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Alnylam, Tekmira Shares Regain Lost Ground Heading into 2013

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This story has been updated to include more recent stock and market capitalization information.

Heading into 2013, shares of the RNAi therapeutics field's two top public companies — Alnylam Pharmaceuticals and Tekmira Pharmaceuticals — continue to recover well in the new year, trading around their 52-week highs after previous drops.

Other publicly traded players looking to develop drugs based off the gene-silencing haven't fared so well. Among the underperformers are Marina Biotech, whose stock is trading around $0.40 a share on the Over-the-Counter markets and has a market cap of $6.55 million as it flirts with bankruptcy (GSN 12/13/2012); and RXi Pharmaceuticals, which had at one time topped $10 a share before it lost its Nasdaq listing to former parent firm Galena Biopharma as part of a spinout last year (GSN 5/10/2012) but whose shares have since fallen to around $0.08 each on the Over-the-Counter markets and has a market cap of $12.38 million.

Meanwhile, Arrowhead Research remains well off its 52-week high of $7.31 as it trades around $2.20, with investors having recently expressed concerns over dilution caused by stock offerings (GSN 8/16/2012). Arrowhead's market cap comes in around $34.42 million.

Both Tekmira and Alnylam have experienced setbacks of their own that took a toll on their stock prices since they began trading in the US, but the firms have recovered in recent months as they advance multiple drugs through the clinic and boast significant cash reserves on hand.

Alnylam Pharmaceuticals, which was trading at $23.66 as of Wednesday morning with a market cap of $1.24 billion, became the first RNAi company to go public in 2006, floating its shares at $6 apiece. As big pharma warmed up to RNAi as a therapeutic modality, Alnylam's stock rose and, by mid-2008, it peaked at nearly $36.

But by the next year, the stock was already on the decline, and it continued a steady fall as questions cropped up about whether RNAi would live up to the hype that surrounded it. Notably, Roche said it was shuttering its in-house RNAi efforts in late 2010 (GSN 11/18/2010) — just three years after paying Alnylam more than $330 million in upfront fees and equity investments to pick up non-exclusive access to its IP. A few months later, Pfizer similarly halted its oligo drug programs (GSN 2/3/2011).

Alnylam was especially hit hard after longtime partner Novartis decided in 2010 against exercising a $100 million option to take additional access to Alnylam's IP and technology suite, instead staying focused on the 31 targets to which it already had rights under a previous deal (GSN 9/30/2010).

All the while, Alnylam struggled to generate strong clinical data from its various drug candidates. For instance, its once-promising respiratory syncytial virus drug ALN-RSV01 recently faltered in phase II testing, failing to meet the study's primary endpoint (GSN 5/31/2012). A second-generation version of that compound, called ALN-RSV02, was shelved earlier after partner Cubist Pharmaceuticals opted against its continued development.

Meanwhile, two other of Alnylam's clinical candidates, the liver cancer drug ALN-VSP and the cholesterol-lowering agent ALN-PCS02, remain in limbo after the firm stopped work on them until they could be partnered out, although the company has yet to find any takers other than Ascletis, which picked up the cancer agent in China.

By mid-2011, Alnylam's stock was trading near its IPO price. But heading into 2012, the company's shares began a turnaround as the company cut nearly a third of its staff to curb costs and streamlined its pipeline to focus on lead programs including a second-generation TTR amyloidosis treatment called ALN-TTR02 (GSN 1/26/2012).

Alnylam shares really took off in August when the company released phase I data on ALN-TTR02 showing that the drug was not only safe and well tolerated, but triggered significant reductions of its target protein, levels of which are tightly linked with disease progression (GSN 8/2/2012).

Importantly, Alnylam is poised to complete phase II testing of ALN-TTR02 soon, and expects to move the drug into phase III testing before the end of the year, putting it closer to having a marketable product than any other RNAi company.

On news of the clinical data, Alnylam's stock jumped to around $20. The firm got another shot in the arm a few months later when it settled its ongoing trade secret misappropriation litigation with Tekmira (GSN 11/15/2012). Since then, its shares have continued to rise, and this month Alnylam took advantage of its improved position to undertake an equity offering expected to net more than $173 million by selling more than 9 million shares at $20.13 each.

Unlike Alnylam, Tekmira entered the public marketplace following a legal battle between its predecessor, Protiva Biotherapeutics, and former parent firm Inex Pharmaceuticals. The companies had been locked in a legal dispute over Protiva's core lipid nanoparticle-based siRNA delivery technology, and eventually merged after publicly traded Inex changed its name to Tekmira (GSN 4/3/2008).

At that time, the company was only traded on the Toronto Stock Exchange, but in late 2010 its shares joined the Nasdaq, debuting at $7. Over the next two years, the stock experienced a significant drop in value as the company faced setbacks in the clinic and the pressures of the Alnylam litigation.

The departures of Roche, which had partnered with Tekmira, and Pfizer from the RNAi scene also took some of the shine off of Tekmira's stock in the eyes of Wall Street. By late 2011, with the legal battle with Alnylam well underway, the company's shares had fallen to around $1.50.

But in 2012, Tekmira began to bounce back. Early that year, it began to look like Tekmira might come out on top of its litigation with Alnylam as the courts hearing the suits handed down decisions favorable to the Canadian company (GSN 1/12/2012).

Around that time, Tekmira also began phase I testing of its Ebola virus drug TKM-Ebola, which is being supported with a US government contract that could be worth up to $140 million, helping to set the company's stock on an upward trajectory.

The settlement of the Alnylam dispute, along with the $65 million payout, proved to give Tekmira's shares a huge boost as the company disclosed that the money would give it the resources to undertake an “aggressive” advancement of its pipeline (GSN 11/15/2012).

As of early Wednesday, Tekmira's stock was selling at around $4.91, with a market cap of around $70 million.