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Alnylam Pharmaceuticals Inc. (ALNY - Analyst Report) recently began an underwritten public offering of shares of its common stock. Alnylam expects to raise around $125 million from the public offering.

Underwriters are expected to have a 30-day option to purchase an additional 15% of the shares sold to cover over-allotments, if any. The company did not provide any details regarding the completion of the offering. The actual size and the terms of the offering are also not known.

The company expects to exit 2012 with a cash balance of around $225 million. We expect the fund from the net proceeds to be utilized in advancing the company’s research and development programs. Earlier this month, Alnylam gave a brief update on its key “Alnylam 5x15” pipeline and partner program for the next two years (2013 and 2014).

Alnylam plans to advance its familial amyloidotic polyneuropathy (FAP) candidate, ALN-TTR02, into phase III studies. We note that the candidate is currently in a phase II study, with results expected in mid-2013. Moreover, the company intends to commence an open-label extension study on the candidate in mid-2013 as a long-term treatment for patients participating in the ongoing phase II study.

Alnylam has plans to complete a phase I study on another candidate ALN-TTRsc, being developed for the treatment of patients suffering from familial amyloidotic cardiomyopathy (FAC). The company plans to move the candidate into a pilot phase II study in late 2013.

The company also plans to expand its ‘Alnylam 5x15’ pipeline with ALN-AT3 and ALN-AS1, which are being developed for the treatment of hemophilia and rare bleeding disorders (RBD) and acute intermittent porphyria (AIP), respectively.

We expect investor focus to remain on Alnylam’s pipeline. We currently have a Neutral recommendation on Alnylam. The stock carries a Zacks Rank #4 (Sell). However, other pharma stocks such as Targacept Inc (TRGT - Snapshot Report) and Peregrine Pharmaceuticals Inc (PPHM - Snapshot Report) carry a Zacks Rank #1 (Strong Buy).

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