Collaborations, R&D

Regeneron, Alnylam spell out a research alliance that could run beyond a decade, with billions built in for success

Regeneron $REGN and Alnylam $ALNY have laid a foundation for an enduring R&D alliance that could go out well past a decade, with billions of dollars on the line if they’re successful.

We already know that Regeneron is paying $800 million for the upfront and equity stake, with another $200 million for proof-of-principle milestones — which we’ve noted makes it one of the top platform deals in industry history. 

In an SEC filing Wednesday, Regeneron went deeper into the numbers and terms. These added deal terms are particularly important as they create a bond that represents a whole new generation of drug development work for two of the most important biotechs in the industry. And it arrives as each are turning from collaborations with Sanofi and designing a new future for themselves.

There’s an automatic extension built into the deal that could extend this pact by 7 years. And Regeneron holds an option to add 5 years that would be worth anywhere from $200 million to $400 million for Alnylam. The actual amount will be based on acceptance of their INDs, with the partners planning on 6 new targets each year.

Regeneron, as we already know, is taking the lead on the eye, where it’s looking to Alnylam to help establish a durable defensive barrier around the franchise it’s built for Eylea. Then they’ll alternate lead roles for CNS diseases and liver programs, with a shot at co-collaborations where they’ll split the profits.

That lead role won’t come cheap. The lead will pay the partner up to $150 million in milestones, plus royalties, on each program.

Then there’s a $325 million milestone consideration that’s being built into a special alliance for their two C5 programs, coming together as a combination therapy to take on Alexion’s cash cow Soliris and the successor drug that just hit the market.

Alnylam CEO John Maraganore also built in some safeguards against seeing Regeneron go hostile in a takeover attempt after it’s bought into the company. Regeneron agreed to limit any equity purchases of Alnylam stock to 30% of the company during the length of the collaboration. 

And Regeneron can terminate the alliance with 90 days notice, in case the execs aren’t happy.

If they’re successful, they can both enjoy bigger pipelines and more commercial rollouts. Failure incinerates the financials that are baked in now.

Image source: AP

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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