8-KMaterial Agreements

ALNYLAM PHARMACEUTICALS, INC. 8-K Report, Material Agreement (Jul 10, 2006)

Filed July 10, 2006For Securities:ALNY

Summary

Alnylam Pharmaceuticals, Inc. has filed an 8-K report detailing significant amendments to its research collaboration and license agreement with Merck & Co., Inc. The updated agreement, effective July 3, 2006, restructures their partnership to focus on developing RNAi therapeutics for human diseases. This amendment modifies the previous agreement from September 8, 2003, by allowing Alnylam to select three of nine new target programs for joint development with Merck. In these joint programs, Merck will co-fund from the outset, and Alnylam gains the right to co-promote RNAi therapeutic products in the U.S. Furthermore, the amended agreement outlines Merck's primary responsibility for the remaining six programs, with Alnylam eligible for substantial milestone payments exceeding $120 million and royalties upon successful development and commercialization by Merck. This revised structure aims to accelerate development and enhance potential returns for Alnylam. Concurrently, the companies terminated their separate ocular disease alliance, with Alnylam retaining rights to develop ophthalmic products targeting VEGF, subject to certain obligations.

Key Highlights

  • 1Alnylam Pharmaceuticals entered into an Amended and Restated Research Collaboration and License Agreement with Merck & Co., Inc. on July 3, 2006.
  • 2The collaboration focuses on developing RNAi therapeutics for human diseases, expanding to nine new targets nominated by Merck.
  • 3Alnylam can select three of these new programs for joint development, entitling it to U.S. co-promotion rights and immediate Merck co-funding.
  • 4Merck will lead the development of the remaining six programs, with Alnylam eligible for over $120 million in milestone payments and royalties.
  • 5The agreement extends the collaboration term to five years from the original date and continues until all development and commercialization under the pact cease.
  • 6The parties also terminated their Ocular Collaboration Agreement, with Alnylam retaining rights to develop VEGF-targeted ophthalmic products.
  • 7Termination of the ocular agreement is subject to certain royalty and other obligations, and Merck has granted Alnylam a license for VEGF-targeted RNAi products.

Frequently Asked Questions

The primary change is the restructuring of the collaboration to focus on nine new target programs, with Alnylam having the option to select three for joint development. This provides Alnylam with co-funding and U.S. co-promotion rights for these selected programs, a shift from the original agreement where Merck's co-funding began after pre-clinical work.

Alnylam is eligible to receive milestone payments exceeding $120 million for three RNAi therapeutic products developed solely by Merck. Additionally, Alnylam is entitled to royalties on products developed and commercialized by Merck across the six programs where Merck takes primary responsibility.

The ocular disease alliance was terminated, effective June 29, 2004. However, Alnylam retained its rights to develop ophthalmic products targeting VEGF, and Merck granted Alnylam a license to use its technology for developing VEGF-targeted RNAi products, subject to certain royalty and other obligations.

The initial term of the collaboration is five years from the original agreement date (September 8, 2003) and will continue as long as products are being developed or commercialized under the agreement. It will ultimately remain in effect until all royalty and profit-sharing obligations are fulfilled.