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Genzyme Takes Stake in Alnylam as Part of $700M Genetic Diseases Alliance

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On the heels of its acquisition of Merck's RNAi drug assets, Alnylam Pharmaceuticals this week announced that it has signed a deal giving partner Genzyme the rights to its existing and future genetic medicines programs in all territories outside of North America and Western Europe for the next six years.

As part of the arrangement, Genzyme has purchased a 12 percent stake in Alnylam, buying approximately $700 million worth of newly issued stock at roughly $80 a share. Alnylam said that the transaction would boost its cash reserves to over $1 billion, giving it "financial independence through to multiple product launches."

Following the news, Alnylam's stock jumped nearly 30 percent to about $85 in early trading on Monday.

The companies have been collaborating since 2012, when Genzyme acquired the Asian rights to Alnylam's phase III transthyretin-mediated amyloidosis drug patisiran.

With the latest deal, Genzyme will have the rights to patisiran in all countries outside of North America and Western Europe. The companies will also now co-develop and co-promote a subcutaneous version of the drug, called ALN-TTRsc, in North America and Western Europe, although Alnylam will maintain primary control of the product in its territories while Genzyme handles development and commercialization elsewhere.

Sanofi subsidiary Genzyme has also picked up the right to opt-in to any of Alnylam's stable of genetic disease drug candidates upon the establishment of human proof of concept.

These include ALN-AT3, which targets antithrombin for the treatment of bleeding disorders such as hemophilia; ALN-CC5, which targets complement component C5 for the treatment of complement-mediated disease; ALN-AS1, which targets aminolevulinate synthase-1 for the treatment of porphyria including acute intermittent porphyria; and ALN-AAT, which targets alpha-1-antitrypsin for the treatment of AAT deficiency liver disease.

Also covered are ALN-TMP, which targets TMPRSS6 for the treatment of beta-thalassemia and iron-overload disorders; ALN-PCS, which targets PCSK9 for the treatment of hypercholesterolemia; and ALN-ANG, which targets ANGPTL3 for the treatment of genetic forms of mixed hyperlipidemia and severe hypertriglyceridemia.

Genzyme will also have the opt-in rights for future Alnylam programs focused on genetic diseases. Additionally, the company may chose to co-develop and co-promote ALN-AT3 in North America and Western Europe — although Alnylam would retain development and commercialization control — or may chose to pick up the worldwide rights to ALN-AS1.

Lastly, Genzyme has been given the right to license the global rights to a single genetic medicines program currently not part of Alnylam's formal pipeline, and the companies have agreed to negotiate exclusively on a collaboration to discover new technologies for siRNA delivery into the central nervous system.

Genzyme's opt-in rights expire in 2020, when Alnylam will regain the rights to any genetic medicines program that has not demonstrated human proof of concept by that time. Alnylam also maintains the full rights to any current or future RNAi program outside of the area of genetic medicines, and has the right to form collaborations with other companies in such disease areas.

As part of their arrangement, Genzyme has also agreed to provide Alnylam with research funding beginning in 2015 for those programs that Genzyme has opted into.

For programs where Genzyme holds the rights outside of North America and Western Europe, it will pay 20 percent of the global development expenses. For those programs where it is jointly developing and commercializing drugs in Alnylam's territories, Genzyme will pay 50 percent of the development costs.

Alnylam stands to receive milestones of up to $75 million per product for any of these programs.

For programs where Genzyme would have the worldwide rights, it will cover all costs, and Alnylam would be eligible for milestones of up to $200 million per product.

Alnylam also is eligible for tiered, double-digit royalties up to 20 percent of net sales on all products commercialized by Genzyme in its territories. For those drugs that are co-developed and co-commercialized in Alnylam's territories, the companies will split the profits equally with Alnylam booking net sales revenues.

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