Jason Rhodes

Evolution is often hastened by cataclysmic events, whether a meteor strike or an ice age. The equivalent here is the economic crisis combined with a very challenging regulatory environment, where the hurdle for products is very high. At the same time, the need for innovation has never been greater. Big Pharma has had to evolve beyond the small-molecule platform. The three new megamergers are a response to all of that.

It's an even more Darwinian period for the biotech industry. But I think most of the companies that have compelling technology and intellectual property will make it through. And on the other side, there will probably be somewhat less capital, but that capital will probably be focused on a smaller set of stronger companies.

The absence of capital may have lowered the prices of biotechs somewhat, but it's not like pharma is on some kind of shopping spree. They aren't buying things that they wouldn't have bought otherwise. They're very disciplined. They recognize that moving into a non–small molecule world is a long game, and they're asking what kinds of companies can we work with in order to position ourselves to be a winner.

The days when pharma just came in and paid a biotech to give up its program are gone. The smart biotechs and pharmas realize that they need each other, and there's a very positive, mutually beneficial overlap around mid-stage development—as opposed to arm's length transactions.

At Alnylam, we think hard about how we monetize the value of our intellectual property and platforms, while retaining the opportunity to develop our own pipeline. We generally do large, non-exclusive platform partnerships or license out our products as they enter the clinic. Both involve up-front and milestone payments, and often shared royalties.

It's program funding that's highly rational and recognizes where relative skills lie. That's really the future, where companies learn to work together in long term collaborations.