8-KMaterial AgreementsFinancial EventsSecurities & Listing+2

ALNYLAM PHARMACEUTICALS, INC. 8-K Report, Material Agreement (Apr 13, 2020)

Filed April 13, 2020For Securities:ALNY

Summary

Alnylam Pharmaceuticals, Inc. (ALNY) has executed several material definitive agreements with affiliates of The Blackstone Group Inc. on April 10, 2020. These transactions include a royalty purchase, a significant debt facility, and an equity placement, totaling over $1.35 billion in capital. The royalty sale involves 50% of future royalties and 75% of commercial milestones from inclisiran, generating $1 billion in cash for Alnylam, paid in two installments. This move strategically enhances Alnylam's financial flexibility and capital for pipeline advancement. The company also secured a senior secured delayed draw term loan facility of up to $700 million, providing further borrowing capacity to be drawn over time and subject to certain conditions. In conjunction with these agreements, Alnylam completed a private placement of approximately $100 million in common stock to Blackstone affiliates, priced at a volume-weighted average price. This comprehensive financing package positions Alnylam with substantial liquidity to support its operations, research, and development activities, particularly for its key assets like inclisiran and its RNAi therapeutic portfolio. The details of the agreements, including covenants and repayment terms, are critical for investors to assess the company's financial health and strategic direction.

Key Highlights

  • 1Alnylam entered into a Royalty Purchase Agreement with Blackstone Royalties, selling 50% of inclisiran royalties and 75% of commercial milestones for $1 billion (paid in two tranches: $500M at closing, $500M on Sept 30, 2021).
  • 2A Debt Facility agreement provides Alnylam with access to a senior secured delayed draw term loan facility of up to $700 million, to be funded in three tranches.
  • 3The Tranche 2 and Tranche 3 loans ($250M each) are subject to Subsequent Borrowing Conditions, such as the first sale of inclisiran in the US or specific revenue thresholds for ONPATTRO® and GIVLAARI®.
  • 4Alnylam completed an Equity Placement, selling approximately $100 million of its common stock to Blackstone affiliates at $103.79 per share.
  • 5The debt facility is secured by intellectual property related to ONPATTRO®, GIVLAARI®, and vutrisiran, equity interests in subsidiaries, remaining inclisiran royalty ownership, and certain real and personal property.
  • 6The Credit Agreement includes restrictive covenants that may limit Alnylam's ability to incur additional liens, indebtedness, make investments, sell assets, or pay dividends.
  • 7The company must maintain a consolidated liquidity of at least $100 million per quarter under the terms of the debt facility.

Frequently Asked Questions

Alnylam secured a total of $1.1 billion through the royalty purchase and equity placement, with an additional potential $700 million available through a delayed draw term loan facility, bringing the total potential capital to over $1.8 billion.

The $700 million debt facility is a delayed draw term loan available in three tranches. The first tranche of $200 million is expected by December 31, 2020. The subsequent tranches ($250 million each) are subject to 'Subsequent Borrowing Conditions,' which include either the first commercial sale of inclisiran in the US post-FDA approval or achieving $300 million in revenue from ONPATTRO® and GIVLAARI® over a trailing twelve-month period. If these conditions are not met by specified dates, they must be satisfied by December 31, 2022.

By selling 50% of inclisiran royalties and 75% of commercial milestone payments, Alnylam has immediately generated $1 billion in cash. This strengthens their balance sheet and provides capital for operations and pipeline development, but it also means they will receive a smaller share of future revenue from inclisiran. There is a provision for the royalty percentage to increase to 55% if Blackstone does not receive at least $1 billion in payments by December 31, 2029.

Yes, the Credit Agreement contains negative covenants that may restrict Alnylam's ability to incur additional debt or liens, make certain investments or acquisitions, sell assets constituting collateral, pay dividends, or make other distributions. The company is also required to maintain a minimum consolidated liquidity of $100 million per quarter.