Shedding Baggage, Alnylam Turns a Corner


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to go under, over, or around and get their molecules to their (intracellular) targets. For the company’s lead program in TTR (transthyretin) amyloidosis, an orphan disease that nonetheless affects 50,000 patients worldwide, some of them severely, the molecules are definitely getting there, resulting in impressive Phase 1 data.

Modern RNAi delivery has moved well beyond the cationic lipid technology that was the subject of the Tekmira lawsuit. Alnylam and its fellow RNAi companies are applying no fewer than three promising delivery approaches, each of which is likely to find its niche. Alnylam is working on a proprietary, subcutaneous form of previously known delivery molecules known as GalNAcs (more here) that deliver siRNAs via receptors found on liver cells; Arrowhead Research (NASDAQ: ARWR) has developed DPC (Dynamic PolyConjugate) technology; and privately held Dicerna Pharmaceuticals has created a proprietary cationic lipid delivery system of particular use in oncology indications.

The same industry observer said: “Has the delivery issue been solved? Not really. Instead they’ve adapted their therapeutic focus to where they CAN deliver,” e.g. to the liver.

No way to build a pipeline.

Aware that it’s not a platform unless it has multiple applications, Alnylam’s management has been diligent in expanding the list of preclinical and early clinical programs. One advantage of the company’s cash hoard has been its ability to seek out indications likely to be amenable to the RNAi approach. Genetic disorders that manifest in the liver are an ideal category.

Alnylam has been just about pitch-perfect in the story it started to tell investors in January, 2011. It’s not just about one program headed for the clinic, they said. It’s about five programs, each able to deliver meaningful efficacy data by 2015. Alnylam called this approach “5 X 15.” Alnylam has successfully transitioned from an IP story (2003: we have all the key IP we need) to a partnering story (2008: “RNAi 2010” projecting four programs in clinical development and four additional partnerships) to a bona fide product development story (5 X 15) funded by financial investors.

The value of a platform increases exponentially once it has been shown to work in the first indication. That points to an important value inflection point if the Phase 2 data in TTR, due by mid-2013, are good.

Pharma has abandoned RNA interference.

RNAi-based drug developers were hit with a wave of bad news in 2010 when Alnylam’s partners, first Novartis and then Roche reduced their commitment to RNA interference or eliminated it entirely. This indeed caused a bump in the road for Alnylam. The stock price fell, staff members were let go. At that time, things looked bleak indeed for RNA interference.*

But one could argue that the loss of partners such as Roche who apparently no longer believed in the platform was a blessing in disguise. Unencumbered, Alnylam’s products are worth more to its shareholders. The whole company is more valuable based on its ownership of most of its pipeline.

Furthermore, there is no evidence that pharma is the right partner for an early-clinical-stage orphan-disease-focused drug developer, which is largely what Alnylam has become. Indeed, in any potential acquisition scenario except Sanofi or BioMarin, Alnylam would likely be the orphan-drug teacher and the pharma acquirer the pupil.

Biotech is already moving in to fill the vacuum left by pharma. On Feb. 4, Alnylam announced that it had struck a partnership, complete with $25 million upfront, with its former Cambridge neighbor The Medicines Company (MDCO) for its cholesterol-fighting program targeting PCSK-9, a gene expressed (where else?) in the liver.

Meantime, in October, 2012, Alnylam added credibility when it signed up a new pharma partner in Genzyme, now a unit of Sanofi, for Asian rights to its TTR programs, with Alnylam holding onto both U.S. and European rights. This leaves the company maximally flexible in terms of potential acquisition (no encumbrance) or further growth.

Money is great but money alone does not buy clinical data.

This one is true but I contend it is irrelevant, even indicative of jealousy. John Maraganore and the Alnylam team have formed partnerships with pharma without giving away their technology. In lucrative deals with Roche ($331 million in cash to Alnylam) and Takeda ($175 million), they mastered the type of non-exclusive technology partnerships that trace their roots back to Maraganore’s previous company, Millennium Pharmaceuticals. More recently, in early 2013, they went back to investors with their first stock offering since their 2004 IPO and sold them on the likely success of RNA interference and the desirability of investing in the market leader.

Alnylam is not the only RNAi company trading on the NASDAQ. Arrowhead, Tekmira and others do, and Silence Therapeutics is traded on the London Stock Exchange (LSE: SLN). But Alnylam’s funding has dwarfed that of all the other companies put together and the company continues to raise money with ease. That cash has fueled the path into Phase 2. That is not something to criticize. It is something to admire.

Alnylam has shed its baggage and moved beyond being a technology story into a clinically focused stage in which the risk profile is clearer. Extraneous factors no longer cloud investors’ judgment. Now, finally, it is all about the upcoming clinical data. RNAi-based medicines will work or they won’t. Judging by the recent rise in both the stock price and the company’s cash position, the market is betting that at least some of them will.

*Contrary to popular belief, Novartis did not pull out of RNA interference R&D. In fact, they continued to pursue targets of their own as well as targets that Alnylam had identified in their collaboration. What they declined to do was to extend for a third time an agreement that they had already extended twice. Not exactly abandonment.

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Steve Dickman is a former venture capitalist and the CEO of boutique consulting firm CBT Advisors as well as the author of the blog Boston Biotech Watch. Follow @

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One response to “Shedding Baggage, Alnylam Turns a Corner”

  1. Andrew G. says:

    ALNY has come a long way since the “dark days” but you are just too generous. First, to say 5×15 has succeeded is laughable, the original definition of 5 programs in late-stage trials by 2015 is hopelessly out of reach. Second, how about we see a shred of long-term data with their current generation products (heck, I’ll settle for TWO doses…). Third, the MDCO deal was just so-so. ALNY got $25m to spend on two years of preclinical/phase 1 development for the SC version. The lead IV version will never see the light of day and it all adds up to virtually no true “upfront” payment. I do applaud the rare disease focus – if ISIS had pivoted in this direction years earlier, it would be a very different company today.