Another Partner for Biogen
By Brian Lawler
September 21, 2006
It seems that not a week goes by when I'm not writing about Biogen IDEC (Nasdaq: BIIB) licensing a drug or signing up a new partner. For a biopharmaceutical company of its size, Biogen definitely takes the cake as the most prolific drug-acquirer.
After the market closed yesterday, Biogen added another collaboration agreement with Alnylam Pharmaceuticals (Nasdaq: ALNY) to its long list of partners. This time, Biogen isn't licensing any drug in clinical trials, but rather paying for Alnylam to do research in hopes of developing a drug candidate to treat a very rare disease called progressive multifocal leukoencephalopathy (PML).
If the acronym PML rings a bell to Biogen investors, it's because PML is the ultra-rare condition, usually occurring in people with immune deficiencies, that caused Tysabri, the company's innovative multiple sclerosis drug, to be removed from the market for more than a year after PML occurred in three patients who took the drug.
The potential payout of the deal with Alnylam is fairly modest compared with the valuable insight into PML that Biogen could gain from Alnylam's research. Biogen will initially pay Alnylam $5 million up front, up to $51 million in milestone payments, and royalties for any drug that might successfully be developed. Additionally, Biogen will cover all research and development costs.
Could the Tysabri-PML link have motivated Biogen to partner with Alnylam in search of a treatment for the disease? Who knows, but before the potential connection between Tysabri and PML popped up, many observers expected Tysabri to be a multibillion-dollar drug, capturing a large share of the market for multiple sclerosis treatments.
There is currently no cure for PML. The disease is usually deadly, and any viable fruits of this collaboration will take years to produce.
Besides the direct upside of producing another drug to treat a rare disease, if Biogen and Alnylam can find a better treatment for PML, it would only help to increase Tysabri usage, helping patients and doctors to become less apprehensive about the drug.