Should Alnylam Pharma Be Getting More Credit for Its Regeneron Deal?

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Alnylam Pharmaceuticals Inc. (NASDAQ: ALNY) and Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) have announced a collaboration to discover, develop and commercialize new RNA interference (RNAi) therapeutics for a broad range of diseases by addressing disease targets expressed in the eye, central nervous system (CNS) and liver.

Ultimately, the collaboration will leverage both companies’ scientific and technological expertise and will build on Alnylam’s recent preclinical data showing potent and highly durable delivery of RNAi therapeutics to achieve target gene silencing in the eye and CNS. The collaboration also will benefit from Regeneron’s industry-leading VelociSuite technologies and capabilities from the Regeneron Genetics Center.

Under the terms of the alliance, Alnylam will work exclusively with Regeneron to discover RNAi therapeutics for eye and CNS diseases. Regeneron will lead development and commercialization for all programs targeting eye diseases, with Alnylam entitled to potential milestone and royalty payments.

The companies will jointly advance and alternate leadership on CNS programs, with the lead party retaining global development and commercial responsibility. For CNS programs, both companies will have the option at candidate selection to participate equally in potential future profits of programs led by the other party.

Also according to the deal, Regeneron has agreed to make a $400 million upfront payment to Alnylam and to purchase $400 million of Alnylam equity at a price per share of $90 (4.44 million common shares). Alnylam is eligible to receive up to an additional $200 million in milestone payments upon achievement of certain criteria during early clinical development for the eye and CNS programs.

Keep in mind that Alnylam has a market cap just shy of $10 billion, and this deal could represent about a 10% bump if everything goes through.

Shares of Alnylam were last seen down less than 1% at $92.23, in a 52-week range of $60.27 to $124.22. The stock has a consensus price target of $120.67.

Regeneron traded down about 2.5% at $398.77 a share. The 52-week range is $281.89 to $442.00, and the consensus analyst target is $430.24.


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