8-KMaterial Agreements

ALNYLAM PHARMACEUTICALS, INC. 8-K Report, Material Agreement (Aug 28, 2012)

Filed August 28, 2012For Securities:ALNY

Summary

This 8-K filing by Alnylam Pharmaceuticals, Inc. (ALNY) on August 28, 2012, announces a significant material definitive agreement with Monsanto Company. The core of this agreement is a worldwide, exclusive license granted to Monsanto for Alnylam's RNAi platform technology and intellectual property within the agricultural field. This partnership positions Alnylam to leverage its core technology in a new, substantial market beyond its traditional human health focus. From an investor's perspective, the immediate financial benefit is a $29.2 million upfront cash payment from Monsanto, along with near-term milestone payments and potential future revenue streams. These include funding for collaborative research, a percentage of sublicense fees, and low single-digit royalties on net sales of future agricultural products developed using Alnylam's technology. The agreement has a ten-year collaboration term, with Alnylam's fundamental RNAi patents expected to expire between 2016 and 2025, providing a clear runway for potential revenue generation.

Key Highlights

  • 1Alnylam Pharmaceuticals entered into a License and Collaboration Agreement with Monsanto Company on August 27, 2012.
  • 2The agreement grants Monsanto an exclusive, worldwide license to Alnylam's RNAi platform technology and intellectual property in the field of agriculture.
  • 3Monsanto will serve as Alnylam's exclusive collaborator in the agriculture sector for a ten-year period.
  • 4Alnylam receives an upfront cash payment of $29.2 million from Monsanto.
  • 5The agreement includes provisions for near-term milestone payments, funding for collaborative research, and potential revenue from sublicensing fees.
  • 6Alnylam is entitled to receive low single-digit royalty payments on worldwide net sales of licensed agricultural products by Monsanto and its sublicensees.
  • 7Alnylam's fundamental RNAi patents licensed under the agreement are expected to expire generally between 2016 and 2025.

Frequently Asked Questions

The agreement grants Monsanto an exclusive, worldwide license to Alnylam's RNAi platform technology and intellectual property for use in the agricultural field. This allows Alnylam to commercialize its technology in a new sector through a strategic collaboration.

Alnylam will receive an upfront cash payment of $29.2 million from Monsanto. Additionally, there are provisions for near-term milestone payments tied to technology transfer and patent milestones.

Future revenue can be generated through several streams: funding for collaborative research efforts, a percentage of sublicense fees Monsanto may receive from third parties, and low single-digit royalties on the net sales of agricultural products developed and sold by Monsanto or its sublicensees using Alnylam's licensed intellectual property.

The collaboration is for a ten-year period. Alnylam's fundamental RNAi patents that are part of this agreement are generally expected to expire between 2016 and 2025, providing a potential revenue window during and after the collaboration term, subject to patent extensions.