Novartis notified Alnylam Pharmaceuticals that it has formally selected a final list of 31 targets for which they have exclusive rights to discover, develop, and commercialize RNAi therapeutics using Alnylam intellectual property and technology. Novartis also decided to not exercise its option to execute an adoption license per the original 2005 agreement for nonexclusive access to Alnylam fundamental and chemistry intellectual property.
Additionally, Alnylam decided to effect a corporate restructuring with an approximately 25% to 30% reduction in overall workforce, as a result of completing the fifth and final planned year of the Novartis alliance. Alnylam expects that this reduction in personnel costs along with other external costs will result in a savings of approximately $25 million in 2011 cash operating expenses. In addition there will be one-time charges related to the personnel reductions of approximately $3 million, the majority of which will be incurred in the third quarter.
“Over the last five years Novartis has been an important collaborator, and we look forward to their continued efforts in advancing a robust pipeline of RNAi therapeutics toward over 30 disease targets, now fully selected, through their access to Alnylam intellectual property and technology,” notes John Maraganore, Ph.D., CEO of Alnylam. “We stand to benefit greatly in their continued success.
“At the same time, we also welcome this new period in Alnylam’s development with both reduced need for allocation of service-based collaboration resources and substantially greater freedom in forging new major partnerships.” The company is reaffirming its financial guidance of ending 2010 with greater than $325 million in cash.
Alnylam is co-developing its Phase III respiratory syncytial virus candidate with Kyowa Hakko Kirin in Asia and Cubist Pharmaceuticals in the rest of the world. Additionally, it’s preclinical-stage Huntington disease program is being developed along with Medtronic.
Alnylam’s RNAi therapeutics partnership with Novartis was formed in 2005 and was structured as a three-year collaboration, with Novartis having the right to extend the agreement for an additional fourth and fifth year; Novartis elected to continue for both a fourth and fifth year. In return for any RNAi therapeutic products Novartis develops against these targets, Alnylam is entitled to receive milestone payments upon achievement of certain specified development and annual net sales events.