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Regeneron, Alnylam Extend Collaboration for RNAi Therapeutics

Zacks Equity Research

Regeneron Pharmaceuticals, Inc. REGN announced that it has extended its collaboration agreement with Alnylam Pharmaceuticals, Inc. ALNY.

Key Aspects of the Collaboration

Both the companies will work together to discover, develop and commercialize new RNA interference (RNAi) therapeutics for a broad range of diseases by addressing disease targets expressed in the eye and central nervous system (CNS), in addition to a select number of targets expressed in the liver.

The companies plan to advance programs directed to 30 targets. Other candidates also might be introduced into clinical development during the initial five-year discovery period, which includes an option to extend.

Regeneron will lead development and commercialization for all programs targeting eye diseases, while Alnylam will be entitled to potential milestone and royalty payments.

Both the companies will work together and take turns for CNS programs. The lead party will retain its global development and commercial responsibilities.

Regeneron and Alnylam will also select a number of RNAi therapeutic programs, which target genes expressed in the liver and can influence a wide variety of diseases affecting different body parts. Both the companies will evaluate anti-C5 antibody-siRNA combinations for C5 complement-mediated diseases. These include evaluating Regeneron's pozelimab (REGN3918), currently in phase I development, with Alnylam's cemdisiran, currently in phase II development. Per the terms, Alnylam will retain control of cemdisiran monotherapy development, while Regeneron will lead the development of the combination. Both the companies will equally share investment and potential future profits on the monotherapy program and Alnylam will receive royalties on any potential combination product sales. Regeneron and Alnylam will alternate leadership and participate equally in potential profits for all other alliance liver programs.

We remind investors that both the companies collaborated to identify RNAi therapeutics for the chronic liver disease, nonalcoholic steatohepatitis (NASH), and potentially other related diseases in 2018. Both the companies will continue to work on the same as part of this expanded collaboration.

Financial Terms of the Transaction

Regeneron will make a $400-million upfront payment to Alnylam. The former will also purchase $400 million of Alnylam equity at $90.00 per share (4.44 million common shares), based on the volume-weighted average price over the last fifteen-trading-day period.

Additionally, Alnylam is eligible to receive up to an additional $200 million in milestone payments.

Regeneron will provide Alnylam with $2.5 million in funding at the initiation of any program and an additional $2.5 million for identifying the lead candidate. Alnylam will also get an additional $30 million in annual discovery funding.

Our Take

The collaboration with Alnylam will give Regeneron an option to have a pipeline based on RNAi technology. RNAi is a naturally occurring biological pathway within cells for sequence-specific silencing and regulation of gene expression. The technology promises potential.

The FDA approved the first ever RNAi therapeutic, Alnylam’s Onpattro, for the treatment of the polyneuropathy of hATTR amyloidosis in adults in the United States and that in adults with Stage 1 or Stage 2 polyneuropathy in the EU. The collaboration will provide Alnylam with funds and a strong partner like Regeneron.

At the same time, the collaboration extension will boost Regeneron’s pipeline, as its lead drug Eylea, which is approved for various ophthalmology indications, is likely to face competitive threats. The company also has a collaboration agreement with Bayer BAYRY for the same.

Regeneron’s stock has gained 5.1% in the past six months against the industry’s decline of 3.2%.


Concurrently, Alnylam announced that it will terminate its research agreement with Sanofi SNY. Both the companies have agreed to conclude the research and option phase of their RNAi therapeutics collaboration for rare genetic diseases. Additionally, Alnylam and Sanofi have agreed to amend certain terms of the companies’ equity agreement, with the latter obtaining a release of its lock-up of Alnylam stock holdings.

Zacks Rank

Regeneron currently carries a Zacks Rank #3 (Hold). You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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