Skip to main content
Premium Trial:

Request an Annual Quote

Big Pharma Finally Looks to RNAi as Drug Source with Merck, Alnylam Deal


For some time, many big biopharmaceutical players have been using RNAi for target discovery and validation. But none had formally embraced the technology as a potential source of drugs.

This week that changed when Alnylam and Merck announced that they have formed a five-year alliance to develop RNAi-based therapeutics and related technologies. Under the deal, Merck will provide Alnylam with a “large series of well-validated drug targets,” many of which have been deemed “refractive to small molecule drug discovery,” Alnylam president and CEO John Maraganore told RNAi News. Alnylam will then develop siRNA therapeutics against those targets.

Merck will decide which of the siRNAs it wants to develop and commercialize with Alnylam, he added. Alnylam has the right to decide the extent of its role in each deal, and may opt for up to a 50/50 split of costs and downstream value.

The companies’ arrangement also calls for the two to work together on developing technologies to “address the challenges facing RNAi,” Maraganore said, chiefly drug delivery and off-target effects. Merck, meanwhile, will receive a co-exclusive license to certain Alnylam IP for in vitro and in vivo target identification and validation.

In exchange, Merck will make an upfront payment to Alnylam, in addition to annual cash payments and the purchase of a “significant” equity stake. Alnylam stands to receive an another cash payment and equity investment upon the achievement of a certain technology milestone, and will be paid a fee for each RNAi drug Merck chooses for development.

Specific terms were not disclosed.

The deal is“a great validation of what the [Alnylam] team has put together,” commented Peter Barrett, an Alnylam board member and senior principal at Atlas Venture, a major Alnylam investor.

“Big pharma recognizes that RNAi has really made a significant impact,” he added. “In a climate where big pharma really is not investing in brand new … or unproven technologies, it’s a testament to what the technology has already done in the target validation space and the potential it has in the therapeutics space.”

It’s Who You Know

Deals are often as much the result of who you know as what you know, and it appears that the Alnylam/Merck partnership is no exception to this trend.

The gears that turned out this arrangement, which Maraganore said was about nine months in
the making, were largely set in motion by the efforts of Stephen Friend, Merck’s senior vice president of molecular profiling and cancer research.

Friend was the former president and CEO of Rosetta Inpharmatics, before it was acquired by the pharmaceutical giant last May, and he completed his post-doctoral training at MIT among people such as Alnylam founder Phil Sharp and Greg Hannon, an Alnylam scientific advisor and Cold Spring Harbor Laboratory professor.

“Steve Friend was the champion of [this deal] at the Merck organization, and Merck contacted us back around January this year with a very significant interest to see if we could explore a way to work together,” Maraganore said. “Steve is known to a lot of people here, and clearly the contact between people like Phil Sharp and … Steve Friend was an important element of the early contact between the companies.”

Friend told RNAi News that he was well aware of the high-profile scientific team that founded Alnylam. So when Merck — which he said had been working with RNAi for target validation for some time “with a number of companies and institutions that we don’t talk about” — decided to expand into RNAi therapeutics, Alnylam was the obvious choice for a partner.

But ultimately Merck’s decision to forge the partnership was based on a combination of factors, he said — namely Alnylam’s focus on RNAi therapeutics and overcoming the technology’s delivery hurdles, not just “the personalities involved.”

Alnylam was co-founded in 2002 by a group of scientific researchers that includes Rockefeller University’s Tom Tuschl, Paul Schimmel from the Scripps Institute, Dave Bartel from the Whitehead Institute, MIT’s Phil Sharp, and Phil Zamore from UMass Medical School. The company has since pursued a strategy of creating a well-defined IP position through licensing deals, such as recent ones with Cancer Research Center and MIT, and through its acquisition of German RNAi firm Ribopharma.

Maraganore has said that the company wants to have a drug in the clinic within the next two to three years.
Alynlam, based in Cambridge, Mass., is currently focused on therapeutics for viral, oncologic, metabolic, central nervous system, and autoimmune diseases.