Alnylam Pharmaceuticals Reports Third Quarter 2009 Financial Results

http://www.businesswire.com/news/home/20091104006385/en

- Advances Pipeline of RNAi Therapeutics with Phase II Results for ALN-RSV01,
Continued Enrollment of ALN-VSP for Liver Cancer, and On Track to File IND for
ALN-TTR for TTR-Mediated Amyloidosis -

- Demonstrates Continued Strength of Partnerships, Including Year Five Extension
with Novartis and Advanced Collaboration with Roche -

- Provides New Guidance to Initiate Phase IIb Trial of ALN-RSV01 in Lung
Transplant Patients and Updates Business Development Goal and Financial Guidance
for 2009 -

- Ends Quarter with Approximately $453 Million in Cash -
CAMBRIDGE, Mass.--(Business Wire)--
Alnylam Pharmaceuticals, Inc. (Nasdaq: ALNY), a leading RNAi therapeutics
company, today reported its consolidated financial results for the third quarter
ended September 30, 2009 and company highlights.

"Activities this quarter reflect the substantial progress we are making as we
continue to lead the industry`s efforts in the discovery and development of RNAi
therapeutics," said John Maraganore, Ph.D., Chief Executive Officer of Alnylam.
"We are advancing our clinical pipeline and are on track with our goal to have
three clinical-stage programs by the end of the year, with our planned IND
filing for our ALN-TTR program. We are also very pleased to announce today that
Alnylam plans to advance ALN-RSV01 into a Phase IIb trial in adult lung
transplant patients for the treatment of respiratory syncytial virus (RSV). This
study is aimed to repeat and extend the results we saw in this patient
population with our recently reported Phase II study. At the same time and
together with Cubist, we will be advancing our second-generation RNAi
therapeutic, ALN-RSV02, into the pediatric RSV infection setting. Further, we
are making excellent continued progress with our liver cancer Phase I study,
having now enrolled a significant portion of the study across many dose cohorts.
All told, our R&D progress this past period demonstrates our commitment and
passion in advancing RNAi therapeutics, an innovative new class of medicines, to
patients."

"Over the last several months, we demonstrated the continued strength of our
existing partnerships having advanced our collaboration with Roche to a new
phase, as announced this morning, and having recently initiated the year five
research term in our Novartis alliance. Indeed, Alnylam benefits on many levels
from our current partnerships, where these relationships combined with our
unparalleled patent estate and financial stability, continue to place Alnylam in
a strong and unique position to build a leading biopharmaceutical company
founded on RNAi," said Barry Greene, President and Chief Operating Officer of
Alnylam. "There also remains significant interest across the industry for new
partnerships on RNAi therapeutics based on Alnylam`s capabilities, technology,
and intellectual property. Regarding our goal of two or more new major
partnerships in 2009, we will remain focused on completing the right alliances
with the right partners. While multiple discussions remain ongoing with
potential biotech and pharmaceutical partners, we now believe that the timing
for achievement of this goal could extend beyond year end."

Cash, Cash Equivalents and Marketable Securities

At September 30, 2009, Alnylam had cash, cash equivalents and marketable
securities of $453.5 million, compared to $512.7 million at December 31, 2008.

Net Loss

The net loss according to accounting principles generally accepted in the U.S.
(GAAP) for the third quarter of 2009 was $9.2 million, or $0.22 per share on
both a basic and diluted basis (including $5.2 million, or $0.13 per share of
non-cash stock-based compensation expense), as compared to net loss of $2.9
million, or $0.07 per share on both a basic and diluted basis (including $4.6
million, or $0.11 per share of non-cash stock-based compensation expense), for
the quarter ended September 30, 2008.

Revenues

Revenues were $24.2 million for the third quarter of 2009, as compared to $25.7
million for the same period last year. Revenues for the third quarter of 2009
included $13.8 million of collaboration revenues related to the company`s
alliance with Roche, $5.4 million of revenues from the company`s alliance with
Takeda Pharmaceutical Company Limited, and $5.0 million of expense reimbursement
and amortization revenues from Novartis, the National Institutes of Health
(NIH), Cubist Pharmaceuticals, Inc., Biogen Idec Inc., InterfeRx, research
reagent and services licensees, and other sources.

Research and Development Expenses

Research and development (R&D) expenses were $23.2 million in the third quarter
of 2009, including $3.1 million of non-cash stock-based compensation, as
compared to $22.1 million in the third quarter of 2008, which included $2.9
million of non-cash stock-based compensation. The increase in R&D expenses in
the third quarter of 2009 as compared to the prior year period was primarily due
to higher expenses related to the company`s ALN-TTR pre-clinical program as well
as the company`s ALN-VSP clinical trial. In addition, compensation and related
expenses and facilities-related expenses increased during the third quarter of
2009 due to additional R&D headcount to support the company`s alliances and
product pipeline progress.

General and Administrative Expenses

General and administrative (G&A) expenses were $10.7 million in the third
quarter of 2009, including $2.1 million of non-cash stock-based compensation, as
compared to $6.9 million in the third quarter of 2008, which included $1.7
million of non-cash stock-based compensation. The increase in G&A expenses
during the third quarter of 2009 as compared to the prior year period was due
primarily to higher professional service fees in association with business
activities, primarily legal activities, and higher non-cash stock-based
compensation.

Regulus Therapeutics

Alnylam incurred $1.1 million and $2.2 million equity in loss of joint venture
for the third quarter of 2009 and 2008, respectively. This was related to the
company`s share of the net losses incurred by Regulus Therapeutics Inc., which
was formed in September 2007 and is focused on the discovery, development, and
commercialization of microRNA-based therapeutics. Through December 31, 2008, the
company was recognizing the first $10.0 million of losses of Regulus as equity
in loss of joint venture in the condensed consolidated statements of operations
because the company was responsible for funding those losses through its initial
$10.0 million cash contribution. Beginning in January 2009, in connection with
the conversion of Regulus to a C corporation, the company is recognizing
approximately 49% of the income and losses of Regulus.

Interest Income

Interest income was $1.0 million for the third quarter of 2009, as compared to
$3.5 million for the third quarter of 2008. The decrease in interest income was
primarily due to significantly lower average interest rates.

Interest Expense

Interest expense was zero for the third quarter of 2009, as compared to $0.2
million for the third quarter of 2008. Interest expense in the third quarter of
2008 was related to borrowings under the company`s lines of credit used to
finance capital equipment purchases. In December 2008, the company repaid the
aggregate outstanding balance under its existing credit lines.

Income Tax Benefit

Income tax benefit, primarily as a result of increased legal activities in 2009,
was $0.6 million for the third quarter of 2009, as compared to a $0.8 million
benefit recorded for the third quarter of 2008.

2009 Financial Guidance

Alnylam is continuing to provide guidance with respect to its cash, cash
equivalents, and marketable securities balance, which it now expects will be
greater than $430 million at December 31, 2009.

"We continue to have a leading net cash position across the biotechnology
industry, ending the quarter with over $453 million in cash with zero debt,"
said Patricia Allen, Vice President, Finance and Treasurer of Alnylam. "This
very strong financial position continues to allow us to invest in our scientific
platform and multiple RNAi therapeutic pipeline programs, and we now expect that
our cash position at the end of the year will be greater than $430 million."

Third Quarter 2009 and Recent Corporate Highlights

Product Pipeline and Scientific Leadership Highlights

* Advanced Development of ALN-RSV Program for the Treatment of RSV Infection.

* Alnylam and Cubist presented complete data from a Phase II randomized,
double-blind study of inhaled ALN-RSV01 or placebo in RSV-infected lung
transplant patients. This study achieved its primary objective of demonstrating
the safety and tolerability of ALN-RSV01. In addition, while the study was not
powered for effects on viral or clinical endpoints and results should be
considered exploratory due to the small sample size, ALN-RSV01 treatment was
associated with improved recovery of lung function (forced expiratory volume in
the first second, or FEV1) and a statistically significant reduction in the
incidence of new or progressive bronchiolitis obliterans syndrome (BOS), a
life-threatening complication of RSV infection and an irreversible disease of
the transplanted lung resulting in approximately 50% mortality within three to
five years of onset.
* After evaluating the clinical data for ALN-RSV01, Alnylam and Cubist have
agreed to develop ALN-RSV01 in the adult lung transplant setting in parallel
with the development of a second-generation compound, ALN-RSV02, which will be
focused on the pediatric patient population. Alnylam plans to advance ALN-RSV01
in a new Phase IIb clinical trial in RSV-infected adult lung transplant
patients, and expects to begin enrolling in this study in early 2010. The
objective of this new study is to repeat and extend the clinical results
observed in the original Phase II study. Alnylam will fund the continued
advancement of ALN-RSV01, and Cubist will retain an opt-in right for the product
in the adult transplant indication. Cubist will take the lead in advancing
ALN-RSV02 in the pediatric setting in continued collaboration and 50-50 funding
with Alnylam.
* During the period, Alnylam and Cubist also completed additional Phase I
studies with ALN-RSV01 in healthy adult volunteers, exploring different dose
regimens.
* The ALN-RSV program is partnered with Kyowa Hakko Kirin Co., Ltd. in Asia, and
Cubist worldwide except Asia.

* Continued Development of ALN-VSP for Liver Cancers. Alnylam continues to
enroll patients in a Phase I multi-center, open label, dose escalation trial to
evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of
ALN-VSP in patients with advanced solid tumors with liver involvement, including
hepatocellular carcinoma (HCC). A significant number of patients have been
enrolled across multiple dose cohorts, and Alnylam expects to present
preliminary data from the Phase I trial in mid-2010. This is the company`s first
systemic RNAi program, and represents Alnylam`s first clinical program in an
oncology indication.
* Advanced ALN-TTR for Transthyretin (TTR)-Mediated Amyloidosis (ATTR) Toward
the Clinic. The company is on track to file regulatory applications for its
ALN-TTR program by the end of this year, with the goal of initiating the Phase I
trial in early 2010. ALN-TTR is a systemically delivered RNAi therapeutic
targeting the TTR gene for the treatment of TTR-mediated amyloidosis.
Pre-clinical data with ALN-TTR have demonstrated potent silencing of both the
normal and mutated TTR gene in rodent and non-human primate studies. Further,
pre-clinical studies recently presented at The Liver Meeting® demonstrated the
ability of a single dose of ALN-TTR to silence TTR mRNA levels for a period of
several weeks.
* Presented New Pre-Clinical Data from ALN-HTT for Huntington`s Disease. Alnylam
and Medtronic, Inc. presented new pre-clinical research findings from their
Huntington`s disease program at the 2009 World Congress on Huntington`s Disease
held September 12-15, 2009 in Vancouver, British Columbia. In these advanced
pre-clinical studies, therapeutic silencing of the disease-causing huntingtin
gene was demonstrated in a manner supportive of scaled effects for the human
brain, and continued infusion over approximately one month of ALN-HTT in the
central nervous system (CNS) was found to be well tolerated.

* Continued to Advance Platform for Delivery of RNAi Therapeutics. Tekmira
Pharmaceuticals Corp. and Alnylam are participating in a new research
collaboration formed with scientists at The University of British Columbia and
AlCana Technologies, Inc., focused on the discovery of novel cationic lipids and
lipid nanoparticles for the systemic delivery of RNAi therapeutics.
* Participation in Major Cardiovascular Research Grant Awarded to University of
Pennsylvania. The University of Pennsylvania was awarded a $2.4 million grant
under the "American Recovery and Reinvestment Act of 2009," which will fund
research over two years in the labs of Daniel Rader, M.D. of the University of
Pennsylvania School of Medicine, and Sekar Kathiresan, M.D. of Massachusetts
General Hospital (MGH) and Harvard Medical School, and at Alnylam. The goal of
the initiative is to mechanistically evaluate the metabolic and molecular
effects of 38 novel genes implicated by human genetic studies in prevention of
cardiovascular disease, and to discover and develop RNAi therapeutics toward
these candidate genes.
* Continued Scientific Leadership. Alnylam continued to demonstrate its
scientific leadership through publication of peer-reviewed research papers that
total 13 thus far in 2009. During the third quarter and the recent period alone,
these include:

* pre-clinical research characterizing the role of chemical modifications and
drug delivery formulations in modifying immunostimulatory properties of
double-stranded RNAs (dsRNAs) (Nguyen et al., Molecular Therapy advance online
publication 7 July 2009. Doi:10.1038/mt.2009.147);
* pre-clinical research demonstrating the silencing of FAPP2 gene results in
increased tumor cell sensitivity to FAS-induced apoptosis (Tritz et al., Biochem
Biophys Res Commun. 2009 May 29;383(2):167-71. Epub 2009 Mar 31);
* pre-clinical research demonstrating a role for miR-196 in patterning the chick
axial skeleton through Hox gene regulation (McGlinn et al., Proc Natl Acad Sci
USA. 2009 Oct. 21);
* pre-clinical research demonstrating antisense inhibition of miR-21 and miR-221
arrests cell cycle, induces apoptosis, and sensitizes the effects of gemcitabine
in pancreatic adenocarcinoma (Park et al., Pancreas 2009 Sep 2); and,
* pre-clinical research demonstrating that the target site of ALN-RSV01 is
highly conserved across clinical isolates of RSV, and that ALN-RSV01 has the
ability to achieve substantially improved anti-viral potency with multi-dose
administration (Alvarez et al., Antimicrob Agents Chemother. 2009
Sep;53(9):3952-62 Epub 2009 Jun 8).

The company believes that it is on track to meet its scientific publication goal
of 15 or more peer-reviewed papers in 2009.

In addition, Alnylam presented data from its clinical and pre-clinical programs
at the following scientific meetings:

* BIT Life Sciences` 2nd Annual World Summit of Antivirals held on July 18-25,
2009 in Beijing, China;
* American Chemical Society (ACS) Fall 2009 National Meeting & Exposition held
on August 16-20, 2009 in Washington D.C.;
* European Molecular Biology Organization (EMBO) Meeting 2009 held on August
29-September 1, 2009 in Amsterdam;
* 2009 World Congress on Huntington`s Disease held on September 12-15, 2009 in
Vancouver, British Columbia;
* Interscience Conference on Antimicrobial Agents and Chemotherapy (ICAAC) held
on September 12-15, 2009 in San Francisco;
* Society for Neuroscience 2009 Meeting held on October 17-21, 2009 in Chicago;
and,
* American Association for the Study of Liver Diseases (AASLD) held on October
30-November 3, 2009 in Boston.

Business Execution Highlights

* Advanced RNAi Therapeutic Collaboration Phase of Landmark 2007 Alliance with
Roche. Alnylam announced today that Roche and Alnylam will jointly collaborate
on the discovery and development of certain RNAi therapeutic products and each
will contribute key delivery technologies in the effort which is focused on
specific disease targets. New delivery technologies include Alnylam lipid
nanoparticles and Roche Madison dynamic polyconjugate delivery technologies, and
also can include additional delivery technologies such as SNALP technology from
Tekmira. Alnylam and Roche will co-develop and co-commercialize RNAi therapeutic
products in the U.S. market and Alnylam is eligible to receive additional
milestone and royalty payments for products developed in the rest of world.
* Extended Novartis Collaboration for Fifth and Final Planned Year. Novartis
elected to extend the company`s RNAi therapeutics collaboration for a fifth and
final planned year, through October 2010, resulting in continued R&D funding to
Alnylam.
* Updated Guidance on 2009 Business Development Goal. Alnylam announced today
revised guidance regarding its 2009 goal of two or more new major alliances.
While discussions remain ongoing regarding new business partnerships, the
company now believes that the timing for completion of such new major alliances
could extend beyond the 2009 calendar year.
* Granted KOKEN License to Kreutzer-Limmer Patents for the RNAi Research
Products Market. Alnylam has granted KOKEN Co., Ltd. a non-exclusive worldwide
license to manufacture and provide RNAi research products and services under the
Kreutzer-Limmer patent family. KOKEN is now Alnylam`s 17th research reagent
licensee.

Intellectual Property (IP) Highlights

* Joined GlaxoSmithKline (GSK) in Donating IP to Patent Pool for Neglected
Tropical Diseases. Alnylam is donating its RNAi IP, technology, and know-how to
the patent pool established by GSK earlier this year. Alnylam`s patent estate,
which includes more than 1500 patents and patent applications, will be provided
on a royalty-free, non-profit basis to qualified third parties who want to
conduct research on new treatments for neglected tropical diseases (NTDs), as
defined by the Food and Drug Administration (FDA). The patent pool was formed by
GSK to aid in the discovery and development of new medicines for the treatment
of NTDs in the world`s least developed countries.
* European Patent Office Granted Kreutzer-Limmer III Patent. The European Patent
Office (EPO) issued a notification of intent to grant for a patent in the
Kreutzer-Limmer III patent series (EP1349927). The new patent includes 22 claims
covering methods and medicaments for use of an RNAi therapeutic in oncology
applications.
* Kreutzer-Limmer II Patent Upheld in European Opposition Proceedings. The EPO
upheld the Kreutzer-Limmer II `061 (EP1352061) patent in oral proceedings held
before the European Opposition Board. The `061 patent is the first to be granted
in Europe from the Kreutzer-Limmer II patent family, and includes broad claims
covering methods of silencing approximately 130 disease genes with small
interfering RNAs (siRNAs), the molecules that mediate RNAi.
* First microRNA Patent Grant in Japan from Tuschl III Patent Series. Alnylam,
Isis, and Regulus announced that the Japanese Patent Office (JPO) has notified
the Max Planck Society of its intent to grant a patent from the Tuschl III
patent series (JP Application Number 2003-532675). This patent series pertains
to the discovery of over 120 novel mammalian microRNAs, including miR-122, which
is a leading pre-clinical program at Regulus.

* Received Notice of Allowance for Key New Fundamental Patents Covering microRNA
Therapeutics.

* Alnylam and Regulus were notified that the USPTO has awarded a notice of
allowance for the Manoharan patent (US 7,582,744), which covers antagomirs, a
chemical class of anti-miRs, oligonucleotide inhibitors of microRNAs.
* Alnylam, Regulus, and Isis received notification that the USPTO allowed a
patent application within the Esau patent family (Application No. 10/909,125),
which covers methods of inhibiting miR-122, a liver-specific microRNA that has
been shown to facilitate replication of hepatitis C virus (HCV) infection.

* USPTO Allows Patent Under Isis` Crooke Patent Estate. The USPTO has allowed an
Isis patent application (Application No. 10/281,349) that further expands the
scope of the Crooke patent estate. The newly allowed patent broadly covers
methods of cleaving a target RNA via a double-stranded ribonuclease mechanism,
including the RNAi mechanism, with chemically modified single-stranded
RNA-containing drugs such as those under development by Isis and Alnylam in
their single-stranded RNAi (ssRNAi) research collaboration.
* Additional New Patents Issued or Granted. Alnylam announced today the issuance
or grant of the following new patents owned, controlled, or licensed by Alnylam
in the RNAi therapeutics field:

* the Stoffel patent, which is non-exclusively licensed to Regulus Therapeutics,
was issued by the USPTO (7,585,969) and covers isolated DNA or RNA molecules
having the nucleobase sequence of miR-375, or the nucleobase sequence of a
miR-375 precursor, with or without a variety of chemical modifications; and,
* a new target-related patent was allowed by the USPTO (Application No.
11/944,961).

The company has obtained greater than 35 new patent grants thus far in 2009,
exceeding its goal of greater than 15 new patent grants in 2009.

Organizational Highlights

* Selected as Technology Fast 500 Award Winner by Deloitte. Alnylam was ranked
number 80 in the Deloitte Technology Fast 500, an award that recognizes 500 of
the fastest growing technology, media, telecommunications, life sciences, and
clean technology companies in North America based on percentage of fiscal year
revenue growth over five years.
* Departure of Chief Scientific Officer at Alnylam. John A. Schmidt, Jr., M.D.,
former Alnylam Chief Scientific Officer, left the company to pursue other
interests.
* Regulus Therapeutics Expands Management Team. Regulus Therapeutics appointed
Hubert C. Chen, M.D., Vice President of Translational Medicine.
* Director Not to Stand for Re-election in 2010. Edward Scolnick, M.D., will not
stand for re-election as a Director at the company`s 2010 annual meeting. Dr.
Scolnick will focus his activities on his scientific research at the Broad
Institute.

"I am grateful for the time I have spent as a Director at Alnylam and have a
great deal of respect for the science taking place there," said Dr. Edward
Scolnick, Director of the Psychiatric Disease Program and the Stanley Center for
Psychiatric Research at the Broad Institute. "I admire Alnylam`s commitment to
develop a platform for novel medicines, and I remain excited about the potential
for RNAi therapeutics."

"We are saddened by Ed`s decision to not stand for re-election next year,
although we understand and greatly admire his commitment to his scientific
research studies. Certainly, we will miss his valuable expertise and insight,"
said John Maraganore. "By all accounts, we wish him all the very best in his
future endeavors."

Conference Call Information

Management will provide an update on the company, discuss third quarter 2009
results, and discuss expectations for the future via conference call on November
4, 2009 at 4:30 p.m. ET. To access the call, please dial 866-272-9941 (domestic)
or 617-213-8895 (international) five minutes prior to the start time and provide
the passcode 91604033. A replay of the call will be available beginning at 7:30
p.m. ET on November 4, 2009. To access the replay, please dial 888-286-8010
(domestic) or 617-801-6888 (international), and provide the passcode 19524571.

A live audio webcast of the call will also be available on the "Investors"
section of the company`s website, www.alnylam.com. An archived webcast will be
available on the Alnylam website approximately two hours after the event.

About RNA Interference (RNAi)

RNAi (RNA interference) is a revolution in biology, representing a breakthrough
in understanding how genes are turned on and off in cells, and a completely new
approach to drug discovery and development. Its discovery has been heralded as
"a major scientific breakthrough that happens once every decade or so," and
represents one of the most promising and rapidly advancing frontiers in biology
and drug discovery today which was awarded the 2006 Nobel Prize for Physiology
or Medicine. RNAi is a natural process of gene silencing that occurs in
organisms ranging from plants to mammals. By harnessing the natural biological
process of RNAi occurring in our cells, the creation of a major new class of
medicines, known as RNAi therapeutics, is on the horizon. RNAi therapeutics
target the cause of diseases by potently silencing specific messenger RNAs
(mRNAs), thereby preventing disease-causing proteins from being made. RNAi
therapeutics have the potential to treat disease and help patients in a
fundamentally new way.

About Alnylam Pharmaceuticals

Alnylam is a biopharmaceutical company developing novel therapeutics based on
RNA interference, or RNAi. The company is applying its therapeutic expertise in
RNAi to address significant medical needs, many of which cannot effectively be
addressed with small molecules or antibodies, the current major classes of
drugs. Alnylam is leading the translation of RNAi as a new class of innovative
medicines with peer-reviewed research efforts published in the world`s top
scientific journals including Nature, Nature Medicine, and Cell. The company is
leveraging these capabilities to build a broad pipeline of RNAi therapeutics;
its most advanced program is in Phase II human clinical trials for the treatment
of respiratory syncytial virus (RSV) infection and is partnered with Cubist and
Kyowa Hakko Kirin. In addition, the company is developing RNAi therapeutics for
the treatment of a wide range of disease areas, including liver cancers,
hypercholesterolemia, Huntington`s disease, and TTR amyloidosis. The company`s
leadership position in fundamental patents, technology, and know-how relating to
RNAi has enabled it to form major alliances with leading companies including
Medtronic, Novartis, Biogen Idec, Roche, Takeda, Kyowa Hakko Kirin, and Cubist.
To reflect its outlook for key scientific, clinical, and business initiatives,
Alnylam established "RNAi 2010" in January 2008 which includes the company`s
plan to significantly expand the scope of delivery solutions for RNAi
therapeutics, have four or more programs in clinical development, and to form
four or more new major business collaborations, all by the end of 2010. Alnylam
is a joint owner of Regulus, a company focused on the discovery, development,
and commercialization of microRNA-based therapeutics. Founded in 2002, Alnylam
maintains headquarters in Cambridge, Massachusetts. For more information, please
visit www.alnylam.com.

AlnylamForward-Looking Statements

Various statements in this release concerning Alnylam`s future expectations,
plans and prospects, including without limitation, its expectations with respect
to the timing and success of its research, clinical and pre-clinical trials and
regulatory filings, including the ability to invest significantly in its
pipeline and delivery technology, its cash position at the end of 2009, as well
its expectations regarding clinical trials, business execution, intellectual
property matters and legal activities, constitute forward-looking statements for
the purposes of the safe harbor provisions under The Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from those
indicated by these forward-looking statements as a result of various important
factors, including risks related to: Alnylam`s approach to discover and develop
novel drugs, which is unproven and may never lead to marketable products; the
pre-clinical and clinical results for its product candidates, which may not
support further development of product candidates; obtaining, maintaining and
protecting intellectual property; Alnylam`s ability to enforce its patents
against infringers and to defend its patent portfolio against challenges from
third parties; Alnylam`s ability to obtain additional funding to support its
business activities; Alnylam`s dependence on third parties for the development,
manufacture, marketing, sale and distribution of products; obtaining regulatory
approval for products; competition from others using technology similar to
Alnylam`s and others developing products for similar uses; Alnylam`s dependence
on current and future collaborators; and Alnylam`s short operating history; as
well as those risks more fully discussed in the "Risk Factors" section of its
most recent quarterly report on Form 10-Q on file with the Securities and
Exchange Commission. In addition, any forward-looking statements represent
Alnylam`s views only as of today and should not be relied upon as representing
its views as of any subsequent date. Alnylam does not assume any obligation to
update any forward-looking statements.

Alnylam Pharmaceuticals, Inc.

Unaudited Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008

Net revenues from research collaborators $ 24,249 $ 25,734 $ 73,907 $ 71,759

Operating expenses:
Research and development (1) 23,219 22,105 87,155 71,940
General and administrative (1) 10,680 6,863 26,794 19,841
Total operating expenses 33,899 28,968 113,949 91,781
Loss from operations (9,650 ) (3,234 ) (40,042 ) (20,022 )
Other income (expense):
Equity in loss of joint venture (Regulus Therapeutics Inc.) (1,136 ) (2,181 ) (3,422 ) (5,415 )
Interest income 1,036 3,486 4,542 11,735
Interest expense - (176 ) - (616 )
Other (expense) income (10 ) (1,546 ) 144 (1,876 )
Total other income (expense) (110 ) (417 ) 1,264 3,828
Loss before income taxes (9,760 ) (3,651 ) (38,778 ) (16,194 )
Benefit from (provision for) income taxes 552 793 (1,021 ) (663 )
Net loss $ (9,208 ) $ (2,858 ) $ (39,799 ) $ (16,857 )

Net loss per common share - basic and diluted $ (0.22 ) $ (0.07 ) $ (0.96 ) $ (0.41 )

Weighted average common shares used to compute basic and diluted net loss per common share 41,708 41,197 41,543 40,948

(1) Non-cash stock-based compensation expenses included in operating expenses are as follows:
Research and development $ 3,128 $ 2,908 $ 9,410 $ 8,079
General and administrative 2,110 1,741 6,377 4,938

Alnylam Pharmaceuticals, Inc.
Unaudited Condensed Consolidated Balance Sheets
(In thousands, except share amounts)

September 30, December 31,
2009 2008
Cash, cash equivalents and total marketable securities $ 453,477 $ 512,709
Collaboration receivables 5,022 4,188
Prepaid expenses and other current assets 5,173 4,674
Total restricted cash - 6,151
Property and equipment, net 18,152 19,194
Intangible assets, net 665 795
Deferred tax assets 5,312 5,382
Investment in joint venture (Regulus Therapeutics Inc.) 7,867 1,583
Total assets $ 495,668 $ 554,676
Income taxes payable $ 1,057 $ 6,111
Accounts payable and accrued expenses 16,807 11,916
Total deferred revenue 292,097 329,985
Total deferred rent 3,479 4,293
Other long-term liabilities 207 246
Total stockholders` equity (41.8 million and 41.4 million common shares issued and outstanding at September 30, 2009 and December 31, 2008, respectively) 182,021 202,125
Total liabilities and stockholders' equity $ 495,668 $ 554,676

This selected financial information should be read in conjunction with the
consolidated financial statements and notes thereto included in Alnylam`s Annual
Report on Form 10-K which includes the audited financial statements for the year
ended December 31, 2008.

Alnylam Pharmaceuticals, Inc.
Cynthia Clayton, 617-551-8207
Director, Investor Relations
and Corporate Communications
or
Patricia Allen, 617-551-8362
Vice President, Finance and Treasurer

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