Alnylam & Monsanto Collaborate - Analyst Blog

By Zacks Equity Research,

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Alnylam Pharmaceuticals, Inc. ( ALNY ) and Monsanto Company ( MON ) recently formed a strategic alliance to implement biological technologies in the field of agriculture. As per the alliance, Alnylam's broad RNAi-based (ribo nucleic acid interference) intellectual property (IP) and proprietary technologies along with Monsanto's new BioDirect technology will help deliver innovative biological solutions to farmers.

The Agreement

As per the terms of the agreement, Monsanto, a leading global provider of technology-based solutions and agricultural products, will acquire worldwide, exclusive rights to use Alnylam's technologies in the field of agriculture. Monsanto will be able to grant sub-licenses as well.

Alnylam will receive $29.2 million in upfront payments, along with milestone payments and other additional funding from Monsanto. The agreement also allows Alnylam to receive royalty payments on the products that will utilize the company's platform technology and IP. With this alliance, Monsanto becomes Alnylam's strategic partner in agriculture for the next 10 years.

Our Take

We are pleased to see Alnylam stepping beyond its primary focus area. This will promote broader use of the company's technology. Alnylam had earlier entered into key partnerships with companies like Medtronic, Inc. ( MDT ), Novartis AG ( NVS ), Biogen Idec Inc. ( BIIB ), Roche Holding AG ( RHHBY ), Takeda Pharmaceutical Company Limited ( TKPYY ) and Cubist Pharmaceuticals Inc. ( CBST ) to share its RNAi know-how.

The Monsanto alliance will fetch upfront, milestone payments and other additional funding that will strengthen the company's cash position. Alnylam exited the second quarter of 2012 with cash, cash equivalents and total marketable securities of around $293 million.

Besides these agreements, Alnylam makes use of its potentially revolutionary RNAi technology for the treatment of a wide array of diseases. The company expects to have five such RNAi therapeutic programs in advanced clinical development by the end of 2015. We expect investor focus to remain on the company's pipeline going forward.

The stock carries a Zacks #3 Rank (Hold rating) in the short run.

ALNYLAM PHARMA (ALNY): Free Stock Analysis Report
BIOGEN IDEC INC (BIIB): Free Stock Analysis Report
CUBIST PHARM (CBST): Free Stock Analysis Report
MEDTRONIC (MDT): Free Stock Analysis Report
MONSANTO CO-NEW (MON): Free Stock Analysis Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis Report
(RHHBY): ETF Research Reports
(TKPYY): ETF Research Reports
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: ALNY , BIIB , CBST , IP , MDT

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