8-KMaterial AgreementsSecurities & Listing

ALNYLAM PHARMACEUTICALS, INC. 8-K Report, Material Agreement (Jun 16, 2005)

Filed June 16, 2005For Securities:ALNY

Summary

This 8-K filing from Alnylam Pharmaceuticals, Inc. (ALNY) on June 16, 2005, details an amendment to material definitive agreements with Garching Innovation GmbH (Garching), specifically the "Requirement Amendment." This amendment modifies Alnylam's prior obligations regarding its German subsidiary, Alnylam Europe. Instead of building comparable development and commercial capabilities in Germany to its U.S. operations, Alnylam is now obligated to maintain Alnylam Europe as an operating company with a specified number of full-time equivalent employees (25) based in Germany until December 20, 2007, including a requirement for a certain number of doctoral-level and diploma scientists. Garching has waived past defaults related to these comparability requirements and established procedures for future compliance monitoring and potential termination if obligations are not met. Furthermore, the filing discloses an unregistered sale of equity securities. In consideration for Garching's agreements in the Requirement Amendment, Alnylam will issue up to 270,000 shares of common stock to Max Planck Gesellschaft zur Foerderung der Wissenschaften e.V. (Max Planck), and potentially to the Massachusetts Institute of Technology (MIT) and/or the Whitehead Institute (WI) by July 15, 2005. These issuances will be made under exemptions from registration requirements, either under Regulation S for Max Planck (assuming it's not a U.S. person) or under Section 4(2) and/or Regulation D for MIT and WI (assuming they are accredited investors). This move appears to be a consideration for the amended licensing terms and potentially for research collaborations or prior agreements with these institutions.

Key Highlights

  • 1Alnylam Pharmaceuticals amended its license agreements with Garching Innovation GmbH, modifying operational requirements for its German subsidiary, Alnylam Europe.
  • 2The "Requirement Amendment" shifts focus from building comparable U.S.-level capabilities to maintaining a specific operational footprint in Germany (25 FTEs, including scientists) until December 20, 2007.
  • 3Garching Innovation GmbH has waived any past defaults related to the original "comparability requirement" and established a process for future compliance monitoring.
  • 4Alnylam will issue up to 270,000 shares of common stock to Max Planck, and potentially MIT and/or Whitehead Institute, by July 15, 2005.
  • 5These shares will be issued under exemptions from registration, relying on Regulation S for Max Planck and Section 4(2)/Regulation D for MIT/Whitehead.
  • 6The share issuance serves as consideration for the concessions and amendments made by Garching.
  • 7The agreement addresses and waives claims related to prior disputes over the division of indications and sub-indications between Alnylam US and Alnylam Europe.

Frequently Asked Questions

The "Requirement Amendment" modifies Alnylam's prior obligations under its license agreements with Garching Innovation GmbH. It changes the requirement for Alnylam to build development and commercial capabilities in Germany comparable to its U.S. operations. Instead, Alnylam must maintain a specified operational presence in Germany with a certain number of employees until December 20, 2007.

Alnylam is issuing these shares as consideration to Garching Innovation GmbH for agreeing to the "Requirement Amendment." The shares will be issued to Max Planck, and potentially MIT and/or the Whitehead Institute, by July 15, 2005, as directed by Garching.

No, these shares are being issued through unregistered sales. They will be issued in reliance on exemptions from the registration provisions of the Securities Act of 1933. Max Planck's shares will likely be under Regulation S (for sales outside the U.S.), while MIT and/or Whitehead Institute's shares will likely be under Section 4(2) and/or Regulation D (for private placements to accredited investors).

The amendment waives Garching's rights to terminate the license agreements based on past asserted defaults related to the original "comparability requirement" and the mutual agreement on splitting indications. It also establishes procedures for monitoring future compliance with the new operational requirements for Alnylam Europe.