8-KMaterial AgreementsSecurities & ListingRegulation FD+1

ALNYLAM PHARMACEUTICALS, INC. 8-K Report, Material Agreement (Jan 13, 2014)

Filed January 13, 2014For Securities:ALNY

Summary

Alnylam Pharmaceuticals, Inc. (ALNY) announced a significant material definitive agreement on January 10, 2014, to acquire all outstanding shares of Sirna Therapeutics, Inc. from Merck Sharp & Dohme Corp. (Seller) and Merck & Co., Inc. This strategic acquisition involves a cash payment of $25.0 million and the issuance of approximately 2.52 million shares of Alnylam's common stock, valued at $150.0 million at the time of agreement. This transaction is expected to close in the first quarter of 2014 and will result in Merck beneficially owning approximately 3.8% of Alnylam's outstanding shares post-closing. The acquisition is focused on enhancing Alnylam's RNAi therapeutics pipeline, particularly by gaining rights to existing intellectual property and pre-clinical candidates. The deal includes potential milestone payments totaling up to $115.0 million tied to regulatory and commercial success, as well as low to single-digit royalties on net sales. The issuance of Alnylam's stock is exempt from registration under the Securities Act, indicating a private placement. Merck will be subject to lock-up restrictions on the shares they receive, preventing immediate disposal.

Key Highlights

  • 1Alnylam Pharmaceuticals is acquiring Sirna Therapeutics, Inc. from Merck for $25 million in cash and $150 million in Alnylam common stock.
  • 2The transaction is expected to close in Q1 2014, subject to customary closing conditions.
  • 3Merck will receive up to an additional $115 million in milestone payments and low to single-digit royalties based on the success of acquired RNAi products.
  • 4Merck will hold approximately 3.8% of Alnylam's outstanding shares post-acquisition.
  • 5Merck is subject to a six-month initial lock-up period on the shares received, followed by an additional six-month lock-up on 50% of those shares.
  • 6The acquisition aims to bolster Alnylam's RNAi therapeutics pipeline, including intellectual property and pre-clinical candidates.
  • 7The issuance of Alnylam common stock to Merck is considered a private placement and exempt from SEC registration.

Frequently Asked Questions

The primary purpose is to enhance Alnylam's RNAi therapeutics pipeline by acquiring Sirna Therapeutics' intellectual property and pre-clinical candidates, strengthening its position in the development of RNA interference-based medicines.

Merck will receive $25.0 million in cash and $150.0 million worth of Alnylam common stock. Additionally, Merck is eligible for up to $115.0 million in milestone payments and low to single-digit royalties on future sales of acquired products.

No, Merck is subject to lock-up agreements. They cannot dispose of the acquired Alnylam shares for six months after closing, and for an additional six months, 50% of those shares are also subject to restrictions.

Following the transaction, Merck is expected to beneficially own approximately 3.8% of Alnylam's outstanding common stock.