Item 1.01. Entry into a Material Definitive Agreement.
Co-Development Agreement
In April 2020, Alnylam Pharmaceuticals, Inc. (the "Company") entered into a
strategic financing collaboration with certain affiliates of The Blackstone
Group Inc., including funds or accounts managed or advised by GSO Capital
Partners LP, Blackstone's credit platform, to support the Company's advancement
of its innovative RNA interference (RNAi) therapeutics. As part of this
collaboration, the Company and Blackstone Life Sciences Advisors L.L.C., an
affiliate of The Blackstone Group Inc., agreed in principle on a non-binding
term sheet that described a $150 million funding arrangement for certain of the
Company's development programs. In furtherance of this effort, on August 15,
2020, the Company entered into a Co-Development Agreement (the "Funding
Agreement") with BXLS V Bodyguard - PCP L.P. and BXLS Family Investment
Partnership V - ESC L.P. (collectively, "Blackstone"), pursuant to which
Blackstone will provide up to $150 million in funding for the clinical
development of vutrisiran and ALN-AGT, two of the Company's cardiometabolic
programs. Blackstone's funding for vutrisiran is a commitment to provide up to
$70 million to fund development costs related to the HELIOS-B Phase 3 clinical
trial. In addition, Blackstone has the right, but is not obligated, to fund up
to $26 million for development costs related to a Phase 2 clinical trial of
ALN-AGT and up to $54 million for development costs related to a Phase 3
clinical trial of ALN-AGT. Alnylam retains sole responsibility for the
development and commercialization of both vutrisiran and ALN-AGT.
As consideration for Blackstone's funding for vutrisiran clinical development
costs, the Company has agreed to pay Blackstone a 1% royalty on net sales of
vutrisiran for a specified royalty term, as well as tranched payments over a
two-year period upon regulatory approval of vutrisiran for ATTR-cardiomyopathy
in specified countries, unless it is later withdrawn from the market following a
mandatory recall. As consideration for Blackstone's funding for Phase 2 clinical
development costs of ALN-AGT, the Company has agreed to pay Blackstone tranched
payments over a four-year period upon the successful completion of the ALN-AGT
Phase 2 clinical trial, unless certain regulatory events affecting the continued
development of ALN-AGT occur. As consideration for Blackstone's funding for
Phase 3 clinical development costs of ALN-AGT, the Company has agreed to pay
Blackstone tranched payments over a four-year period upon regulatory approval of
ALN-AGT in specified countries, unless it is later withdrawn from the market
following a mandatory recall. In each case, the aggregate tranched payment
amount represents an agreed multiple of Blackstone's investment in the
applicable program and will be decreased if Blackstone does not fund the maximum
amount of the funding obligation or right, as applicable. The Company's payment
obligations under the Funding Agreement will be secured, subject to certain
exceptions, by security interests in intellectual property owned by the Company
relating to vutrisiran and ALN-AGT, as well as in the Company's bank account in
which Blackstone's funding deposits will be made.
The funding arrangement will be governed by a joint steering committee that will
be comprised of an equal number of representatives from each party.
The Company and Blackstone each have the right to terminate the Funding
Agreement in its entirety in the event of the other party's bankruptcy or
similar proceedings. The Company and Blackstone may each terminate the Funding
Agreement in its entirety or with respect to either product in the event of an
uncured material breach by the other party, or with respect to a product for
certain patient health and safety reasons, or if regulatory approval in
specified major market countries is not obtained for the product following the
completion of clinical trials for the product. In addition, Blackstone has the
right to terminate the Funding Agreement in its entirety upon the occurrence of
certain events affecting the Company's ability to make payments to Blackstone or
to develop or commercialize the products, or upon a change of control of the
Company. Blackstone may also terminate the Funding Agreement with respect to a
product if the joint steering committee elects to terminate the development
program for that product in its entirety, if certain clinical endpoints are not
achieved for that product or, with respect to vutrisiran only, if the Company's
right to develop or commercialize vutrisiran is enjoined in a specified major
market as a result of an alleged patent infringement. In certain termination
circumstances, the Company will be obligated to pay Blackstone an amount that is
equal to, or otherwise based on, the development funding received from
Blackstone, and the Company may remain obligated under certain circumstances to
make the tranched payments to Blackstone described above, or the royalty
described above in the case of vutrisiran, should the Company obtain regulatory
approval for vutrisiran or ALN-AGT following termination.
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The Funding Agreement includes various representations, warranties, covenants,
dispute escalation and resolution mechanisms, indemnities and other provisions
customary for transactions of this nature.
Amendment to Credit Agreement
In connection with the Funding Agreement, on August 15, 2020, the Company
entered into the First Amendment (the "First Amendment") to the Credit Agreement
dated April 10, 2020 among the Company, certain subsidiaries of the Company,
funds or accounts managed or advised by GSO Capital Partners LP and certain
other affiliates of The Blackstone Group Inc. and the other lenders from time to
time party thereto, and Wilmington Trust, National Association, as the
administrative agent for the lenders (the "Credit Agreement"). The First
Amendment adds certain intellectual property owned by the Company relating to
ALN-AGT as collateral under the Credit Agreement and makes certain other
amendments related thereto and the Funding Agreement.
The foregoing summaries of the Funding Agreement and the First Amendment are not
complete and are qualified in their entirety by reference to the complete text
of the Funding Agreement and the First Amendment, each of which the Company
intends to file as an exhibit to its Quarterly Report on Form 10-Q for the
quarter ending September 30, 2020.
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