Isis, Alnylam to Collaborate on Single-Stranded RNA Drugs; Deal Could Add Up to $31 Million to Isis’ Coffers

Xconomy San Diego — 

Biotech stalwarts in two of Xconomy’s home regions, Isis Pharmaceuticals (NASDAQ: ISIS) of Carlsbad, CA, and Alnylam Pharmaceuticals (NASDAQ: ALNY) of Cambridge, MA, said today that they’ve agreed to share techniques devised by Isis for using single-stranded RNA interference (ssRNAi) to silence genes in the body that cause disease.

Under the agreement, Alnylam will owe up to $31 million to Isis in the form of upfront payments, milestone-based payments, and royalties on any drugs that may be developed using the technology. That’s relative pocket change for Alnylam, which has a comfortable $500 million in the bank.

Isis concentrates on developing drugs that make use of “antisense” molecules that lock onto messenger RNA and destroy it before it can be translated into proteins. Alnylam, meanwhile, is a leader in research on therapeutic applications of RNA interference (RNAi), in which small pieces of RNA interrupt other parts of the protein manufacturing process. The two companies have a long relationship—in 2007, for example, they pooled their intellectual property in an area called microRNAs to form Carlsbad, CA-based Regulus Therapeutics.

Most RNAi research to date has focused on using double-stranded molecules to turn off specific genes, and Alnylam has amassed a strong patent portfolio in this area. But some researchers believe that single-stranded RNAi molecules may be easier to administer as drugs than double-stranded molecules. Isis discovered ways to design chemically modified, single-stranded, RNA-like molecules as part of its antisense research—but Alnylam, with its expertise in RNAi therapeutics, is in a better position to develop and test RNAi drugs based on the insights.

In today’s announcement of the deal, Stanley Crooke, chairman and CEO of Isis, called Alnylam “the perfect partner” to help broaden applications of ssRNAi technology. “We are confident that working together in RNAi gives ssRNAi technology the best chance for success,” Crooke said.

John Maraganore, CEO of Alnylam, said in the announcement that his company would continue to focus primarily on double-stranded RNAs, but that the collaboration with Isis on single-stranded RNA-based drugs will “strengthen [Alnylam’s] overall efforts.”

“We’ve recognized since Alnylam’s beginning that Isis is the leader in all aspects of antisense technology,” Maraganore said. “We’ve had a mutually beneficial collaboration based on their innovation and patents in the field of double-stranded RNAi drugs, and we’ve been impressed with their continued expansion of this innovation to single-strand RNAi approaches.”

The agreement would seem to be a sweet deal for Isis. All of the funding for the joint ssRNAi research—up to $3 million per year, according to the companies—will come out of Alnylam’s pocket. Alnylam will also pay Isis $11 million upon the signing of the deal and an additional $10 million within 18 months—or even sooner, if Alnylam can demonstrate that the molecules interrupt the production of proteins in rodents.

Another $5 million payment will be triggered if Alnylam can achieve efficacy in primates, along with a final $5 million if an ssRNAi drug makes it to human clinical trials. And if Alnylam licenses drugs based on the technology to other companies, Isis will get 50 percent of the license payments.