West Coast Editor
The seemingly inevitable shoe took rather long to drop, but Wall Street applauded Alnylam Pharmaceuticals Inc.'s split from partner Merck & Co. Inc., which comes about 10 months after Merck made known its plan to buy Alnylam's rival in the RNAi space, Sirna Therapeutics Inc.
"We've been on the phone with just about all of our major institutional investors and others, and everyone gets it," said Barry Greene, chief operating officer of Cambridge, Mass.-based Alnylam, which has rescinded all grants of its intellectual property related to current and future Merck development programs, including former co-development efforts.
Alnylam's shares (NASDAQ:ALNY) closed Wednesday at $32.40, up $1.28.
The pact began in 2003 and was amended last summer, before Merck won a bidding war with London-based GlaxoSmithKline plc to take over Sirna, of San Francisco, for $1.1 billion. (See BioWorld Today, Nov. 1, 2006.)
"We were very open to understand what Merck's strategy was" in the Sirna takeover, Greene told BioWorld Today, and the pharma giant's unstated position became clear when it "continued to oppose intellectual property they took license to [from Alnylam] and valued."
The fight, or what's left of it, is taking place in Europe. "A key step in that process is the oral opposition proceedings, which happened last summer, and we won," Greene said, but the battle is not over.
Since signing the comparatively minor Merck deal, Alnylam has been busy signing other agreements in the hot RNAi space. Two years ago, the firm drew the attention of Basel, Switzerland-based Novartis AG for a deal worth up to $700 million, which included Novartis' buyout of almost 20 percent of the firm - as much as possible without having to consolidate the books. (See BioWorld Today, Sept. 8, 2005.)
In July, when Alnylam had just started Phase II trials with its lead product, the firm entered a nonexclusive licensing deal that could mean as much as $1 billion from Roche Holding AG, with $331 million up front that included an equity investment of $42.5 million for less than 5 percent of Alnylam's outstanding shares. (See BioWorld Today, July 10, 2007.)
Later the same month, Alnylam expanded its 2005 drug-device deal with Minneapolis-based Medtronic Inc., making the initial focus a Huntington's disease treatment consisting of an RNAi therapeutic delivered using Medtronic's implantable infusion pump. (See BioWorld Today, July 31, 2007.)
"Compared to the value and significance of Novartis, Medtronic and Roche, [Merck] really was not that big of a deal," Greene said. But since the Sirna buyout, Alnylam could hardly move ahead with its Merck deal without concerns that its competitor might be helped.
Less than two weeks ago, Alnylam made yet another deal, that one with Isis Pharmaceuticals Inc., of Carlsbad, Calif., establishing a joint venture called Regulus Therapeutics LLC, which will hold exclusive licenses to the firms' miRNA intellectual property, as well as several hundred Isis patents covering oligonucleotides. Regulus aims to develop second-generation antisense compounds to antagonize miRNA targets, and Alnylam is investing $10 million up front, with the companies sharing future funding equally. (See BioWorld Today, Sept. 10, 2007.)
Analyst Mike King with Rodman & Renshaw told BioWorld Today that it's hard to say whether GSK, loser to Merck in the bidding war for Sirna, might try for Alnylam, especially given the RNAi firm's partnerships with Novartis and Roche, but the point probably is moot.
"If you're talking about acquisitions," Greene said, "we've said as often as we can that we believe we can create greater value for our shareholders by doing other kinds of business development deals, like the Roche deal," which can generate continuous value, as opposed to a one-off takeover arrangement.
Alnylam will continue to forge such partnerships. "We're the key player to be talking to," he said.