Biotech Mailbag: All About Alnylam

This column originally posted on RealMoney.com at 6:59 a.m. EST. For more information about subscribing to RealMoney, please click here.

Pass the stuffing and please, more cranberry sauce! The Thanksgiving Biotech Mailbag is open for business.

Robert C. writes:

"What is your opinion and record of following Alnylam Pharmaceuticals (ALNY Quote)? I am a physician with a research background and although I know that major pitfalls exist of function and approval I cannot see why there is not more interest in this potentially life-changing therapy."

Take your eyes off Alnylam's stock chart for a moment and glance at the company's balance sheet, which will be laden with more than $500 million when the year comes to a close.

That's a very nice cash cushion to have these days. Biotech firms are running out of money right and left, and the equity and debt markets are clamped tight, so for Alnylam to be sitting on several years of cash without any need for additional financing is a good thing indeed.

Kudos to Alnylam's management team -- CEO John Maraganore and President Barry Greene -- for negotiating a string of lucrative partnerships, including deals with Roche, Novartis (NVS Quote) and Takeda, that have helped raise all that money.

Back to the stock chart: Alnylam was trading around $18 on Nov. 24, the day I wrote this Mailbag. The stock hasn't been this low since July 2007, when the company signed the major alliance with Roche.

Blame the lousy market, for starters. The stock is down about 10 points, or 36%, since Sept. 15, the day that Lehman Brothers filed for bankruptcy. Alnylam's cash and its leading role in the race to develop RNA interference (RNAi) drugs is comforting, but that doesn't erase the fact that many investors are still in show-me mode when it comes to this exciting, but yet unproven, technology.

Alnylam's stock price will rebound if the data are positive from the next phase II study of ALN-RSV01, the company's lead drug for the treatment of respiratory syncytial virus, or RSV.

Look for those results in the middle of 2009. This is an important study because it's the first time RSV01 will be used to treat lung transplant patients infected naturally with RSV. [In a previous study, normally healthy subjects were innoculated with RSV and then treated with RSV01.]