Alnylam-ISIS Venture Prices IPO - Analyst Blog

By Zacks | October 05, 2012 AAA

Regulus Therapeutics Inc., founded by Alnylam Pharmaceuticals (ALNY) and Isis Pharmaceuticals, Inc. (ISIS), recently announced the pricing of its initial public offering. The company offered 11.3 million of its common stock at $4.00 per share. In order to cover over allotments, the underwriters have been granted a 30-day option by Regulus to buy another 1.7 million shares at initial public offering price.

In August this year, Regulus announced the filing of a registration statement with the US Securities and Exchange Commission (SEC) regarding its proposed initial public offering of its shares.

In its filing with the SEC, Regulus indicated that Sanofi (SNY), Isis Pharma and GlaxoSmithKline (GSK) have shown an interest in buying Regulus's common stock worth up to $10 million, $2 million and $2 million, respectively, at the initial public offering price. In a separate private placement, AstraZeneca (AZN) agreed to buy $25.0 million worth of Regulus's common stock at the initial public offering price.

In September 2007, Alnylam and Isis Pharma joined forces to establish Regulus, a company focused on microRNA (mRNA) therapeutics. In October 2010, Sanofi made an equity investment in the company. As of June 30, 2012, Regulus was jointly owned by Alnylam (45%), Isis Pharma (46%) and Sanofi (9%).

Regulus is evaluating microRNA therapeutics in several areas including oncology, fibrosis, hepatitis C virus infection, multiple sclerosis and atherosclerosis. The company has collaborated with several companies including Glaxo, Sanofi, AstraZeneca and Biogen Idec (BIIB) for microRNA therapeutics.

Our Recommendation

Currently, we have a Neutral recommendation on both Isis Pharma and Alnylam. Both stocks carry a Zacks #3 Rank (short-term Hold rating).

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