Business Context and Reporting Period
This Form 8-K Current Report was filed by Alnylam Pharmaceuticals, Inc. on April 20, 2018, regarding events occurring on April 18, 2018. The filing details the resolution of ongoing litigation between Alnylam and Dicerna Pharmaceuticals, Inc. through a Settlement Agreement and General Release.
Key Financial Metrics
The filing does not provide standard financial statements, revenue, profit, cash flow, margins, debt, or liquidity metrics for the reporting period. The primary financial impact disclosed is the settlement consideration received from Dicerna Pharmaceuticals, Inc., totaling an aggregate of $25.0 million, structured as follows:
- Upfront Cash Payment: $2.0 million.
- Equity Payment: 983,208 shares of Dicerna common stock, valued at $10.0 million.
- Contingent Payments: An additional $13.0 million payable over the next four years (by no later than April 18, 2022), contingent upon revenue Dicerna receives from future partnerships related to GalNAc-conjugated RNAi research and development.
Material Changes
The material change reported is the dismissal with prejudice of all claims and counterclaims in two pending litigations: (i) Alnylam v. Dicerna in the Massachusetts Superior Court for Middlesex County, and (ii) Dicerna v. Alnylam in the United States District Court for the District of Massachusetts. This resolution eliminates legal uncertainty and establishes a new revenue stream via the settlement payments.
Outlook, Risks, and Unusual Items
Management Commentary and Restrictions: The agreement includes mutual releases and no admission of liability by either party. Dicerna is restricted from developing oligonucleotide-based therapeutics directed toward a defined set of Alnylam targets for periods ranging from 18 months to four years. The agreement does not include any license to Alnylam's GalNAc conjugate intellectual property.
Risks and Contingencies: The receipt of the $13.0 million contingent portion of the settlement is not guaranteed and depends on Dicerna's future commercial success with specific partnerships. The timing of these payments is variable based on Dicerna's revenue generation.
Investor Verification Checklist
- Verify the fair market value of the 983,208 Dicerna shares received at the time of settlement.
- Monitor Dicerna's future partnership announcements to assess the likelihood of receiving the $13.0 million contingent payments.
- Confirm the specific "defined set of Company targets" to which Dicerna's development restrictions apply.
- Review subsequent filings to ensure the upfront cash payment of $2.0 million was received and properly recorded.