Tekmira to Receive $65M Within Ten Days, $10M to Follow

Monday night, Tekmira Pharmaceuticals (TSE:TKM) (NASDAQ:TKMR) announced that it reached a litigation settlement with Alnylam Pharmaceuticals (NASDAQ:ALNY) and will receive $65 million from Alnylam within ten days, eligible for another $10 million in future milestone payments. With 14.01M shares outstanding, the settlement is equivalent to $4.64 per share; TKMR closed Monday at $5.12. And if Tekmira reaches the agreed-upon milestones, Alnylam will supply an additional $10M, or $0.71 per share. The long-anticipated settlement restructures the licensing agreement between Alnylam and Tekmira, providing clarity around the intellectual property for Tekmira’s lipid nanoparticle (LNP) technology. The future milestones are broken into a $5 million payment for ALN-TTR02 entering a pivotal trial, and a $5 million payment related to initiation of clinical trials for ALN-VSP in China. Both are expected in 2013. It is important to note that according to the company’s latest quarterly report, “the contingent obligation [legal fees], if we are successful in the lawsuit, is a minimum of $12.8 million (US$12.5 million).” Further information about the settlement can be found in Tekmira’s press release, here.

In connection with TKMR, PropThink has taken a Long position.