Alnylam Pharmaceuticals CEO John Maraganore
A large private equity firm is pumping $2 billion into a biotechnology company to help it develop drugs that treat diseases by silencing genes.
Cambridge, Massachusetts-based Alnylam Pharmaceuticals and New York-based Blackstone said Monday they had reached a deal whereby the latter will provide the funding to support the former’s advancement of RNA-interference drugs in various disease states.
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Shares of Alnylam fell 4.5% on the Nasdaq following the news, while shares of Blackstone fell 5.8% on the New York Stock Exchange. Markets had been down generally following the announcement of an oil deal by OPEC to cut production by 9.7 million barrels per day, or 10%.
In particular, the deal involves Blackstone purchasing 50% of the royalties owed to Alnylam on sales of inclisiran, the RNAi therapy for hypercholesterolemia that it developed with The Medicines Co. – which Swiss drugmaker Novartis acquired in November for $9.7 billion – and that is currently under Food and Drug Administration review. Blackstone Life Sciences will pay $1 billion for the stake in inclisiran’s royalties, along with up to $150 million to develop its cardiometabolic product candidates, vutrisiran and ALN-AGT, and $100 million to purchase stock in the company. The remaining component of up to $750 million consists of a first lien senior secured loan led by GSO Capital Partners.
On a conference call with investors, Alnylam executives pointed to inclisiran as a key asset in the deal, which was a competitive process that the company had been negotiating since late last year.
“Clearly, inclisiran is a very attractive program, and so we assessed a number of royalty monetization and financing alternatives before proceeding with Blackstone,” COO Yvonne Greenstreet said on the call.
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The ongoing Covid-19 pandemic and how it figures into the deal and the company’s operations generally also came up during the call. CEO John Maraganore said the timing of the deal was right.
“When it’s at the beginning of a period with more uncertainty and volatility in the equity markets, this seems like a really good time to do this,” he said.
In a note to investors, Cowen analyst Ritu Baral wrote that the deal would bridge financing gaps while also coming with attractive terms.
“We view the [Alnylam]/Blackstone financing deal announced this AM as a strong driver of long-term value for [Alnylam],” she wrote. “The deal likely removes any future potential dilutive financing, a primary concern and overhang for investors, and successfully bridges the company to break-even which we model in 2023.”
Phase III data for inclisiran were reported last fall. The drug inhibits production of PCSK9, a protein involved in hypercholesterolemia that is also targeted directly by two existing drugs, Amgen’s Repatha (evolocumab) and Sanofi and Regeneron Pharmaceuticals’ Praluent (alirocumab). However, inclisiran is designed for administration only twice per year, compared with every two to four weeks for the other two drugs. Novartis, which is commercializing inclisiran, and the U.K.’s National Health Service announced a population health partnership designed to make inclisiran available to patients in the U.K. at the J.P. Morgan Healthcare Conference in January.
Photo: Lane Turner, The Boston Globe, via Getty Images
