melanoma and pancreatic cancer (see RNAi News, 3/5/2004).
The company also said that the new agreement "reinforces" its exclusive license to the Tuschl-2 patent application, although it didn't specify how. The Tuschl-1 patent application is exclusively licensed to Sirna Therapeutics, which has promised to sublicense the technology (see RNAi News, 9/12/2003).
— Doug Macron ([email protected])