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Breathing new life into pipeline
CAMBRIDGE, Mass.—Alnylam didn't go far to find a partner for its ALN-RSV program for the treatment of respiratory syncytial virus (RSV)—just 15 minutes down the road to Lexington, Mass.-based Cubist Pharmaceuticals Inc., a company with a track record in infectious disease and existing sales inroads into the inpatient, outpatient and emergency departments that Alnylam will need if its RSV program bears fruit.
The collaboration is structured as a 50-50 co-development and profit-sharing arrangement in North America, and a milestone- and royalty-bearing license arrangement in the rest of the world outside of Asia, where Alnylam partnered with Kyowa Hakko Kirin Co. Ltd. for its ALN-RSV program. Alnylam will receive an upfront payment of $20 million and also is eligible to receive development and sales milestone payments from Cubist that could total $82.5 million—as well as double-digit royalties on net sales outside of North America and Asia. After achieving certain development milestones, Alnylam could convert the North American co-development and profit share to a royalty-bearing license with development and sales milestones. Cubist will have sole rights for commercialization of the ALN-RSV program worldwide outside of Asia, subject to the cost and profit sharing in North America.
The deal is for the entire ALN-RSV program, though the focus for the moment is on ALN-RSV01, which is currently in Phase II clinical development for the treatment of RSV infection in adult lung transplant patients. Several other "potent and specific" second-generation RNAi-based RSV inhibitors from the Alnylam program are in preclinical studies.
"Cubist has been selling and commercializing CUBICIN for about five years now and it is the most successful launch of an IV antibacterial in history in terms of dollars," says Dr. Steven Gilman, senior vice president of discovery and nonclinical development and CSO for Cubist. "At last, we're at a point in the evolution of the company where we're making revenues and have the luxury to apply some of those revenues to build a sustainable pipeline, to make sure that we're solid when CUBICIN's patent protection expires."
Gilman says his company is working intensely in research and development with its own discovery capabilities and has already nominated two new INDs for antibacterial therapies. But in addition to having a good track record in infectious disease, he notes Cubist is going outside that realm as well—for example, with cardiovascular therapy—and that means they are looking at acute care more generally. Adding an antiviral therapy, such as one of Alnylam's RSV therapies, would keep Cubist inside its strongest area of expertise as well as widen its acute care and infectious disease range.
"We are also doing some work with an HCV compound that we came by in our acquisition of Illumigen Biosciences Inc., but that compound isn't quite at IND stage yet," Gilman notes. "We've been interested in the past commercially and medically in the RSV space, which represents a large unmet medical need in pediatrics and some special adult populations."
For Cubist, the deal is a high-risk, high-reward scenario, but one in which costs are heavily leveraged to success, making it what analyst Thomas J. Russo of Robert W. Baird & Co. Inc. calls "a disciplined and well-structured deal."
For Alnylam, it means an influx of money right now, but long term, and perhaps more importantly, the deal means access to the commercial infrastructure and access to hospitals and other clinical environments that it needs if and when an RNAi-based RSV therapy is ready to be brought to market.
"We knew we were unlikely to build an outpatient sales force, especially for our first product, so we always planned to partner this program," says Jason Rhodes, vice president of business development at Alnylam. "We wanted to create the most value we could, and Cubist rose to the top of the pile pretty naturally. They've developed a remarkably innovative development and sales program for CUBICIN and are generally very good at characterizing market opportunities and executing against them. Plus, they are very close to us physically and we have many people in both companies who have worked together before." DDN