RNA interference therapeutics developer Alnylam Pharmaceuticals Inc. has landed a sweeping deal with Sanofi’s Genzyme unit, revalidating the biotech’s technology platform three years after its original big pharma partners walked away.

News of the multi-product alliance Jan. 13 kicked off the J.P. Morgan Healthcare conference in San Francisco. The deal represents a resurrection of sorts for Alnylam, which was forced to lay off employees and retrench from a platform technology company into a product-focused biopharma after it lost Roche as a partner in 2010, while at the same time Novartis AG opted not to expand its partnership with the company Also see "Alnylam Shifts To Product-Focused Strategy As RNAi Platform Takes A Hit" - Pink Sheet, 17 January, 2011..

Alnylam’s retooling efforts, which gained traction in 2012 when the company presented positive clinical data on a lead product targeting the transthyretin (TTR) gene for the treatment of TTR-mediated amyloidosis and on a new method to deliver RNAi therapeutics subcutaneously, has paid off Also see "The Alnylam Turnaround: What Changed Investors’ Minds?" - In Vivo, 12 September, 2012..

Not only did Alnylam ink its largest deal yet with Sanofi, the company simultaneously announced it has acquired Merck & Co. Inc.’s Sirna Therapeutics Inc. subsidiary, once a fierce rival before Merck acquired the company in 2006 for $1.1 billion Also see "Merck Nabs Pole Position in RNAi With $1.1 Billion Sirna Buy" - In Vivo, 1 November, 2006.. The news cements Alnylam as the leader in the field of RNAi drug development. Alnylam said it has acquired Sirna’s RNAi assets including preclinical therapeutic candidates and delivery technologies for $175 million, of which $25 million is in cash and $150 million is in Alnylam stock.

Alnylam’s stock closed the day up 40.8% to $93.28.

Sanofi Takes A 12% Stake In Alnylam

For Genzyme, the partnership with Alnylam provides access to a pipeline of genetic-based medicines for rare diseases on a scale reminiscent of Sanofi’s multi-product collaboration with Regeneron Pharmaceuticals Inc.

At the heart of the multi-faceted deal, Genzyme will make a $700 million equity investment in Alnylam, acquiring a 12% ownership stake in the smaller company by buying newly issued stock at $80 per share, a 27% premium to the 30-day average prior to the execution of the agreement. In exchange, Sanofi will acquire certain rights to Alnylam’s current and future genetics medicines portfolio that reach proof-of-concept until 2020. Sanofi has the option to acquire up to a 30% stake in Alnylam during the life of the deal. The full value of the partnership is well over $1 billion, including the equity stake, R&D funding, milestone payments and royalties on product sales.

“We view this new relationship with Genzyme as transformational for Alnylam and believe it is a game-changer for both the advancement of RNAi therapeutics as a new class of genetic medicines to patients around the world and also for our commitment to build a leading independent biopharmaceutical company,” Alnylam CEO John Maraganore said during a same-day conference call, laying out the terms of the deal.

What Sanofi’s Money Buys

Option to Rest-of-World rights (ex-North America and Western Europe) to any product in Alnylam’s 5X15 genetic medicines portfolio or future genetic medicine that achieves proof of concept before 2020.
Immediate opt-in to RoW rights on patisiran in Phase III.
Co-development and co-commercialization rights on ALN-TTRsc in North America and Western Europe in addition to full RoW rights.
Rights to either co-develop/co-commercialize ALN-AT3 for hemophilia in Alnylam’s territories or a full global license to ALN-AS1 for the treatment of hepatic prophyrias, to be decided after PoC.
Global rights to a single future genetic medicine outside the scope of the 5x15 program.

Alnylam Retains Control

The alliance centers on the genetic medicines in Alnylam’s 5X15 portfolio – the name Alnylam gave to investors in 2011 to describe its turnaround initiative, mainly a goal of having five RNAi programs in advanced clinical development by 2015. More recently, on Jan. 10, Alnylam announced it is on track to exceed the five-product guidance and place six to seven programs in clinical development by the end of 2015, including at least two in Phase III and five to six with proof-of-concept data.

“There has been a tendency in our industry to just go buy this stuff up, and I think in so doing you tend to lose all of the great people who are actually developing this,” Sanofi CEO Chris Viehbacher said.

The deal is structured in a way that Alnylam retains significant ownership and control over the programs. Alnylam retains product rights in North America and Western Europe, while Genzyme gains rights to the pipeline programs in the rest of the world. Genzyme has the right to opt in to each of the programs after they reach proof-of-concept. Alnylam maintains control of the development prior to the opt-in and maintains development and commercialization rights for all programs in its territory.

“From a series of back and forth,” said Alnylam Chief Operating Officer Barry Greene in an interview at J.P. Morgan, “we ended up with a structure that secures our independence, allows us to control our pipeline and destiny while leveraging Genzyme’s incredible infrastructure, speeding our medicines to patients around the world.”

Sanofi CEO Christopher Viehbacher expanded on the structure of the deal during the conference call and explained why Sanofi was willing to leave so much in Alnylam’s control.

“There has been a tendency in our industry to just go buy this stuff up, and I think in so doing you tend to lose all of the great people who are actually developing this, so owning it isn’t necessarily a way of progressing it,” he said. He pointed to Merck’s sale of the Sirna assets at such a discount as a sign of a failed deal-making model.

“The whole thought process of this deal is there are some brilliant people within Alnylam, Genzyme has some brilliant people who can help them accelerate some of the development and certainly the commercialization, and therefore, the idea is to fund a partnership where everybody can contribute,” he added.

Genzyme and Alnylam have gotten to know each other in part because of their proximity to one another in Cambridge, Mass., Viehbacher said. The two also are partnered already on two of Alnylam’s lead programs. Genzyme licensed rights to patisiran (ALN-TTR02) and a subcutaneous formula, ALN-TTRsc, in Japan and the broader Asia-Pacific region in 2012 [See Deal].

Patisiran and the subcutaneous formula are targeting the transthyretin (TTR) gene for the treatment of two rare diseases. Partisiran is in Phase III development for TTR-mediated amyloidosis in patients with familial polyneuropathy (FAP) and ALN-TTRsc is in Phase II development for familial amyloidotic cardiomyopathy (FAC). FAP affects about 10,000 people worldwide and FAC affects about 40,000 people worldwide, according to the company.

Genzyme plans to immediately opt in to patisiran for the ROW territories, the companies said, while Alnylam will retain product rights in North America and Western Europe. The two partners also will expand the arrangement for ALN-TTRsc so that they will co-develop and co-promote the product in North America and Western Europe, with Genzyme developing and commercializing in ROW territories.

Retaining full development and commercial control in North America and Europe to most of its assets is critical to Alnylam’s long-term business strategy, Maraganore said. But, he added, “We are not inflexible on this point.” The company agreed to give Genzyme broader rights to ALN-TTRsc because it expects the therapeutic area could require more market development and commercial resources, he said. Plus, the company is looking to develop the product in other areas too, such as senile systemic amyloidosis manifestations.

In addition, Genzyme can choose to either co-develop and co-promote ALN-AT3 for the treatment of hemophilia and other rare bleeding disorders in Alnylam’s territory, part of a co-development and co-commercialization deal, or it can take a global license to ALN-AS1 for the treatment of hepatic prophyrias. Genzyme will choose which program to move on following POC, likely in 2016.

Genzyme also obtained rights for a global license to a single future genetic medicine program that is not currently defined as a 5x15 program, the firms said. Meanwhile, Alnylam retains global rights to any RNAi therapeutic genetic medicine program that does not reach POC by 2020 and retains full rights to all programs outside the field of genetic medicines.

Alnylam’s Comeback: RNAi Developer Partners With Sanofi/Genzyme

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