Alnylam's Partnership With Regeneron Is More Than Meets The Eye

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About: Alnylam Pharmaceuticals, Inc. (ALNY), Includes: REGN
by: Terry Chrisomalis
Summary

Alnylam formed another partnership with Regeneron to target eye and central nervous system disorders, with another focus including the target of C5 complement-mediated diseases.

A prior partnership between Alnylam and Regeneron focusing on a NASH product is ongoing and has made substantial progress on a target gene splice variant using the Regeneron Genetics Center.

Alnylam also benefits from Regeneron's VelociGene technology because of its ability to accelerate clinical development.

The NASH market is expected to be between a $20 billion and $35 billion market opportunity in the coming years.

Alnylam (ALNY) was able to land a broad partnership deal with Regeneron Pharmaceuticals (REGN). This deal was established to partner on developing many products for the eye and central nervous system (CNS) disorder indications. There are even additional collaborations expected for RNAi therapeutics targeting liver diseases. There is even an ability to also go after C5 complement-mediated diseases as well. This is an all-around solid partnership and each company brings something major to the table.

Major Deal Established

This partnership is highly ideal for both companies. That's because each one gets what they want out of it. For instance, the deal established is worth $1 billion. This is broken down into several parts. The first part includes an upfront amount of $800 million. That is Regeneron giving a $400 million upfront cash payment to Alnylam and then a $400 million equity investment into its stock. Alnylam provides the expertise in RNA interference (RNAi) drug development. That's because Alnylam has an extensive pipeline of RNAi products that are quickly getting through the clinic at a rapid pace. Matter of fact, it had received its first FDA approval for its RNAi therapeutic ONPATTRO (patisiran) to treat patients with polyneuropathy of hereditary transthyretin-mediated (hATTR) amyloidosis in adults. Regeneron has provided Alnylam with a lot of cash as part of the partnership. However, there are two other items that Regeneron brings to the table for this partnership besides cash. These two items are known as VelociSuite and Regeneron Genetics Center (RGC). VelociSuite is used by Regeneron to speed up the clinical development process. It accomplishes this by enhancing several steps in preclinical studies and through the clinic. The goal is to reduce costs, while getting a product through clinical trials at a quicker rate. The RGC is a large genetic database that has about 400,000 exomes sequenced to date. An exome is the protein-coding region of a gene in a genome. It is used to look for genetic factors that cause a host of diseases. This is important, because it can generate new validated targets to go after for clinical development.

Enhanced Pipeline

The partnership is not only looking at developing treatments for the eye and CNS indications. There is also a plan in place to develop anti-C5 antibody-siRNA that will be used to go after C5 complement-mediated diseases. A major player in this space, which has already received approval for several clinical products, is Alexion Pharmaceuticals (ALXN). Alexion's drug Soliris has obtained approval for multiple C5 complement diseases, including Paroxysmal Nocturnal Hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS). Alnylam has a phase 2 study that is using its drug Cemdisiran to treat patients with aHUS. Regeneron has its own ongoing study with its monoclonal antibody pozelimab for PNH. The individual studies will continue, but both companies believe that they may be able to provide superior results in C5 disorders by combining both Cemdisiran and pozelimab. Such combination studies might be able to bring an edge over Alexion's Soliris. It won't be easy for them to do so though. That's because Alexion has already received FDA approval for its next generation anti-C5 product known as Ultomiris. Plus there are many other companies that are starting to develop treatments for C5 complemented diseases and they also pose a risk to Alnylam and Regeneron. Such other biotechs developing treatments for this space include: Ra Pharmaceuticals (RARX), Apellis Pharmaceuticals (APLS), and Achillion Pharmaceuticals (ACHN). A prior partnership between Alnylam and Regeneron was established for NASH. This is a large market opportunity for both companies. Collaboration on this front will allow them to go after the NASH market which is forecast to be worth $20 billion to $35 billion.

Conclusion

This was a very good deal for Alnylam, because it gets a lot of upfront cash to fund the rest of its pipeline. Not to mention also that it gets to collaborate with Regeneron on several indications like NASH, eye diseases and central nervous system disorders. Regeneron has made some significant progress with its RGC and VelociSuite products. There is no doubt that when Alnylam's RNAi therapeutics are put to use with Regeneron's tech, that they both can achieve some substantial clinical outcomes. The biggest risk is that a lot of these partnered indications are still in the early stage of clinical testing. There is no guarantee that they will achieve the desired results in the intended targets. Especially, when you consider that remarkable results in animals don't always translate well into human clinical studies. The second risk involves a lot of competition. I noted the competition in the C5 mediated space, where Alexion Pharmaceuticals has been a major leader for that space for a very long time now. On top of that, the NASH market is very crowded with multiple products being developed. It's hard to say for sure, but there are too many biotechs in development for NASH. The biggest players would be Intercept Pharmaceuticals (ICPT) and Genfit (OTCPK:GNFTF) for the time being. Alnylam will have its hands full with these indications, but its RNAi candidates have proven to work in rare diseases. That's why I believe Alnylam has solid footing moving forward with this partnership.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.