Alnylam acquires Sirna Therapeutics from Merck

Strategic transaction to gain investigational RNAi therapeutics, along with new Genzyme alliance, cap off a “transformational” year

Jeffrey Bouley
CAMBRIDGE, Mass.—Although Alnylam Pharmaceuticals Inc. CEO Dr. John Maraganore used the word “transformational” to describe his company’s full-year 2013 performance in mid-February, he also used the same breath to call the first few weeks of 2014 transformational as well, which may not be an exaggeration, given the company announced an alliance with Genzyme one day in January and the acquisition of Merck & Co.’s investigational RNAi therapeutics the very next.
 
The gaining of Merck’s RNA interference (RNAi) intellectual property and assets—including preclinical therapeutic candidates, chemistry, siRNA-conjugate and other delivery technologies—was achieved almost wholly by acquiring Merck subsidiary Sirna Therapeutics.
 
Merck paid $1.1 billion for Sirna back in 2006, but Alylam got the company for the relative steal of $175 million in cash and equity ($25 million cash and $150 million in Alnylam common stock).
 
As Marko Kozul, an analyst with Leerink Partners, noted of the transaction, Merck hasn’t been able to leverage the Sirna assets all these years; however, in Alnylam’s hands the Sirna assets may be worth more than $175 million.
 
Maraganore believes the acquisition of Sirna Therapeutics “will complement and extend our own progress and continued focus on RNAi therapeutics, including siRNA-conjugate technologies. Indeed, we believe that the acquisition of Merck’s RNAi technologies and intellectual property will further our efforts to build a new class of medicines, advancing them to patients in need.”
 
In addition to the $175 million up front, Merck is eligible to receive as much as $105 million in developmental and sales milestone payments per product, as well as single-digit royalties, associated with the progress of certain preclinical candidates discovered by Merck. Merck is also eligible to receive as much as $10 million in milestone payments and single-digit royalties on Alnylam products covered by Sirna Therapeutics’ patent estate.
 
“Scientists at Merck have made important contributions to the advancement of RNAi therapeutics, particularly in the design and engineering of RNAi molecules with enhanced drug-like properties,” said Iain D. Dukes, senior vice president of business development and licensing at Merck Research Laboratories. “We believe this agreement positions Sirna Therapeutics’ therapeutic RNAi assets with a company that has the focus and commitment necessary to harness their potential. This is consistent with our strategy to reduce emphasis on platform technologies and prioritize our R&D efforts to focus on product candidates capable of providing unambiguous promotable advantages to patients and payers.”
 
Then around the same time came the news that Alnylam and Genzyme had formed an alliance—which officially closed Feb. 27, following the expiration of the Hart-Scott-Rodino waiting period—for the development and commercialization of RNAi therapeutics as genetic medicines and “to accelerate and expand the development and commercialization of RNAi therapeutics across the world.”
 
Alnylam will retain product rights in North America and Western Europe, while Genzyme will obtain the right to access Alnylam's current “5x15” program (see sidebar “What is the Alnylam 5x15 program?”) and future genetic medicines pipeline in the rest of the world, including global product rights for certain programs. In addition, Genzyme becomes a major Alnylam shareholder through an upfront purchase of $700 million of newly issued stock at approximately $80 per share, giving Genzyme an ownership position of around 12 percent.
 
According to Alnylam, “This alliance significantly bolsters Alnylam's balance sheet to over $1 billion in cash, enabling an increased investment in the company's RNAi therapeutics pipeline, and is expected to secure Alnylam's financial independence through to multiple product launches.”
 
As Maraganore puts it, “We believe our recent alliance with Genzyme is a game changer in our efforts to bring RNAi therapeutics to patients with rare diseases as potential breakthrough genetic medicines. The new collaboration crystallizes Alnylam's strategy to develop and commercialize our products in North America and Western Europe while Genzyme advances our products in the rest of the world. It also solidifies our balance sheet, enabling an increased investment in an expanded number of RNAi therapeutic programs while securing a cash runway that we believe provides us with financial independence to develop and launch multiple products.”
 
Zacks Investment Research found the deal with Merck and the expanded relationship with Sanofi (as the parent company of Genzyme) “encouraging” and noted that while neither Big Pharma deal will help Alnylam generate revenues from royalties, they may help Alnylam by taking its RNAi technology outside its core focus area.
 
“Genzyme holds a longstanding commitment to improving the lives of patients through the development and commercialization of treatments for rare diseases, both through internal R&D and by working with valuable external collaborators,” said Dr. David Meeker, president and CEO of Genzyme, in an official statement about the deal. “Our relationship with Alnylam has been highly collaborative, and we believe that their world-class RNAi technology holds the promise to provide a platform for sustained drug development for rare genetic diseases for years to come. With this new alliance, we are significantly broadening our relationship with Alnylam and expanding Genzyme's pipeline of innovative medicines for the treatment of genetic diseases.”
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What is the Alnylam 5x15 program?
 
The Alnylam 5x15 development pipeline and genetic medicine strategy was launched in January 2011 to establish a path for development and commercialization of novel RNAi therapeutics toward genetically defined targets for the treatment of diseases with high unmet medical need.
 
As recently updated in early 2014, the company expects by the end of 2015 to have six to seven RNAi therapeutic programs in clinical development, including two programs in Phase 3, and five to six programs with human proof of concept.
 
Programs in progress so far target such conditions as familial amyloidotic polyneuropathy, familial amyloidotic cardiomyopathy,  hemophilia, complement-mediated disease, porphyria and acute intermittent porphyria, AAT deficiency liver disease, beta-thalassemia and iron-overload disorders, hypercholesterolemia, mixed hyperlipidemia and severe hypertriglyceridemia.

Jeffrey Bouley

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