Roche and Alnylam form RNAi therapeutics alliance

Jul 9 2007

Roche and the US-based biopharmaceutical company Alnylam Pharmaceuticals, Inc. announced today that they have entered into a major alliance in which Roche obtains a non-exclusive license to Alnylam's technology platform for developing RNAi (RNA interference) therapeutics.

The alliance will initially cover four therapeutic areas: oncology, respiratory diseases, metabolic diseases and certain liver diseases. Alnylam and Roche also will collaborate on RNAi drug discovery for one or more disease targets in these therapeutic areas. In addition, Roche will acquire Alnylam's European research site located in Kulmbach, Germany (Bavaria), subject to regulatory approval.

This site will become Roche's Center of Excellence for RNAi therapeutics discovery.

RNAi is a potential foundation for a whole new class of human therapeutic products. RNAi is a natural mechanism that the body uses to inhibit expression of certain genes. Harnessing the activity of RNAi creates a direct opportunity to develop specific and potent drugs against diseases that are difficult to treat.

"Alnylam has made significant advances in RNAi therapeutics, one of the most promising approaches to tomorrow's healthcare technology. Working together with Alnylam provides us with new capabilities to target complex diseases within our focus areas," said Lee E. Babiss, Head of Roche Global Pharma Research. "Our mission is to find novel solutions for patients who suffer from difficult to treat diseases and we will be fully committed to this goal, together with our new colleagues located at the acquired site in Kulmbach."

"We are pleased to form this new alliance with Roche, which is widely recognized for its commitment to innovation in biotechnology. We look forward to working together to advance our transformative technology into a whole new class of drugs," said John Maraganore, Ph.D., President and Chief Executive Officer of Alnylam. "Such significant support from Roche will also strengthen Alnylam's efforts to build a leading innovation-based biopharmaceutical company. Indeed, together with our demonstrated commitment to scientific excellence, advancement of our pipeline and unparalleled intellectual property estate, we believe that this new alliance greatly extends our leadership position in the discovery and development of RNAi therapeutics."

Alnylam has granted to Roche a non-exclusive license providing Roche access to broad Alnylam intellectual property (IP) and know-how, including fundamental, chemistry and delivery IP. Indications will initially include oncology, respiratory disease, metabolic disease and certain liver diseases. Alnylam maintains the right to non-exclusively license its IP to additional partners in potential future agreements. In addition, Alnylam and Roche will collaborate on one or more disease targets to be identified in the future in exchange for milestone and royalty payments.

The transaction includes Roche's acquisition of Alnylam's European research site in Kulmbach, Germany (Bavaria), with about 40 employees. The team in Kulmbach will remain dedicated to RNAi therapeutics discovery as a new Center of Excellence for RNAi therapeutics within Roche's global research organization.

The alliance could be valued at over 1 billion US dollars in consideration of upfront payments, potential product milestone payments for multiple products and field expansion payments, excluding potential royalties on future sales of commercial products. Under the terms of the agreement, Roche will pay Alnylam 331 million US dollars in upfront cash payments and equity investment, including 1.975 million shares of Alnylam common stock the Roche Venture Fund agreed to purchase at 21.50 US dollars per share, representing just less than five percent of Alnylam's outstanding common stock. Roche will also pay Alnylam milestones on products as they advance in development and commercialization as well as royalties on future sales of commercial products. Further, Roche may pay Alnylam field expansion payments to increase the number of therapeutic areas.

The close of the agreements, including Roche's purchase of Alnylam shares and purchase of Alnylam's site in Germany, is subject to certain regulatory approvals and is expected to occur within approximately 30 days.

http://www.roche.com/ and http://www.alnylam.com/