ALNY Alnylam Pharmaceuticals Inc

Alnylam gets cash and $750 million loan to help bring late-stage drugs to market

By Miriam Gottfried 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (April 14, 2020).

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, announced 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.

The Wall Street Journal first reported the deal earlier Monday.

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 14, 2020 02:47 ET (06:47 GMT)

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