Blackstone Invests $2 Billion in Alnylam Pharmaceuticals
April 13 2020 - 7:14AM
Dow Jones News
By Miriam Gottfried
Blackstone Group Inc. is investing $2 billion in Alnylam
Pharmaceuticals Inc. through a combination of equity and debt,
giving the biotech company the cash it needs to bring more of its
products to market.
The biggest piece of the deal, which the companies expect to
announce later Monday, consists of a $1 billion investment led by
Blackstone Life Sciences to purchase up to 10% of the future total
royalties of inclisiran, a drug to treat high cholesterol. The
life-sciences unit will also invest up to $150 million in the
development of two other Alnylam drugs.
On top of that, Blackstone credit arm GSO Capital Partners is
providing Alnylam with a term loan of up to $750 million, and
Blackstone is buying $100 million of the company's newly issued
stock. The deal gives Alnylam, a publicly traded company with a
market capitalization of around $13 billion, the firepower to move
through the costly phase of bringing late-stage drugs to market.
With Blackstone receiving a relatively small amount of stock,
Alnylam avoids significantly diluting its existing
shareholders.
"We're using our domain expertise, together with our scale, to
solve a unique problem for Alnylam, while advancing potentially
game-changing treatments for patients," said Nicholas Galakatos,
head of Blackstone Life Sciences.
Inclisiran is designed to be administered as a semiannual
injection for patients with high cholesterol for whom traditional
cholesterol drugs haven't been effective. The companies expect to
receive approval from the U.S. Food and Drug Administration in the
fourth quarter and from European regulators in the following
quarter.
The loan component of the deal is noteworthy both for its size
and because biotech companies with unproven drugs and uncertain
cash flow are often considered too risky for many lenders. Alnylam
was unique because it has two drugs already on the market and a
manufacturing facility, in addition to the new cholesterol drug,
said Brad Marshall, a senior managing director at GSO.
The combination of relatively low risk and relatively high need
for capital puts Alnylam in the sweet spot for Blackstone Life
Sciences, a business line the private-equity firm launched in the
fall of 2018 when it purchased Mr. Galakatos's investment firm
Clarus.
In February 2019, Blackstone Life Sciences invested $250 million
in a joint venture with Novartis AG to develop drugs to treat blood
clots. In November, the unit contributed $400 million to a joint
venture with Ferring Pharmaceuticals Inc. to develop and market a
gene therapy to treat bladder cancer.
A regulatory filing in January showed that the life-sciences
unit had raised $3.4 billion so far of the $4.6 billion it is
targeting for a new fund.
Blackstone Group, which had $571 billion in assets under
management at the end of 2019, is counting on such initiatives,
along with growth investing, insurance and infrastructure, to help
it achieve its goal of reaching $1 trillion in assets by 2026.
Blackstone, under Chief Executive Stephen Schwarzman, had about
$150 billion in unspent cash to do deals as of the end of last
year.
Based in Cambridge, Mass., Alnylam was founded in 2002 and went
public in 2004. It designs its drugs using a technology called RNA
interference, which intercepts disease-causing proteins.
"With this capital infusion, we can now get to profitability
without the drip, drip, drip of equity dilution," Alnylam Chief
Executive John Maraganore said.
Write to Miriam Gottfried at Miriam.Gottfried@wsj.com
(END) Dow Jones Newswires
April 13, 2020 06:59 ET (10:59 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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