Alnylam Pharmaceuticals is one of the fortunate few in biotech with more than $500 million in the bank, so money is the least of its worries. But prioritizing a dizzying array of opportunities, and finding the best way to rally teams of bright people around them, is another thing altogether.
I got some insight into how Alnylam is thinking about these challenges in a couple of recent conversations with CEO John Maraganore. His Cambridge, MA-based biotech company (NASDAQ: ALNY) is watched closely in the scientific community and on Wall Street as a leader in the field of RNA interference, or gene-silencing. If this technology lives up to its billing, RNAi drugs will be able to effectively treat many diseases that were untouchable with drug technologies of the past.
Alnylam, founded in 2002, still has a relatively small internal staff by pharmaceutical standards, with about 165 people. So the company relies on three main ways to move its technology ahead on multiple fronts. It licenses certain rights to its wide-ranging technology platform to larger companies (such as Roche and Takeda); does deals (with the likes of Cubist and Kyowa Hakko) to co-develop specific products; and spins off companies to make the most of technologies that are related to RNAi, but different (first example: Carlsbad, CA-based Regulus Therapeutics.)
Maraganore says he’s become a fan of doing spin-off companies like Regulus, which was formed in 2007 by pooling Alnylam’s intellectual property in a field called microRNA with that of Carlsbad, CA-based Isis Pharmaceuticals. The new company structure made sense because Regulus aimed to do something different; microRNA therapeutics that are thought to control whole networks of genes instead of shutting down one or two specific disease-causing genes, which is what RNAi-based drugs aim to do. A new company structure made it possible to recruit some top pharmaceutical industry talent in Kleanthis Xanthopoulos, Peter Linsley, and Garry Menzel. It also kept the technology from getting lost in the shuffle of a growing internal portfolio, and kept Alnylam’s workforce from getting stretched too thin.
Within six months of its formation, Regulus scored big via a partnership with GlaxoSmithKline potentially worth more than $600 million. Suddenly, Alnylam’s 49 percent stake in the company looked quite a bit more valuable—and that’s gotten Alnylam thinking about spinning off other companies.
That said, Alnylam wants to make sure people don’t see it as a big incubator firm. “We’re not venture capitalists, we’re not in the business of starting companies to start companies. As we make advances in applications that are collateral assets and discoveries from our core, they might become new opportunities,” Maraganore says.
One of the interesting technologies that may lend itself to a spinoff is RNA activation, which I wrote about last September. This technique essentially does the opposite of RNAi, by turning on a gene that plays an important role in keeping a person healthy, Maraganore says. The company’s intellectual property might also veer off in other directions, like by enhancing stem cells for regenerative medicines, or by making novel immune-system boosting compounds called adjuvants for vaccines. Gene silencing techniques like Alnylam’s could be used to help improve the growth rate and hardiness of the Chinese hamster ovary cells that are a standard, and notoriously fickle, host organism for biotech drug manufacturing.
Although Maraganore didn’t promise that each of these ideas will lead to a new company, he made it sound like he’s at least thinking hard about the spin-off model as one way to build value in the programs.
“We learned a lot from the Regulus launch in a positive way, and we’ve learned how to use that model for other aspects of our technology. There will be some very creative things people will see throughout the year that will emerge from those initiatives. It’s going to be a banner year in terms of the partnerships we can do.”