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Cambridge real estate a mirror on the biotech world

Promising new drugs spur demand for space

Alnylam Pharmaceuticals Inc. has obtained a right-of-first-offer option to lease the Genzyme Center building beginning in 2018.Peter Vanderwarker for The Globe/File/Globe Freelance

Want to know which biotechnology companies have big expectations for the new drugs in their labs? Follow the real estate.

Two weeks after the Cambridge biotech Genzyme said it will move out of its 500 Kendall St. headquarters — known as Genzyme Center — when its lease expires in 2018, Alnylam Pharmaceuticals Inc. has negotiated a “right of first offer” on the signature office tower in the heart of Kendall Square’s biotechnology cluster.

The right to potentially occupy the 350,000-square-foot building was part of an agreement Alnylam signed with San Diego-based BioMed Realty Trust Inc., one of the nation’s largest developers of life sciences offices and labs, which owns a block of buildings in Kendall Square.


Under the agreement, disclosed in a regulatory filing last week, Alnylam also will lease 295,000 square feet of offices and labs at 675 West Kendall St., diagonally across from Genzyme Center, starting on May 1, 2018. That space is currently leased to Vertex Pharmaceuticals Inc., which last year moved to a new Boston campus and plans to sublease the Cambridge location to other tenants for the next three years.

Alnylam’s move signals the anticipated expansion of a company that has become a leader in the emerging technology known as RNA interference therapeutics, or RNAi, which fights diseases by silencing genes that cause the unwanted overproduction of proteins in human cells.

Last year, Genzyme, an arm of the French drug maker Sanofi SA, paid $700 million to take a 12 percent stake in Alnylam, with an option to buy as much as 30 percent of the company in the future. The deal also gave Genzyme the ability to tap into Alnylam’s robust pipeline of rare-disease drug candidates based on its RNAi technology. Genzyme plans to move about 950 employees now in Genzyme Center to a new headquarters being built at nearby 50 Binney St.


If all goes as planned, Alnylam, now based a couple of blocks away at 300 Third St., will make the transition from research company to commercial business in the coming years and move up the ranks of area biotechs. That means it will need more space.

“We’re growing by leaps and bounds,” said Alnylam’s chief executive, John Maraganore. “RNAi has turned a corner. Our pipeline is expanding. We’re marching toward an organizational size in the thousands [of employees] over the next five years.”

Alnylam currently has about 300 employees, most at 300 Third St., but it expects to add 50 to 75 more workers by the end of the year. During the next couple of months, the company will move about 75 members of its drug development team into temporary quarters at nearby 101 Main St., where it has taken a short-term lease. It plans to keep its Third Street space even when it moves to Kendall Street in 2018.

While it currently has no drugs on the market, Alnylam expects that to change soon. The company hopes to win commercial approval of its first three drugs by 2020, when it projects it will have 10 others in clinical trials. Depending on its growth trajectory, Maraganore said, the company may need to take space both at 675 West Kendall St. and in the Genzyme Center building.

“We’re committed to staying in Kendall Square,” he said. “To be an innovation-focused biotech company, I can’t imagine being any other place. And in this environment [real estate] is pretty competitive.”


Under the agreement with BioMed Realty Trust, the developer will approach Alnylam if it receives an offer from another potential tenant for Genzyme Center at 500 Kendall St. Alnylam would have to decide at that time whether its growth prospects support leasing the larger space.

Bill Kane, senior vice president of leasing and development for BioMed Realty, said the developer is confident it will have tenants ready to fill the building when Genzyme leaves in 2018.

“Our 500 Kendall building is iconic, and we regularly receive inquiries about space available from companies seeking to be in Kendall Square, including several major biotech companies,” Kane said. “The demand to be in Cambridge continues to be quite strong particularly among life science, technology, and [venture capital firms], and we are seeing these companies, such as Alnylam, grab space — especially lab space — in anticipation of future needs.”

Maraganore said the agreement with BioMed Realty keeps his company’s options open.

“It’s a beautiful building, but it depends on a lot of things,” Maraganore said. “One thing a biotech company has to get right is when to pull the trigger on your commercial organization, when to build up the sales force.

“It’s a Goldilocks thing,” he said. “You don’t want to be too early, you don’t want to be too late. You want to be just right.”

Robert Weisman can be reached at robert.weisman@globe.com. Follow him on Twitter @GlobeRobW.