Last week, Alnylam (Nasdaq: ALNY) announced that it had licensed its patents covering the use of RNAi to Shanghai GenePharma of China. If previous such deals are any guide, investors shouldn't be too impressed.

These RNAi licenses have considerable profit potential, since they can be doled out to multiple companies. Alnylam has granted licenses to around 20 companies that are developing RNAi therapeutics or selling reagents to scientists performing RNAi research.

Unfortunately, these licenses aren't yet bringing in big bucks. Alnylam didn't disclose the financial details of its latest deal, but last year, licenses brought in just $1.4 million (down from the 2006 amount, because Alnylam signed up fewer companies). For a company with $144 million in operating expenses last year, the licenses clearly aren't doing much to lower its cash burn.

At some point, Alnylam's intellectual property might be worth as much as PDL BioPharma's (Nasdaq: PDLI) patent on humanized monoclonal antibodies -- $221 million and growing -- but some of those RNAi therapeutics will have to hit it big before royalty income becomes a sizable portion of Alnylam's revenue.

Until then, the company will have to rely on its partners Roche, Novartis (NYSE: NVS), Biogen Idec (Nasdaq: BIIB), and the U.S. government to fund about a third of its operating expenses, with the rest being funded from its own cash. Fortunately, like most drug companies, Alnylam has a lot of it. It ended last year with more than $455 million and expects to burn through only $65 million this year.

I've been critical of the valuation that investors have put on RNAi technology. While I still think investors are taking a lot of risk, at least Alnylam has plenty of time to get the kinks worked out, even if the funding won't be coming from patent-licensing deals.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Biogen is a pick of the Stock Advisor newsletter. The Fool has a disclosure policy.