Alnylam settled nearly two years of lawsuits over lipid nanoparticle (LNP) technology for RNAi therapeutics by agreeing to pay Tekmira at least $65 million, and possibly $10 million more—thus resolving all ongoing litigation between the companies.

Alnylam will pay $30 million to Tekmira to secure rights to manufacture its own LNP-based products in the future, either on its own or through a third party. Alnylam said in a statement it will use that capability to advance its ALN-TTR02 drug candidate—which targets the transthyretin (TTR) gene to treat TTR-mediated amyloidosis (ATTR) into Phase III clinical trials that the company expects will start by the end of 2013.

ALN-TTR02 is the subject of a Phase II clinical trial in Europe, with more locations to be added, evaluating safety, tolerability, and potential clinical activity of multiple once-monthly doses of the drug in ATTR patients.

In addition, Tekmira will receive $35 million to buy down its milestone and royalty payments owed by Alnylam for ALN-TTR02 and two of its other drug candidates: ALN-VSP for liver cancers and potentially other solid tumors with liver involvement, and ALN-PCS for high levels of cholesterol in the blood. Tekmira is also eligible for up to $10 million in milestone payments tied to advancement of ALN-VSP and ALN-TTR02.

The two companies also agreed to resolve Alnlyam’s interference lawsuit against Tekmira for use of Alnylam’s U.S. Patent No. 7,718,629 directed to a siRNA component in ALN-VSP. In return, Tekmira and a company formed in 2009 by both parties in the suits, AlCana Technologies, will drop claims and counterclaims in lawsuits filed in Massachusetts and British Columbia. Alnylam and Tekmira also agreed to submit future disputes over the next three years to binding arbitration, as well as not to sue each other in the future on matters related to the just-settled litigation, or else be liable for damages.

Alnylam said it will take a $65 million charge against fourth-quarter operating expenses to reflect the settlement and resulting restructuring of licensing agreements with Tekmira. In revised guidance to investors, Alnylam said it will finish this year with more than $215 million cash.

“The companies have created clarity around the overall patent estate for LNP-based products, while ensuring Alnylam’s full access to use this technology for our products in the future,” Barry Greene, Alnylam’s president and COO, said in a statement.

Said Mark J. Murray, Ph.D., Tekmira’s President and CEO, in a separate statement: “With our cash runway now extending into 2015, we are excited about our plans to aggressively advance multiple products into human clinical trials.”

In the Tekmira statement, issued with the company’s third-quarter 2012 results, Dr. Murray noted that Tekmira expects its lead oncology drug TKM-PLK1 will enter a Phase II trial next year, in 2013, and that it can advance its TKM-Ebola vaccine in collaboration with the U.S. Department of Defense’s Transformational Medical Technologies program, through which Tekmira won a $120 million commitment earlier this year to develop an RNAi drug using its LNP technology.

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