SAN FRANCISCO – As Wall Street calmed in the wake of Alnylam Pharmaceuticals Inc.’s double shot of news – a $700 million expansion of the pact with Sanofi SA’s Genzyme unit, and the $175 million buyout of RNAi peer Sirna Therapeutics Inc. – investor eyes turned to the prospects of ALN-TTR-sc, the subcutaneous therapy targeting transthyretin (TTR), in Phase II trials for familial amyloid cardiomyopathy (FAC).
Data from the FAC trial are due near the end of this year, and Deutsche Bank analyst Alethia Young pegged the chances of success as 50/50.
Cambridge, Mass.-based Alnylam disclosed that Genzyme, also of Cambridge, bought $700 million worth of Alnylam’s shares at $80 each, a 27 percent premium to the average share price over the last month. Alnylam’s stock (NASDAQ:ALNY) closed Monday at $93.28, up $27.07, or 41 percent.
The headline-making move – which gave Genzyme about a 12 percent stake and made the company a major shareholder in Alnylam, with significantly broader rights to its collaborator’s lineup of RNAi candidates – also stole the show at the J.P. Morgan Healthcare Conference.
Alnylam CEO John Maraganore told investors during a conference call ahead of the company’s presentation at the meeting that the company had carefully thought out reasons for the differing arrangements with Genzyme regarding the pair of TTR-targeting therapies involved. Another is patisiran (ALN-TTR-02) for familial amyloidotic polyneuropathy (FAP).
“The distinction that we made in our mind as we crafted the alliance with Genzyme was that patisiran is addressing a more focused market of the FAP indication, where we believe that we can adequately address that market and build our commercial activities as Alnylam in North America and Europe,” he said. “Of course, Genzyme will expand their relationship on that program in the rest of the world.”
But with ALN-TTR-sc, “we think there’s an important need to develop that market, develop the awareness around genetic cardiomyopathy in various populations across the world,” Maraganore said. “We also think ultimately that a broader commercial scale will be important to get the most value out of that product.”
Barry Greene, Alnylam’s president and chief operating officer, called the cardiomyopathy indication “very significant,” and said that, “given the strength of Genzyme globally and our ability to develop that market, we’re better off doing it together. Ultimately, getting the patients fast and developing the market quickly will be valuable for all of us.”
Leerink Partners analyst Marko Kozul wrote in a research report that, while the deal terms are “substantial” when considered alone, Alnylam “has further upside that would not have been captured by a [merger] transaction, so the best Genzyme could do was become a major Alnylam shareholder and participate in the upside.”
RBC Capital Markets analyst Michael Yee said the wider Alnylam deal with Genzyme parent Sanofi, of Paris, proves amyloidosis interest by major pharma, and represents a “positive” for Dublin-based Prothena Corp. plc, which is “peripherally aligned” in the indication.
Last fall, when Prothena raised $130 million in an offering, the company said funds would boost, among others, the Phase I amyloidosis product NEOD001, which is designed not to react with normal serum amyloid A, but only with the abnormal cleaved form of amyloid. (See BioWorld Today, Oct. 4, 2013.)
Prothena’s stock (NASDAQ:PRTA) closed Monday at $24.65, down $2.34.
Alnylam, left with about $1 billion in cash in its coffers as a result of the deal, used some of its resources to buy Merck & Co.’s subsidiary, one-time rival Sirna Therapeutics Inc., another RNAi player, in a separate transaction. Deutsche Bank’s Young called the purchase “a smart strategic move, especially on the patent front.”
Alnylam is paying $25 million in cash and $150 million in stock, with the promise of as much as $115 million in milestone payments and royalties to Merck, of Whitehouse Station, N.J., which bought Sirna for $1.1 billion in 2006, but has done little with the assets. (See BioWorld Today, Nov. 1, 2006.)
Broadening a partnership that began in 2012, Alnylam is allowing Genzyme, more rights to patisiran. Under the original deal, Genzyme had rights to commercialize patisiran in Japan and the broader Asia-Pacific region, where FAP is especially prevalent. The new terms call for Genzyme selling the compound in all territories outside of North America and Western Europe, which Alnylam keeps.
Patisiran started a Phase III trial called APOLLO in November in TTR-mediated amyloidosis.
Genzyme also gets rights to commercialize worldwide three products in Alnylam’s pipeline, with the pair co-developing and co-commercializing ALN-TTR-sc in North America and Western Europe, and Genzyme handling the rest of the world.
Alnylam is granting option rights to two other candidates after first trials are completed. Genzyme can choose between full global rights or a co-commercialization arrangement.
Until 2020 – possibly extending through 2021 – Alnylam is giving Genzyme the option to develop and commercialize outside of North America and Western Europe all products in the pipeline that are being developed to treat rare genetic diseases, though Alnylam is hanging onto rights to co-develop and co-commercialize in those territories.
For patisiran, Genzyme is paying 20 percent of global development expenses. For ALN-TTR-sc and possibly ALN-AT3 (one of the option compounds, a preclinical therapy targeting antithrombin), the companies would split global development costs.
With programs outside of Alnylam’s “5x15” program – five candidates in the clinic by 2015 – where Genzyme has an opt-in right, Genzyme would pay all development expenses worldwide.
Alnylam also could get milestone payments of up to $75 million per compound for those programs that are co-developed and co-promoted regionally, and $200 million related to each that is brought forward globally.
Double-digit royalties of up to 20 percent could come to Alnylam from all products sold by Genzyme in its territories; in Genzyme’s co-development/co-promotion products in Alnylam’s territories, the pair will split profits, with Alnylam booking net sales revenues.