Alnylam to cut work force by up to 30% as five-year deal with Novartis comes to a close

USA-based RNAi therapeutics specialist Alnylam Pharmaceuticals (Nasdaq: ALNY) says that Swiss drug major Novartis (NOVN: VX) has notified the company that, under their five-year agreement, it has formally selected its full and final list of 31 targets, for which it has exclusive rights to discover, develop and commercialize RNAi therapeutics using Alnylam intellectual property and technology.

In return, for any RNAi therapeutic products Novartis develops against these targets, Alnylam is entitled to receive significant milestone payments upon achievement of certain specified development and annual net sales events. In addition, Novartis has declined its option to execute an Adoption License per the terms of the original 2005 accord. Novartis has told Alnylam that it remains fully committed to advance its RNAi therapeutic programs based on Alnylam intellectual property and technology.

Alnylam also announced that it will effect a corporate restructuring with an approximately 25% to 30% reduction in overall workforce, resulting in savings of around $25 million next year, as a result of completing the fifth and final planned year of the Novartis alliance. Finally, Alnylam is reaffirming its financial guidance of ending 2010 with greater than $325 million in cash.