Alnylam Cuts Jobs On Partner Exit

Alnylam to cut up to 30% of workforce after a five-year collaboration with Novartis ends.
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CAMBRIDGE, Mass. (

TheStreet

) --

Alnylam Pharmaceuticals

(ALNY) - Get Report

announced significant job cuts late Thursday after its partner

Novartis

(NVS) - Get Report

said it was ending a five-year research partnership focused on gene silencing drugs.

The layoffs at Alnylam will encompass about 25-30% of the company's workforce that will cost the company about $3 million, most of which will be charged in the third quarter. Alnylam reaffirmed its cash guidance to end the year with more than $325 million in cash.

Alnylam is a developer of drugs based RNA interference, or RNAi, which uses snippets of genetic material to turn off genes that cause disease.

Novartis and Alnylam signed a three-year research partnership in 2005 that was extended until the end of 2010. On Thursday, Novartis informed Alnylam that the course of the collaboration was ending after Novartis chose 31 drug targets for further development. These drug targets are based on Alnylam's RNAi research and technology, which makes the company eligible for future milestones and royalties if Novartis successfully develops the targets into real drugs.

Internally, Alnylam's lead RNAi drug is RSV-101 in phase II studies for respiratory syncytial virus, a serious lung infection that mainly affects premature babies and people with compromised immune systems. Cubist Pharmaceuticals is Alnylam's development partner for RSV-101.

Alnylam has a liver cancer drug, ALN-VSP, in phase I development.

Alnylam shares closed Thursday at $14.22.

--Written by Adam Feuerstein in Boston.

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