8-KMaterial Agreements

ALNYLAM PHARMACEUTICALS, INC. 8-K Report, Material Agreement (Jul 17, 2009)

Filed July 17, 2009For Securities:ALNY

Summary

Alnylam Pharmaceuticals, Inc. (ALNY) has filed a Form 8-K on July 17, 2009, to report an extension to its material definitive agreement with Novartis Institutes for BioMedical Research, Inc. The agreement, originally dated October 12, 2005, was extended by Novartis for an additional year, now running through October 12, 2010. This extension primarily impacts the research term of the collaboration focused on discovering and developing RNA interference (RNAi) therapeutics. This development is significant as it demonstrates Novartis' continued commitment to the collaboration and Alnylam's RNAi technology. While the extension does not alter the existing financial terms, it prolongs the period during which Novartis can potentially exercise its Integration Option and provides Alnylam with continued research funding, milestone payments, and royalties on any future successful products derived from the partnership. Investors should note Alnylam's retained rights to develop RNAi therapeutics for targets not selected by Novartis, subject to Novartis' right of first offer.

Key Highlights

  • 1Novartis has elected to extend the Research Collaboration and License Agreement with Alnylam Pharmaceuticals for one additional year, through October 12, 2010.
  • 2The extension of the agreement pertains to the research term of the collaboration focused on RNA interference (RNAi) therapeutics.
  • 3Novartis' election to extend does not change any other existing terms and conditions of the agreement.
  • 4Under the agreement, Novartis provides Alnylam with research funding, milestone payments, and royalties on net sales of any resulting products.
  • 5Alnylam retains rights to develop RNAi therapeutics for targets not selected by Novartis, with Novartis having a right of first offer.
  • 6Novartis holds a non-exclusive Integration Option to incorporate Alnylam's RNAi IP (excluding delivery technology) into its operations, which can be exercised during the extended research term, potentially leading to additional payments for Alnylam.
  • 7The agreement outlines termination rights for both parties under specific circumstances.

Frequently Asked Questions

The primary purpose of the agreement is for Alnylam and Novartis to collaborate on discovering and developing therapeutics based on RNA interference (RNAi) technology for selected gene targets.

The extension itself does not immediately change the financial terms. However, it prolongs the period during which Novartis can advance potential therapeutics, which could lead to Alnylam receiving future milestone payments and royalties on net sales of any successfully commercialized products derived from the collaboration.

Yes, Alnylam retains the right to discover, develop, commercialize, and manufacture RNAi compounds or products for targets not selected by Novartis. However, Novartis has a right of first offer on these additional targets before Alnylam can partner them with third parties.

The Integration Option is a non-exclusive right for Novartis to integrate Alnylam's RNAi intellectual property (excluding delivery technology) into its own operations. Novartis can exercise this option during the research term, which is now extended to October 2010, and would be required to make additional payments to Alnylam if exercised.