Wednesday, December 17, 2008

Deals of the Year Nominee: Alnylam/Takeda

Ah, awards season. Why should film critics have all the fun? And voting! It's not just for presidential elections. This year your IN VIVO Blog team is nominating a handful of alliances, acquisitions, financings, regulatory negotiations and legislative compromises in our First Annual DOTY competition. And then you, dear readers, will vote (early and often, we hope) for the winner. Imaginary federal and international biopharmaceutical statutes prohibit us from awarding a monetary prize. But our winners, when they die, on their deathbeds, they will receive total consciousness. So they've got that going for them, which is nice.

This year's biggest RNAi deal isn't quite as big as last year's biggest RNAi deal, but we like Alnylam's Japanese alliance with Takeda nonetheless. First off it reinforces Takeda's position as one of 2008's pre-eminent dealmakers--the February Amgen alliance and the April acquisition of Millennium were its first two big noises this year--and it also marks Alnylam's move from simple-yet-unprecedented platform monetization into the kind of technology-for-product-rights deal that could see it gaining access to others' development candidates.

At the time of the deal we intentionally mangled Alnylam CEO John Maraganore's kegger analogy by which he describes RNAi's potential to help relieve the productivity problem in drug development and provide free beer for all mankind. (Did we do so again? Oh dear.) It's fair to say that this remains a ways off, but meanwhile Takeda's cash ought to keep the fridge full in Cambridge.

Alnylam received $100 million in up-front cash and $50 million in near-term technology transfer payments for a non-exclusive license to its RNAi platform in oncology and metabolic disease, and first right of negotiation on its RNAi programs in Asia (excluding ALN-RSV01) should Alnylam look for a partner there. Alnylam also gets first right of negotiation on any project Takeda decides to shop in the US and more importantly, gets opt-in rights for 50/50 co-development/co-commercialization deals in the US on up to four Takeda programs of its choosing (exercisable all the way through the start of Phase III), plus the usual gajillion biobucks in development and commercial milestone payments.

As we noted when the May deal was signed: it bears repeating that Alnylam has once again struck a non-exclusive deal--and can go out and re-license those same therapeutic areas again at any point. That said, on the call to announce the deal Maraganore essentially laid down some ground rules. "We wouldn't do a platform license for a double-digit upfront payment," he said. "Given the opportunity cost of enabling a partner we have to and will be very discriminate in how we value these kinds of partnership alliances."

In other words, pony up $100 million or it's not worth our time and effort. How many triple-digit deals it can do before its proposition is diluted below the $100 million low-water mark remains to be seen (it hasn't done any since, though there is plenty of time to fulfil its stated goal of two or more new partnerships through the end of 2009).

In these cash-constrained times, the deal allows Alnylam to end the year with approximately $500 million in cash. It makes Takeda the sole big RNAi player in Japan (though Japanese rights to Alnylam's Phase IIALN-RSV01 product were not included in the deal and later licensed to Kyowa Hakko [our take here]) and cement's the Japanese pharma's place among the most active and creative dealmakers of 2008. And it sets the RNAi pioneer up for pipeline building down the road.

Readers, it's up to you. The voting begins next week and will be open into the new year. No stuffing the ballot box!

image via flickr user furiousgeorge81 used under a creative commons license.

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