Alnylam Pharmaceuticals Inc. (ALNY) reported a third-quarter loss of 22 cents per share, below the Zacks Consensus Estimate of 24 cents but wider than the year-ago loss of 7 cents. The higher loss in the quarter is attributable to higher stock based compensation and legal expenses.

Revenues for the quarter came in at $24.2 million as against $25.7 million in the year-ago quarter, down 5.8%. Research and development costs increased 5% to $23.2 million primarily because of increased costs for clinical and pre-clinical programs coupled with increased R&D headcount to support Alnylam’s alliances and development programs.

General and administrative expenses increased 56% to $10.7 million. The increase in general and administrative spend was primarily driven by higher professional service fees in association with business activities, primarily legal activities, coupled with increased stock based compensation expenses.

Alnylam exited the quarter with $453.5 million in cash, cash equivalents and marketable securities and no debt compared to $512.7 million at the end of 2008. We are comfortable with the company’s current cash position, which allays our concern about its cash burn rate. Alnylam expects to end the year with cash, cash equivalents, and marketable securities balance in excess of $430 million.

Alnylam Pharmaceuticals, headquartered in Cambridge, Massachusetts, focuses on developing novel therapeutics based on a biological breakthrough known as RNA (Ribo Nucleic Acid) interference (RNAi). The company has entered into collaborations or deals with big pharmaceutical players like Novartis (NVS), Biogen Idec (BIIB), Roche and Takeda  to further develop and utilize its core technology. The partnerships with major players further validate the potential and viability of the RNAi approach. We believe the company will continue to form new alliances with leading pharmaceutical and biotech companies in future.

Currently, we are Neutral on Alnylam.

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