A $2 billion deal with Blackstone Group Inc. is setting Alnylam Pharmaceuticals Inc. up so that it doesn’t have worry about future equity financing and instead can concentrate on RNAi R&D.
In the massive deal, Blackstone will acquire 50% of royalties owed to Cambridge, Mass.-based Alnylam on the global sales of inclisiran, which is designed to treat hypercholesterolemia. The twice annually injectable proprotein convertase subtilisin/kexin type 9 (PCSK9) gene inhibitor is being reviewed by the FDA.
Inclisiran has passed through a few hands and, as with Blackstone, it continues to gather fingerprints of investors. Novartis AG, which acquired inclisiran from The Medicines Co. late in 2019, obtained global rights to develop, manufacture and commercialize inclisiran under a license and collaboration agreement with Alnylam. The drug could become the first siRNA-based PCSK9 inhibitor to win FDA approval.
Inclisiran is one of 11 potential blockbusters on the 2020 Cortellis Drugs to Watch list, which notes that inclisiran might “leverage its competitive profile, with its twice-a-year dosing (which could abrogate compliance issues) combined with similar efficacy to the PCSK9 monoclonal antibodies, to drive patient initiation on inclisiran” ahead of those compounds, which include Repatha (evolocumab) from Amgen Inc., of Thousand Oaks, Calif., and Praluent (alirocumab) from Paris-based Sanofi SA and Regeneron Pharmaceuticals Inc., of Tarrytown, N.Y. Praluent is administered by injection every two weeks. Repatha is given as a shot every two weeks or monthly. Repatha currently stands as the PCSK9 leader in the U.S., with 66% share of total prescriptions and 75% of new prescriptions.
The Blackstone-Alnylam deal is similar to the paydown of a loan. Blackstone will purchase 50% of any royalties paid to Alnylam by Novartis on inclisiran’s global sales. Alnylam is eligible to receive tiered double-digit royalties up to 20% on global sales, which the company expects to average in the high teens. Fifty percent of the royalty stream will flow to Blackstone while Alnylam books 100% royalties as revenue.
“With this component of the deal, Blackstone will pay $1 billion, broken up into two equal payments of $500 million, the first of which we receive at the closing and the second payment occurring on Sept. 30, 2021,” Yvonne Greenstreet, Alnylam’s president and chief operating officer, said on Monday morning’s conference call. “Importantly, the second $500 million payment is time-based and not contingent on achievement of any specific event.”
Should Blackstone not receive $1 billion in total proceeds from inclisiran royalties through the end of 2029, Blackstone’s share increases to 55% beginning the following year. Greenstreet said Alnylam fully expects Blackstone to receive its $1 billion in royalties by the end of 2029.
The transaction also includes up to $750 million in a first lien senior secured term loan led by GSO Capital Partners, which worked with Blackstone on the deal, plus up to $150 million from Blackstone Life Sciences to develop Alnylam’s cardiometabolic programs vutrisiran and ALN-AGT and a $100 million purchase of Alnylam common stock.
In the meantime, Alnylam is looking at the monetary strength the deal gives the company and what it wants to do with it. Jeffrey Poulton, Alnylam’s executive vice president, chief financial officer and principal financial and accounting officer, said that by 2025, if all goes according to plan, the company will have up to six additional revenue drivers in the market, including two additional new products, two potential label expansions and two potential royalty streams from products launched by collaborators Novartis and Sanofi. Alnylam and Sanofi are collaborating on the phase II OLE study of fitusiran, an RNAi therapeutic in development to treat hemophilia.
The deal was powered by Blackstone’s $3.4 billion financing for its eighth Strategic Partners secondaries fund last year.
Alnylam stock (NASDAQ:ALNY) rose 2.26% to close at $119.01 on April 13, while Blackstone stock (NYSE:BX) dipped 3.23% to close at $47.58.