Alnylam shares rise on new Japanese partnership

Alnylam Pharmaceuticals Inc. on Thursday signed its second collaborative deal in as many months, sending shares higher.

The Cambridge, Mass.-based company will work with Japanese drug developer Kyowa Hakko Kogyo Co. to develop and market the experimental respiratory drug ALN-RSV01 in Asia. The deal, which will bring in about $15 million upfront and possibly $78 million in the future, comes on the heels of a collaboration potentially worth $1 billion with Japan-based Takeda Pharmaceutical Co.

Shares rose 55 cents, or 2.1 percent, to $26.55 in midday trading. They are up about 68 percent over the last 52 weeks as the company continues to form collaborations to develop its genetic-based therapies.

"Alnylam has consistently delivered on and exceeded every milestone it has set on its goal of advancing RNAi therapeutics in the clinic, while providing large amounts of non-dilutive capital to its shareholders via multiple, validating partnerships," wrote Broadpoint Capital analyst Simos Simeonidis, in a note to investors.

The company's key focus is on RNAi technology, which aims to shut down the protein at the root of disease or condition, in effect "silencing" genes. Researchers Craig Mello and Andrew Fire won the 2006 Nobel Prize for their discovery work on the technology and Wall Street views RNAi-based drugs as potentially market-changing medical science.

ALN-RSV01 is currently in midstage development for respiratory syncytial virus, which can cause severe lower respiratory infections, particularly in infants. Most of Alynlam's pipeline, though, is still in the preclinical phase of development, with potential candidates for liver cancer, Huntington's disease, pandemic flu, and cystic fibrosis, among others.

Alnylam's collaboration with Takeda focuses on treatments for cancer and metabolic diseases. In July 2007, the company signed a similar, non-exclusive, licensing deal with Switzerland-based Roche worth up to $1 billion. Alnylam has also partnered with Carlsbad, Calif.-based Isis Pharmaceuticals to create the joint venture Regulus Therapeutics.

"We continue to be strong believers in both the technology and the company, and consider Alnylam a core holding in biotech," Simeonidis said, reaffirming a "Buy" rating and $38 price target.

The field of competitors working on RNAi technology has widened since Whitehouse Station, N.J.-based Merck & Co. paid $1.1 billion for Sirna Therapeutics in 2006. Furthermore, Nastech Pharmaceutical Inc. recently announced its intention to reorganize the company to focus solely on RNAi technology.

Other companies concentrating on the technology include RXi Pharmaceuticals Corp., which Craig Mello helped found.