West Coast Editor

Alnylam Pharmaceuticals Inc. priced its public offering of about 5.1 million shares at $13 each, raising $66.3 million, with an option for underwriters to buy up to 767,394 more shares to cover overallotments, if any.

The company's stock (NASDAQ:ALNY) closed Wednesday at $12.75, down 69 cents.

Unable to comment on the financing because of the SEC-imposed quiet period, Cambridge, Mass-based Alnylam disclosed in the prospectus related to the offering that it expects to net about $62.3 million, after underwriting discounts, commissions and estimated expenses.

Those proceeds will be used for "general corporate purposes, including research and development expenses, clinical trial costs, general and administrative expenses and potential acquisitions of companies, products and technologies," according to the prospectus.

The company has multiple programs in its pipeline, all early in research except for a compound against respiratory syncytial virus, which has reached the Phase I stage.

Considered a leader in RNA interference, Alnylam most recently made news late last month with the U.S. Patent and Trademark Office's allowance of a second patent application that "broadly covers methods for preparing small interfering RNAs (siRNAs), the molecules that mediate RNAi." Specifically, the patent involved is part of the Tuschl II patent series.

About a week earlier, Alnylam said the USPTO had issued a notice of allowance on a related set of claims in the Tuschl II series, exclusively licensed worldwide to Alnylam for RNAi therapeutics through an agreement with Garching Innovation GmbH, the licensing agent for the Max Planck Society in Germany.

The newly allowed claims provide further coverage of methods of making siRNAs to achieve RNAi in mammalian cells.

In June, Alnylam amended its deal with Garching, and reinforced Alnylam's continued exclusivity for Tuschl II, while improving the operating flexibility for the company's subsidiary, Alnylam Europe AG.

The research behind the Tuschl II series is by one of Alnylam's founders, Thomas Tuschl, and the firm is seeking patents to solidify its position among other companies working in RNAi, such as CytRx Corp., of Los Angeles, which earlier this week spun its RNAi assets into a new subsidiary, to be named soon. (See BioWorld Today, Jan. 31, 2006.)

Another player in RNAi is San Francisco-based Sirna Therapeutics Inc., which reported, also in January, that the USPTO had granted a patent for the chemical synthesis and manufacturing of ribonucleic acids.

Sirna's patent "broadly covers a process for the synthesis, deprotection and purification of nucleic acids with one or more ribonucleotides," a process "critical for the efficient synthesis of RNA at high yields and high purity and is applicable to both small- and large-scale production of oligonucleotides such as [small interfering] RNAs and aptamers."

The patent "further expands Sirna's leadership position in the area of synthesis and manufacturing of [Good Manufacturing Practices]-quality RNA, which is required for both chemically modified and unmodified siRNA-based therapeutics," the company said.

In the Alnylam financing, Morgan Stanley & Co., of New York, is acting as the sole book runner, with Banc of America Securities LLC, also of New York, serving as co-lead manager. Co-managers are Piper Jaffray & Co., of Minneapolis, along with SG Cowen & Co. LLC and Rodman & Renshaw LLC, both of New York.

Following the offering, Alnylam has about 31.8 million shares outstanding.

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