Blackstone Pays Alnylam $1B to Grab a Stake in RNAi Drug Inclisiran
Seven years ago Alnylam Pharmaceuticals sold rights to one of its preclinical drugs, gaining upfront cash and $180 million in potential milestone payments, plus royalties, for a therapy taking a novel approach to lowering cholesterol. On Monday, the company announced the sale of half of the royalties it’s owed to private equity firm Blackstone for $1 billion—all for a drug that is not yet approved.
The deal provides Alynlam (NASDAQ: ALNY) with immediate cash to fund commercialization of its FDA-approved therapies based on the same technology. The Cambridge, MA-based biotech is also in line to gain up to $1 billion more, a combination of debt and equity, from its new financial partner. Some of that cash will support two cardiometabolic programs currently in clinical development.
The drug at the heart of the deal, inclisiran, is based on RNA interference (RNAi). The technology aims to block messenger RNA, the molecules that carry protein-making instructions. By interfering with these molecular messengers, an RNAi drug stops a gene from producing a disease-causing protein. The approach is sometimes referred to as “gene silencing.”
When Alnylam sold its inclisiran rights to The Medicines Company for $25 million up front in 2013, RNAi was still an unproven technology. Alnylam has since gone on to win two FDA approvals for two RNAi drugs. Patisiran (Onpattro) became the first ever FDA-approved RNAi therapy in 2018. The drug treats nerve damage caused by hereditary transthyretin amyloidosis, a rare and potentially deadly disease. Last November, the FDA OK’d givosiran (Givlaari), an RNAi therapy that Alnylam developed to treat acute hepatic porphyria, a rare metabolic disease that leads to the buildup of toxic enzymes. Alnylam is also seeking FDA approval for lumasiran, a drug that treats another rare metabolic disease, primary hyperoxaluria type 1.
Inclisiran’s progress under The Medicines Company positions Alnylam, and now Blackstone, to get a piece of the much larger cardiovascular disease market. The drug is intended to block the production of PCSK9, a protein that impedes the body’s ability to rid itself of the so-called “bad” form of cholesterol. PCSK9-inhibitors have already reached the market from partners Sanofi (NYSE: SNY) and Regeneron (NASDAQ: REGN), as well as Amgen (NASDAQ: AMGN). These drugs are antibodies given by injection every four to six weeks. The antibodies are designed to bind to excess PCSK9 so it can be cleared from the body.
By using RNAi, inclisiran offers a different approach to targeting PCSK9, as well as a dosing advantage: it’s a twice-a-year injection. Novartis (NYSE: NVS) was attracted to the drug’s potential and agreed to pay $9.7 billion last November to acquire The Medicines Company. The drug was submitted to US and European regulators for review in December; regulatory decisions could come later this year.
Speaking on a conference call Monday, Alnylam CEO John Maraganore said that Alnylam began exploring potential inclisiran royalty deals at the end of 2019. It was a competitive process that led to negotiations with “several different parties” through early March, he said.
The deal with Blackstone allows Alnylam to receive benefits from commercialized inclisiran, while also providing the company with cash right away to support ongoing research, Maraganore said. In addition to acquiring half of the rights to inclisiran milestone and royalty payments, Blackstone is also making an investment in Alynlam’s potential to develop more RNAi drugs. The deal calls for Blackstone to lend $750 million to its partner, as well as provide up to $150 million to support two clinical-stage cardiometabolic programs, vutrisiran and ALN-AGT. The final financial component of the deal is a $100 million purchase of Alnylam shares priced at $103.79. The biotech’s shares closed Friday at $116.38 apiece.
When the deal was sealed Friday, Alnylam received $500 million for the initial payment for the royalty, according to Jeff Poulton, chief financial officer. The company is due to receive the second $$500 million payment next year. Alnylam has also received Blackstone’s $150 million payment for an equity stake in the company.
As Alnylam makes its transition into a commercial-stage company, Poulton said one of its goals is to become “self sustainable.” The company finished 2019 with more than $1.5 billion in cash—not enough to achieve that goal without turning to stock offerings. With the Blackstone deal, Poulton said “we believe we can achieve self-sustainability without any need to access the equity markets in the near future.”