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Wednesday, September 20, 2006

Alnylam Inks Major Collaboration with Biogen-Idec

Shares of Alnylam Pharmaceuticals (ALNY) are trading up another 8% at $15.23 in after-hours trading activity, and that is after closing up 3.5% on the day at $14.02. The company has inked a deal with Biogen-Idec (BIIB) to discover and develop therapeutics for the potential treatment of Progressive Multifocal Leukoencephalopathy (PML). If you will recall, PML developments in some Tysabri studies ultimately caused the halting of Tysabri on the market to treat Multiple Sclerosis.

Alnylam and Biogen Idec will initially conduct investigative research into the potential of using RNAi technology to develop therapeutics to treat PML. Under terms of the collaboration, Biogen Idec will fund all research and development activities and Alnylam will receive an upfront payment of $5 million. In addition to this payment, assuming successful development and utilization of any product resulting from the collaboration, Alnylam would receive more than $51 million in milestone payments, and substantial undisclosed royalties and utilization fees.

This comes at great time for Alnylam as the company barely produces any revenues to speak of. This is also on the heels of Alnylam getting a government grant two weeks ago from the federal government to Develop RNAi Therapeutics for Pandemic Flu. ALNY has a $450 million market cap, and only posts $6 million in quarterly revenues derived from research payments and grants.

Jon C. Ogg
September 20, 2006

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