8-KLeadership ChangesFinancial EventsOther Events

ALNYLAM PHARMACEUTICALS, INC. 8-K Report, Exit or Disposal Costs (Sep 24, 2010)

Filed September 24, 2010For Securities:ALNY

Summary

Alnylam Pharmaceuticals, Inc. (ALNY) announced a corporate restructuring, including a workforce reduction of approximately 25-30% of its overall personnel. This move is a consequence of the completion of the fifth and final year of its research and collaboration agreement with Novartis Institutes for BioMedical Research, Inc. The company anticipates this restructuring will lead to approximately $25.0 million in savings on 2011 cash operating expenses, with one-time charges of about $3.0 million, primarily in Q3 2010. The workforce reduction is expected to be substantially completed by the end of Q4 2010. In addition, the company provided an update on its Novartis collaboration. Novartis has selected 31 disease targets for which it holds exclusive rights to discover, develop, and commercialize RNAi therapeutic products using Alnylam's technology. Alnylam is eligible to receive milestone payments up to an aggregate of $75.0 million per product for these targets. Novartis has, however, declined its option to integrate Alnylam's fundamental and chemistry intellectual property into its operations.

Key Highlights

  • 1Alnylam Pharmaceuticals to reduce workforce by 25-30% due to the conclusion of the Novartis collaboration.
  • 2Anticipated savings of $25.0 million in 2011 cash operating expenses from the restructuring.
  • 3One-time charges of approximately $3.0 million related to personnel reductions, mostly in Q3 2010.
  • 4Novartis has selected 31 disease targets for exclusive RNAi therapeutic development using Alnylam's technology.
  • 5Alnylam is eligible for up to $75.0 million in milestone payments per therapeutic product from the Novartis collaboration.
  • 6Novartis declined its option to integrate Alnylam's intellectual property into its operations.
  • 7Director James L. Vincent retired from the Board; Steven M. Paul, M.D. was elected as a new director.

Frequently Asked Questions

The workforce reduction of 25-30% is a direct result of the planned completion of the fifth and final year of the research and collaboration agreement with Novartis Institutes for BioMedical Research, Inc. and a consequently reduced need for service-based collaboration resources.

Alnylam expects to achieve approximately $25.0 million in savings on 2011 cash operating expenses. There will also be one-time charges related to the personnel reductions totaling approximately $3.0 million, with the majority recognized in the third quarter of 2010.

Novartis has executed its right to select 31 disease targets for which it has exclusive rights to discover, develop, and commercialize RNAi therapeutic products using Alnylam's technology. Alnylam stands to receive milestone payments for these products, potentially up to $75.0 million per product. However, Novartis has declined its option to integrate Alnylam's fundamental and chemistry intellectual property.

Yes, James L. Vincent retired from the Board on September 22, 2010. On the same day, Steven M. Paul, M.D. was elected as a Class III director. Dr. Paul received a stock option grant for 30,000 shares, vesting over three years, and will be compensated as per the company's policy for non-employee directors.