The scientific teams of Regeneron Pharmaceuticals Inc. and Alnylam Pharmaceuticals Inc. have "enough work to occupy us for the next 10 years comfortably," thanks to known genetically validated targets, according to the latter's R&D chief, Akshay Vaishnaw. "Having said that, new targets will continue to emerge."
Tarrytown, N.Y.-based Regeneron is pledging $800 million in up-front cash and equity, along with as much as $200 million in near-term milestones, to Alnylam, of Cambridge, Mass., in a deal to discover, develop and commercialize RNAi therapies by taking aim at targets in the eye and central nervous system (CNS) plus some in the liver.
Alnylam has turned up preclinical findings that show potent and durable delivery of RNAi candidates to silence genes in the eye and CNS. Regeneron brings its Velocisuite technologies – a collection of methods that allows scientists to determine which genes are the best targets and then quickly make fully human antibodies – and the Regeneron Genetics Center (RGC).
Specifically, Regeneron has agreed to make a $400 million up-front payment to Alnylam and to buy $400 million of Alnylam equity at a price per share of $90 (4.44 million common shares), based on the volume-weighted average price over the last 15-trading-day period. Alnylam's potential $200 million in milestone payments are linked to criteria during early clinical development for the eye and CNS programs. The companies plan to push programs directed at 30 targets and introduce many into clinical development during the initial five-year discovery period, which includes an option to extend. For each program, Regeneron is providing Alnylam with $2.5 million in funding at the start and $2.5 million more at lead candidate identification, translating to the possibility of $30 million in annual discovery funding to Alnylam as the alliance matures.
Regeneron will lead development and commercialization for all programs targeting eye disorders, with Alnylam in line for potential milestone and royalty payments. CNS efforts will be jointly advanced with alternating leadership, the lead party taking on global development and commercial work. Both companies will have the option at the point of candidate selection to take part equally in would-be profits from programs steered by the other party.
With regard to the liver, programs include a planned joint effort evaluating anti-C5 antibody-siRNA combinations for C5 complement-mediated diseases, including Regeneron's pozelimab (REGN-3918) for paroxysmal nocturnal hemoglobinuria, which has reached the phase I stage, with Alnylam's phase II RNAi player, cemdisiran. Alnylam keeps control of cemdisiran in atypical hemolytic-uremic syndrome as a monotherapy and Regeneron will take the helm of combo projects. The parties will split investment and potential profits on the monotherapy bid, and Alnylam stands to collect royalties on combo sales. For all other liver programs in the tie-up, parties will alternate leadership and participate equally in profits that might come.
The companies are still moving ahead with their pact to identify RNAi prospects for nonalcoholic steatohepatitis, based on novel RGC findings. Alnylam hangs onto broad global rights to all of its other unpartnered liver-directed programs.
During a conference call with investors, Stifel analyst Paul Matteis wanted to know if the companies would pursue more known, established targets or a greater variety of new ones. CEO John Maraganore said the partners "see opportunities in both cases, because of the unique and differentiated properties of RNAi. It's not insignificant if we are able to achieve a one every six monthly or even less frequent dosing regimen intrathecally. That is huge value." He noted that Alnylam has disclosed a CNS program with ALN-APP, an RNAi therapeutic targeting amyloid precursor protein for the treatment of cerebral amyloid angiopathy associated with intracerebral hemorrhage. Work on that compound "will now flow through the collaboration," he said.
Sanofi phase winds down
R&D chief Vaishnaw pointed to Alnylam's work with genetically validated liver targets. "Of course, this is what attracted Regeneron," he said, along with the promise of durable treatment with RNAi. "There's a very large array of targets. We've begun work in the research context on many" of them, and with Regeneron will "stage-gate the appropriate sequence between CNS and eye. The first step is to get the ALN-APP drug to the clinic next year."
Planned are two to four INDs per year, with CNS and eye making up "a good proportion of that activity," he said.
Cowen analyst Yaron Werber, covering Regeneron, said he was "glad to see this sizable commitment to novel technology given risks" competitively to the firm's ophthalmology drug, Eylea (aflibercept). He called CNS disorders "ripe" for the RNAi strategy and in a report deemed the collaboration "an important deal that is in the right direction." At last year's American Society of Hematology meeting, he noted, Regeneron offered phase I data with REGN-3918, showing the drug well-tolerated with only one severe adverse event of salpingitis (inflammation of the fallopian tubes) in a patient with an intra-uterine device, which has resolved. The compound "demonstrated a dose-response on efficacy, but is not competitive enough" against Soliris (eculizumab, Alexion Pharmaceuticals Inc.) and is "lagging in development in a competitive field. Hence, this deal adds a new strategic angle that can help Regeneron and Alnylam differentiate their products."
Separately, Alnylam also said it has agreed with Sanofi SA, of Paris, to finish up the research and option phase of their RNAi deal signed in 2014 to go after rare genetic diseases. The material collaboration terms for patisiran (marketed as Onpattro for hereditary transthyretin-mediated amyloidosis), vutrisiran and fitusiran will continue unchanged, as already disclosed. Alnylam will advance an investigational asset in an undisclosed disease through the end of IND-enabling studies, with Sanofi due to handle any potential further development or commercialization of that asset. If the candidate finds its way to the market, Alnylam stands to bank tiered double-digit royalties on global net sales. The two companies also have agreed to amend certain terms of the companies' equity agreement, with Sanofi granted a release of its lock-up of Alnylam stock holdings, subject to certain trading restrictions.
Shares of Alnylam (NASDAQ:ALNY) closed Monday at $90.17, down $2.62. Regeneron's stock (NASDAQ:REGN) ended at $401.26, down $7.68.