Alnylam/Roche: IP, IP, Hooray!

Alnylam and Roche's major alliance in RNA interference could be worth more than $1 billion plus royaties to the biotech company. Unusually for an RNAi deal, those biobucks terms aren't completely back-end-loaded, and Alnylam will walk away on close with $331 million in upfront payments.

Two minutes in the penalty box up-front, with up to
twenty-three hours in total potential penalty minutes

So what does $331 million buy these days? Roche is taking a roughly 5% stake in the RNAi company, buying 1.975 million shares at $21.50 apiece, a more than 40% premium to the company's Friday close (though below the company's 52-week high). (Those shares--already turning a profit--are subject to a two-year lockup, and the companies agreed to a three-year standstill agreement.) Roche is also snapping up Alnylam's European research site in Kulmbach, Germany, complete with 40 employees, which Alnylam values at $15 million.

That leaves roughly $275 million, which covers Roche's non-exclusive license to all of Alnylam's existing IP in four therapeutic areas: oncology, respiratory diseases, metabolic diseases, and a subset of liver disease (Alnylam will collaborate with Roche on one or more targets within those areas). Roche can tack on additional therapeutic areas, for a price.

That's a lot of dough considering Alnylam can turn around and license its IP in those same areas tomorrow to another pharmaceutical company. According to CEO John Maraganore: "The license to Roche is non-exclusive, so the targets they can work on , as long as they haven't been exclusively licensed to other partners, Roche can pursue. But we are free to license those same fields to other third parties and we are free ourselves to work on any targets in those fields."

Talk about monetizing IP. This alliance changes the game in RNAi, which until the 2006 headline grabbing acquisition of Sirna Therapeutics by Merck had been a field dominated by deals boasting big-biobucks figures but small upfront payments.

Earlier this year we talked about the proliferation of RNAi technology beyond the confines of Alnylam and Merck, thanks to a surge of investment and drug development advances. It is this phenomenon that has enabled companies like Silence Therapeutics (nee SR Pharma) to strike its RNAi deal with AstraZeneca, certainly a validating moment for that biotech. But it remains a relatively select club compared to the various protein therapeutics-enabling technologies available as antibodies began ot hit their stride. Can purveyors of other technology platforms emulate Alnylam's success?

As we asked then: is there enoughRNAi IP to go around? Apparently there is, but it's pricey. We'll have more on these deals in the next IN VIVO.