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|Alnylam Provides Update on Novartis Collaboration, Announces Corporate Restructuring, and Reaffirms Financial Guidance for 2010|
CAMBRIDGE, Mass., Sep 23, 2010 (BUSINESS WIRE) --
Alnylam Pharmaceuticals, Inc. (Nasdaq: ALNY), a leading RNAi therapeutics company, announced today that Novartis has notified Alnylam that they have formally selected their full and final list of 31 targets, for which they have exclusive rights to discover, develop, and commercialize RNAi therapeutics using Alnylam intellectual property and technology. In return, for any RNAi therapeutic products Novartis develops against these targets, Alnylam is entitled to receive significant milestone payments upon achievement of certain specified development and annual net sales events. In addition, Novartis has notified Alnylam that they have declined their option to execute an Adoption License per the terms of the original 2005 agreement. Novartis has informed Alnylam that they remain fully committed to advance their RNAi therapeutic programs based on their rights to Alnylam intellectual property and technology.
Alnylam also announced today that they will effect a corporate restructuring with an approximately 25% to 30% reduction in overall workforce, as a result of completing the fifth and final planned year of the Novartis alliance. Finally, Alnylam is reaffirming its financial guidance of ending 2010 with greater than $325 million in cash.
"Over the last five years, Novartis has been an important collaborator, and we look forward to their continued efforts in advancing a robust pipeline of RNAi therapeutics toward over 30 disease targets, now fully selected, through their access to Alnylam intellectual property and technology. We stand to benefit greatly in their continued success," said John Maraganore, Ph.D., Chief Executive Officer of Alnylam. "At the same time, we also welcome this new period in Alnylam's development with both reduced need for allocation of service-based collaboration resources and substantially greater freedom in forging new major partnerships.
"Alnylam continues to be in a very strong position to execute on its mission of building a leading biopharmaceutical company based on RNAi therapeutics as a whole new class of innovative medicines," continued Dr. Maraganore. "From this position of strength and due to the upcoming completion of our five-year collaboration with Novartis, we have decided to effect a corporate restructuring that will enable us to optimally position our company for continued growth and success. While a difficult decision to make at a personal level, we are convinced that it is an important step in building our company for the long term. As we implement this change, we are grateful to our employees, both past and present, for their dedication, passion, and commitment in advancing RNAi therapeutics to patients."
Alnylam will hold a webcast conference call on Friday, September 24, 2010 at 8:00 a.m. ET to discuss these updates and provide context in relation to Alnylam's continued execution on its business plan.
Alnylam's RNAi therapeutics partnership with Novartis was formed in 2005 and was structured as a three-year collaboration, with Novartis having the right to extend the agreement for an additional fourth and fifth year; Novartis elected to continue for both a fourth and fifth year. Per the terms of the agreement, Novartis has executed their right to fully select 31 designated disease targets for the exclusive discovery, development, and commercialization of RNAi therapeutic products under Alnylam intellectual property and technology. For any RNAi therapeutic products Novartis develops against these targets, Alnylam is entitled to receive significant milestone payments upon achievement of certain specified development and annual net sales events. Further, Novartis has notified Alnylam that they have declined their option to execute their Adoption License option for non-exclusive access to Alnylam fundamental and chemistry intellectual property per the terms of the 2005 agreement.
Restructuring and Guidance Details
As a result of the planned completion of the Novartis collaboration, Alnylam intends to reduce its workforce by approximately 25% to 30%. Alnylam expects that this reduction in personnel costs, along with other external costs, will result in a savings of approximately $25 million in 2011 cash operating expenses. In addition there will be one-time charges related to the personnel reductions of approximately $3 million, the majority of which will be incurred in the third quarter of 2010. Alnylam is reaffirming its financial guidance to end 2010 with greater than $325 million in cash.
Conference Call Information
Alnylam will hold a webcast conference call to discuss these updates and provide context in relation to Alnylam's continued execution on its business plan. The call will be held on Friday, September 24, 2010 at 8:00 a.m. ET. To access the call, please dial 866-730-5768 (domestic) or 857-350-1592 (international) five minutes prior to the start time and provide the passcode 40267990. A replay of the call will be available beginning at 11:00 a.m. ET on September 24, 2010. To access the replay, please dial 888-286-8010 (domestic) or 617-801-6888 (international), and provide the passcode 14333251. A live audio webcast of the call will also be available on the "Investors" section of the company's website, www.alnylam.com. An archived webcast will be available on the Alnylam website approximately two hours after the event.
About RNA Interference (RNAi)
RNAi (RNA interference) is a revolution in biology, representing a breakthrough in understanding how genes are turned on and off in cells, and a completely new approach to drug discovery and development. Its discovery has been heralded as "a major scientific breakthrough that happens once every decade or so," and represents one of the most promising and rapidly advancing frontiers in biology and drug discovery today which was awarded the 2006 Nobel Prize for Physiology or Medicine. RNAi is a natural process of gene silencing that occurs in organisms ranging from plants to mammals. By harnessing the natural biological process of RNAi occurring in our cells, the creation of a major new class of medicines, known as RNAi therapeutics, is on the horizon. Small interfering RNAs (siRNAs), the molecules that mediate RNAi and comprise Alnylam's RNAi therapeutic platform, target the cause of diseases by potently silencing specific mRNAs, thereby preventing disease-causing proteins from being made. RNAi therapeutics have the potential to treat disease and help patients in a fundamentally new way.
About Alnylam Pharmaceuticals
Alnylam is a biopharmaceutical company developing novel therapeutics based on RNA interference, or RNAi. The company is applying its therapeutic expertise in RNAi to address significant medical needs, many of which cannot effectively be addressed with small molecules or antibodies, the current major classes of drugs. Alnylam is leading the translation of RNAi as a new class of innovative medicines with peer-reviewed research efforts published in the world's top scientific journals including Nature, Nature Medicine, and Cell. The company is leveraging these capabilities to build a broad pipeline of RNAi therapeutics for the treatment of a wide range of disease areas, including respiratory syncytial virus (RSV), liver cancers, TTR-mediated amyloidosis (ATTR), hypercholesterolemia, and Huntington's disease. In addition, Alnylam formed Alnylam Biotherapeutics, a division of the company focused on the development of RNAi technologies for application in manufacturing processes for biotherapeutic products, including recombinant proteins and monoclonal antibodies. The company's leadership position in fundamental patents, technology, and know-how relating to RNAi has enabled it to form major alliances with leading companies including Medtronic, Novartis, Biogen Idec, Roche, Takeda, Kyowa Hakko Kirin, and Cubist. Alnylam and Isis are joint owners of Regulus Therapeutics Inc., a company focused on the discovery, development, and commercialization of microRNA therapeutics. Founded in 2002, Alnylam maintains headquarters in Cambridge, Massachusetts. For more information, please visit www.alnylam.com.
Alnylam Forward-Looking Statement
Various statements in this release concerning Alnylam's future expectations, plans and prospects, including without limitation: statements regarding the completion of Alnylam's collaboration with Novartis and potential future milestone and royalty payments to Alnylam in connection with its development of RNAi therapeutics; Alnylam's planned corporate restructuring, including the timing and effect of the restructuring on Alnylam's future operating expenses and cash position, and the timing and amount of one-time charges related to the personnel reductions expected to be incurred; its cash position at the end of 2010; and its plans for the continued research and development of RNAi therapeutics; constitute forward-looking statements for the purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including risks related to: Alnylam's ability to manage operating expenses; Alnylam's approach to discover and develop novel drugs, which is unproven and may never lead to marketable products; the pre-clinical and clinical results for its product candidates, which may not support further development of product candidates; obtaining, maintaining and protecting intellectual property; Alnylam's ability to enforce its patents against infringers and to defend its patent portfolio against challenges from third parties; Alnylam's ability to obtain additional funding to support its business activities, including through the establishment of new alliances; Alnylam's dependence on third parties for development, manufacture, marketing, sales and distribution of products; obtaining regulatory approval for the clinical development and commercialization of products; competition from others using technology similar to Alnylam's and others developing products for similar uses; Alnylam's dependence on current and future collaborators; unexpected expenditures; and Alnylam's short operating history; as well as those risks more fully discussed in the "Risk Factors" section of its most recent quarterly report on Form 10-Q on file with the Securities and Exchange Commission. In addition, any forward-looking statements represent Alnylam's views only as of today and should not be relied upon as representing its views as of any subsequent date. Alnylam does not assume any obligation to update any forward-looking statements.
SOURCE: Alnylam Pharmaceuticals, Inc.
Alnylam Pharmaceuticals, Inc.