Alnylam CEO John Maraganore On Corporate Near-Termism, and Restoring Faith in RNAi

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the release went out, at close of business. What was explained to us was that they had to make big cuts. We knew that, it had been known for some time. They needed to preserve their investment in their clinical pipeline, and they have near-term issues with revenues. They also, for social/cultural reasons, chose not to do very much [cutting] in San Francisco. So what really got hit were the discovery elements in traditional Roche pharma, and among those cuts there were two locations—-one in Kulmback, Germany, and the other in Madison, WI—that happened to be the centers of excellence for their RNAi research. That’s what happened here.

It’s disappointing that this type of thing happens within large companies. It does make you wonder how best companies can ensure they can support innovation going forward. I’m increasingly of the view that strategies of externalizing innovation is the only path forward. Roche has been one of the leaders in internalizing their innovation. That’s what they did with Alnylam back in 2007. That’s what they did with Genentech in 2009. I don’t know if their experiment is working out very well so far.

X: My sense of the investor sentiment around your company the past couple years has essentially been, ‘Gee, you must have something pretty valuable there in RNAi because you have all these big name Big Pharma companies lining up and shelling out a lot of money to partner with you.’ So then this fall, Novartis says it will terminate their deal, and then so does Roche. And Roche is the biggest one you’ve done. Why should people not be alarmed?

JM: Let me first correct you. Novartis didn’t terminate our deal. Novartis and Alnylam were partners going back to 2005. In 2008, Novartis, on their own volition, extended the partnership an additional year. Then in 2009, they extended it for a fifth year. The agreement was capped at five years. That deal ended in a natural process. And, remember, they chose to move ahead with 31 programs on their own using Alnylam RNAi technology and IP. That’s 31. Not one, not two, not three, but 31. What they chose not to do was they had an option for a broader license for a one-time $100 million payment. They chose not to do that, because they rationalized—completely legitimately—that they will be really busy working on 31 programs. That’s the decision they made.

X: OK, and I understand that your 2010 financial forecast was never set up to count on receiving the $100 million payment from Novartis. But what about Roche? That one really surprised people.

JM: Roche made a decision to be focused on near-termism. They are walking away from an incredibly important field that we think in the future they will regret. But it’s something they’re choosing to do now because they have to make cuts, and they have to make cuts, and they have to make cuts. And in our business, innovation is often what gets cut. That’s what happened here.

X: What kind of impact does this have on Alnylam operationally? What did you have to say to the employees?

JM: I told them it was unfortunate [Roche] chose to do this, but there’s no economic impact on Alnylam whatsoever. We received no money from Roche … Next Page »

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2 responses to “Alnylam CEO John Maraganore On Corporate Near-Termism, and Restoring Faith in RNAi”

  1. Geek says:

    RNAi stock have been sold down mercilessly since the decision by Roche. Alnylam may be a bargain but look at Australia’s Benitec BLT (ASX). It has very valuable IP, possibly more so than Alnylam, and is trading at a market cap of $AUD12 million. These stocks are being manipulated so that big pharma can take them over for a pittance, and nothing is ever done to stop them. People are leaving in droves because they can’t compete with the big boys who have enough money and time to drive the prices down to such ridiculous levels that the small players just give up. It’s a joke.

  2. Wes says:

    History about to repeat itself? When Benitec/CSIRO first got the Graham patent allowed (but not formally awarded) the sp went from 2c to 30c, and sat there for about 6 months. Then the offical certificate came out and it went to $1.30. Months later Nucleonics successfully got a re-exam started, which undermined the sp for the next 6 years down to it’s current 2.5c.

    Have a look at the 10 year chart for BLT at and compare against dates of BLT news releases at

    Benitec need to work clear of some dilutionary funding before sp can move, but once they achieve this traction will likely return