Alnylam, Tekmira shares rise after deal announced
Shares of Alnylam Pharmaceuticals Inc. and Tekmira Pharmaceuticals Corp. both jumped in Tuesday trading, a day after the companies said they resolved litigation and reached a deal for a new licensing agreement.
THE SPARK: Alnylam, based in Cambridge, Mass., said it will pay a total of $65 million to Tekmira. That includes $35 million to end previous license agreements between the companies and $30 million to secure rights for Alnylam to make its own lipid nanoparticle-based products.
Tekmira, which is based in Vancouver, British Columbia, also may receive an additional $10 million in milestone payments if certain products in Alnylam's pipeline develop.
Tekmira CEO Mark J. Murray said they expect the milestones to be met sometime in the next year.
THE BACKGROUND: Alnylam said the new licensing agreement clarifies intellectual property rights tied to lipid nanoparticle, or LNP, technology.
"With this restructuring of our Tekmira relationship, we are gaining independence in our LNP manufacturing and decreasing the milestone and royalty burdens on several of our LNP-based products," Alnylam President and Chief Operating Officer Barry Greene said in a statement.
Tekmira said in a separate statement the agreement also gives it clarity on intellectual property issues and a cash payment "that will enable us to continue the execution of our business plan into 2015."
LNP technology acts as a delivery mechanism for RNAi therapies, which work by turning off or silencing disease-causing genes. Lipid nanoparticles act like tiny oil drops that travel through a patient's blood stream to find a disease.
SHARE ACTION: Alnylam shares climbed 5.1 percent, or 82 cents, to $16.94 in Tuesday afternoon trading, while shares of Tekmira, a much smaller company, rose 67 cents, or 13 percent, to $5.79. Meanwhile, the Nasdaq composite index fell slightly.