(Adds analyst and exec comments, updates shares)
By Saumya Joseph
April 8 (Reuters) - Regeneron Pharmaceuticals Inc said it would invest $800 million in Alnylam Pharmaceuticals Inc to develop treatments for eye and central nervous system diseases using gene-silencing RNA interference (RNAi) technology.
Alnylam, which last year won U.S. approval for the first treatment using the Nobel prize-winning technology, has a host of other such therapies in its pipeline for various genetic, cardio-metabolic, liver and eye and central nervous system (CNS) diseases.
RNAi works by targeting and "silencing" specific genetic material, blocking the production of deadly proteins that cause diseases.
Regeneron will make a $400 million upfront payment to Alnylam and also purchase 4.44 million of Alnylam common shares at $90 per share. The investment represents about 4 percent stake in Alnylam, according to data from Refinitiv.
Alnylam's shares fell 0.8 percent to $92.03 in mid-morning trade, while Regeneron was down nearly 3 percent at $397.22.
"The alliance structure enables Alnylam to continue to build its industry-leading pipeline of RNAi therapeutics while retaining significant product rights," Alnylam Chief Executive Officer John Maraganore said in a statement.
Regeneron, the maker of top-selling eye drug, Eylea, will lead development and commercialization for all programs targeting eye diseases.
"(The deal) is important as Regeneron lacks a deep pipeline and Eylea is facing tangible threats," Cowen and Co analyst Yaron Werber said.
SVB Leerink's Geoffrey Porges expects Regeneron investors to be cautious about the deal until the first one or two drug candidates are announced and reach the clinic, given the hefty upfront payment.
For central nervous system programs, both companies will have the option of selecting drug candidates to participate equally in potential future profits of programs led by the other party.
Guggenheim analyst Whitney Ijem said the monetization of the CNS platform was a positive for Alnylam and provides further validation of its platform.
The collaboration also includes a select number of RNAi therapeutic programs designed to target genes expressed in the liver, which can influence a wide variety of diseases throughout the body, the companies said.
"This deal could be a source of long-term growth for both companies. This gives Regeneron the option to have RNAi technology and Alnylam a strong partner that can help them identify new targets," Jefferies analyst Maury Raycroft told Reuters.
Alnylam is eligible to receive up to an additional $200 million in milestone payments upon achievement of certain criteria during early clinical development for the programs.
Separately, Alnylam said it concluded its five-year gene-silencing drug research and option agreement with Sanofi SA . (Reporting by Saumya Sibi Joseph in Bengaluru; Editing by Maju Samuel)