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SAN FRANCISCO (Reuters) - French drugmaker Sanofi will buy a 12 percent stake in Alnylam Pharmaceuticals Inc for $700 million and deepen their partnership to develop drugs for rare genetic diseases.
The companies said in a joint statement on Monday that Sanofi would buy Alnylam shares for about $80 each, representing a 27 percent premium compared to their average price over the past 30 days.
The partnership between Sanofi and Alnylam began in 2012, the year after Sanofi jumped into the business of treating rare genetic diseases by paying more than $20 billion for U.S. biotechnology company Genzyme, a leader in the field.
The Genzyme drugs include blockbuster treatments such as Fabrazyme for a rare condition called Fabry disease and Cerezyme for Gaucher disease. They are among the world's most expensive drugs, costing as much as $200,000 per year.
Sanofi was attracted to Alnylam because of its technology, called RNA interference (RNAi), which prevents genes from making their designated proteins.
"This is a game-changing deal that will allow us to grow and accelerate development of RNAi therapeutics," Barry Greene, president and chief operating officer of Alnylam, said in a telephone interview.
The announcement by Sanofi and Alnylam coincides with the beginning of the annual JP Morgan Healthcare Conference, a four-day event in San Francisco where hundreds of drugmakers meet with bankers and industry analysts.
The companies originally agreed to work together to develop and sell Alnylam's lead product, patisiran, which is in late-stage trials for treatment of a rare life-threatening disease called transthyretin (TTR)-familial amyloid polyneuropathy. The condition, caused by misfolding of the TTR protein, damages the nervous system.
Sanofi originally only had rights to the drug in Japan and the broader Asia-Pacific region, where the disease is most common. But under the expanded partnership, it will have rights to sell the medicine, if it is approved, in all regions outside of North America and Western Europe, where Alnylam will retain exclusive rights.
Sanofi will now also obtain rights to three other Alnylam products, including one in mid-stage trials that also targets the TTR protein, in order to treat a type of heart disease called familial amyloid cardiomyopathy.
The companies will co-develop and co-market the product, called ALN-TTRsc, in North America and Western Europe, while Alnylam retains sales rights in the rest of the world. About 50,000 patients worldwide are believed to have the condition, or the related condition treated by patisiran, Greene said.
Sanofi will also now have rights to an Alnylam drug in early-stage trials for hemophilia and other genetic bleeding disorders, called ALN-AT3, Greene said, adding that up to 70,000 hemophiliacs worldwide could be helped by his product. Data from the trial are expected late this year.
Moreover, Sanofi will now have the right to option until at least 2020 the rights to develop and sell outside of North America and Western Europe all treatments for rare genetic diseases being developed by Alnylam that have yet to be tested in humans.
Greene said RNAi drugs, if approved in coming years, could become a new mainstay of treatment for a wide array of diseases.
"The entire biotech industry was founded on recombinant proteins and monoclonal antibodies, and has over $50 billion in annual revenue," Greene said. "RNAi therapeutis now have the opportunity to be the next product platform."
Beginning January 1, 2015, Alnylam is slated to receive research and development funding from Sanofi for programs the French drugmaker selects for the partnership. Also, Alnylam will be eligible to receive milestone payments and royalties from sales, the companies said.
Reporting by Ransdell Pierson; Editing by Miral Fahmy