Alnylam made quite a splash in early 2014 when it announced that it had acquired Merck’s RNAi subsidiary Sirna for $175 million. The deal to acquire Merck’s group, which the pharma giant had bagged in a $1.1 billion buyout in 2006, included some valuable delivery tech that Alnylam thought would benefit its GalNAc platform.
But there was a fly in that ointment that would drive Alnylam $ALNY to sue RNAi rival Dicerna $DRNA 18 months later in state court for allegedly misappropriating trade secrets that dealt with that GalNAc tech. According to Alnylam, Dicerna had improperly swept up tech Alnylam paid for when it hired a group of scientists ousted from Merck after the pharma giant had decided to shut it all down and offload the work. After a long series of legal moves, that case is supposed to move forward to a trial in the spring of 2018.
Dicerna, though, says it’s the victim now. Alnylam’s suit, the biotech says in a new lawsuit filed in federal court in Boston this week, is nothing but a sham aimed at blocking a rival program from beating Alnylam in the clinic, chilling potential partnerships while grabbing a monopoly for itself in the RNAi space. And Dicerna wants a federal judge to put a stop to it under federal antitrust laws in the Sherman Act.
The crux of Dicerna’s monopoly claims spotlights an Achilles heel in trade secrets that any biopharma exec will want to pay close attention to. It also provides some compelling anecdotes about how easily research leaked out of Merck after the company decided to punt their R&D flop. Dicerna is claiming that Merck executives practically did everything but help carry suitcases loaded with research out the door as they helped line up new jobs for the departing Sirna staffers. And their case details numerous instances of just how helpful they could be.
“During the final months leading up to the sale of its RNAi program Merck allowed its terminated scientists to remove information without any effective check on their activities,” Dicerna claims. There were no exit interviews. No monitoring of the departing researchers. No effort to prevent downloading or corral documents.
“Merck management affirmatively encouraged the terminated scientists to take slides and other information with them” to help land new jobs. They even gladly told one of Dicerna’s new hires to take info needed for publications he was working on. “Indeed, even after Alnylam sent a January 26 letter to Dicerna demanding the return of alleged trade secrets, at least one Merck employee continued to send documents to that scientist with information relating to work he was doing on a manuscript they hoped to publish.”
Legally, in order to claim that someone misappropriated trade secrets, you have to show that the “secrets” were properly guarded. If you don’t take “reasonable” efforts to protect it, it can’t be misappropriated. In other words, if you don’t guard the door, you can’t say anyone walking out with your data was stealing it. Alnylam even accused one of Dicerna’s scientists with rolling out information in suitcases without anyone at Merck trying to stop him.
So why not just fight it out in state court?
Because Dicerna claims that Alnylam’s real intent is to keep it under a cloud, chilling any partnerships, licensing deals and alliances which are the life blood of biotech. Two potential partners walked away, Dicerna’s suit claims, because of the litigation. At least one wouldn’t even talk to the company because of the case.
That gives the bigger Alnylam an unfair advantage, the suit alleges, as they each try to steer rival programs for primary hyperoxaluria type 1 (PH1) through the clinic.
“By impeding Dicerna’s competitive efforts, Alnylam will be able to monopolize the market for the development (of) RNAi-based treatment of PH1,” Dicerna says. That will stop their broader based program that includes PH2 and PH3. Dicerna wants a federal judge to stop the monopoly move rather than leave patients with one or no choice, forcing them to pay more.
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