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ASAP BioPharma Conference Keynote Address, Part Two: John Maraganore Describes the Roadmap for Success in the Alnylam-Genzyme Partnership

Posted By John W. DeWitt , Thursday, September 18, 2014

Petra Sansom, head of alliance management at Genzyme, described Alnylam as “a very collaborative partner—from senior management to project teams.” In particular, she commented after listening to Alnylam CEO John Maraganore speak in-depth about the two companies’ landmark alliance, “I have very strong CEO engagement for this alliance. For me as an alliance manager, it makes it really valuable. We have a very rich portfolio on the rare disease side and a shared vision of a multiyear, multi-asset collaboration.”

 

In his keynote address at the 2014 ASAP BioPharma Conference in Boston USA on Thursday, Sept. 4, Maraganore described this shared vision, honing in on Alnylam’s deal strategy and framework for managing its partnership with Sanofi-owned Genzyme. In January, Alnylam, a pioneer in the development of RNA interference (RNAi) therapies, signed a far-reaching deal to expand its Genzyme partnership, which began in October, 2012. (Click here for Part One of our coverage of Maraganore’s lively and richly detailed keynote address.)

 

Maraganore described some of Alnylam’s “strategic considerations in December of last year before we did this deal” with Genzyme, including:

 

  • The success of the underlying science. “The science works. It’s a modular, reproducible platform, and opportunities abound with ‘just’ liver delivery alone,” he explained. “Even with liver delivery, we have more on our plates than we can deal with.”
  • How to access capabilities and funding. “With the complexity of product development and commercialization, $1 billion was required to reach profitability.” But Alnylam couldn’t give away the farm to get that funding. “We felt we needed to retain significant product rights to build maximal value—we want to build billion-dollar biotech, and felt we needed to maintain development and commercial control to fulfill our commitment to patients with Alnylam’s urgency.” 
  • How to maximize value while maintaining independence. Maraganore went on to ask rhetorically, “If it goes to your partner, have you given away the company?” For Alnylam, he emphasized, there was “absolute desire at the level of the board to build an independent company, because we believe we can build a lot more value than if we get acquired by somebody else.”

On the backbone of the success of Alnylam’s first alliance in 2012 with Genzyme (“ for Japan and Asia/Pacific, with $22.5 million up front , additional milestone payments totaling $50 million, and tiered royalties”) “we generated some very critical human data in our TTRsc program. These data were the validation of our potential to expand the pipeline—they convinced our technical colleagues at Genzyme and cemented the impression that this approach could be transformative.”

 

Maraganore and his counterpart David Meeker, CEO of Genzyme, deliberately set out to create a “Roche-Genentech-like expanded alliance” and forged the deal on a “rapid timetable from August 2013 to January 2014, with the contract signed right before JP Morgan [Healthcare Conference]” in San Francisco. “The world loved it, there was lots of media coverage and fanfare—that was all a lot of fun,” Maraganore commented before getting down to the nuts and bolts of what he described as “a transformational alliance to expand and accelerate global product value.” Key elements include:

 

  • Multiproduct, option-based scope and structure.
  • Geographic license structure – Alnylam retains North America and Western Europe, with Genzyme having the option (expires 2019 or no later than 2021) for the rest of the world
  • Rare disease field only.
  • Eight programs must hit Proof of Concept.
  • An overall alliance built and managed around the “Alnylam 5x15 pipeline” and future RNAi therapeutics as genetic medicines.

“It is a good deal for Genzyme because they are coming in after human studies,” Maraganore pointed out. “The default mode is Alnylam keeps North America and Europe, but there are exceptions – e.g. areas where there’s significant market development needed and we can do it leveraging the infrastructure and resources of Genzyme and Sanofi.” Another exception was in the area of hemophilia—Genzyme “wanted more product rights to justify the investment,” he explained, adding that “equity agreements were very important, [therefore] very heavily negotiated.”

 

The ongoing relationship is carefully managed through what Maraganore called an “Alliance Management Best Practice Framework.” He emphasized executing on the “basic but critical” elements of effective alliance management—“start off well and keep it up!” with

  •  Shared mission
  • Clear goals, roles, and expectations
  • Explicit governance and decision-making
  • Collaborative relationships and communication
  • Senior commitment, supportive culture, and champions
  • Proactive management of scientific challenges

Indeed, senior executives from both companies are deeply involved in alliance governance and day-to-day operations, Maraganore said.

 

“The Alliance Joint Steering Committee (AJSC) is the highest level of our alliance team, with very senior people—our president is on that team, the head of rare disease at Genzyme, our chief medical officer, and so on,” he said. “CEOs get involved if the AJSC can’t achieve consensus. The AJSC coordinates overall activities and coordinates disputes—it’s the decision-making body. We also have product-specific steering committees, a portfolio advisory committee, [and other committees including] pipeline advisory, intellectual property, manufacturing, and finance.”

 

Maraganore and his counterpart, Genzyme CEO David Meeker, are not just champions but also very actively engaged in the day-to-day of the alliance. “I have a close working relationship with David, both formal and casual,” Maraganore said. “I get texts from my wife, kids, and David. We see each other in meetings, we meet monthly, and we have dinner together occasionally.”

Tags:  2014 ASAP BioPharma Conference  Alliance Joint Steering Committee  Alnylam  David Meeker  Genzyme  John Maraganore  Petra Sansom  Roche-Genentech  TTRsc program 

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