Date: Jan 13, 2014 Author: Don Seiffert Source: bizjournals (
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by: Don Seiffert
A deal that an executive at Alnylam Pharmaceuticals called "transformational" not only for the company, but the cutting-edge technology known as RNA interference, boosted the company's stock price more than 50 percent this morning to a new all-time high.
Alnylam said this morning that Genzyme Corp., a Cambridge neighbor and partner in the development of its drugs for rare diseases, bought $700 million worth of new stock in the company, instantly becoming a major shareholder with 12 percent ownership. Alnylam's largest stockholder remains Fidelity Investments.
Genzyme, a biotech firm owned by French drug giant Sanofi that previously had a partnership with Alnylam for development of its lead drug, paid $80 per share for the stock. That's 27 percent higher than Alnylam's average share price over the last 30 days. Still, investors pushed the company's share prices even higher as of 1 p.m. today, up 45 percent to more than $95 a share.
Alnylam has not reported its end-of-the-year financial figures for 2013. But Laurence Reid, senior vice president and chief business officer, said that it previously said it expected to report $325 million in cash as of Dec. 31. The $700 investment brings the biotech's cash holding to more than $1 billion.
"That really gives us a substantial boost," said Reid. "It's a game-changer."
In a complex partnership agreement that covers any drugs in Alnylam's pipeline that show proof-of-concept before the end of 2019, Genzyme will have the option to take over development and for commercialization outside of North America and Western Europe. In addition, it gives Genzyme expanded rights to patisiran, Alnylam's most advanced drug. Patisiran is intended as a treatment for TTR-familial amyloid polyneuropathy, a rare, life-threatening disease that damages the nervous system, and began a Phase 3 clinical trial in recent weeks.
Genzyme also now has options for a larger partnership on Alnylam's other drugs, which are all based on so-called RNA interference and can effectively turn off disease-causing genes. The discovery of RNA interference was awarded the 2006 Nobel Prize in Medicine, and while several companies around the world are developing such drugs, Alnylam now appears to closest to bringing one to market.
Marko Kozul, an analyst with Leerink Partners, said in a research note this morning that "the expanded collaboration deal terms are attractive" even beyond the $700 million payment, "demonstrating large pharma validation for a modular and reproducible RNAi technology platform that ALNY has cultivated."
Alnylam also announced today that it has purchased the outstanding assets of the Merck & Co.'s subsidiary, Sirna, for $175 million. Reid said that none of the drugs the company was developing had yet reached human trials, but the acquisition significantly increases the number of early-stage drugs Alnylam now owns.
Alnylam ended 2013 as one of the year's biggest stock-gainers, with more than a 250 percent increase. Today's news means the company's stock has shot up almost five-fold from its value a year ago.
