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Tickers in this Article: SNY, AZN, ISIS, GSK, ALNY, BIIB, RGLS
Isis Pharmaceuticals, Inc. (ISIS) recently announced that it has invested $3 million in biopharma company Regulus Therapeutics Inc.'s (RGLS) common stock at the latter's initial public offering. Isis Pharma currently holds approximately 18% (7 million shares) of Regulus' common stock on a fully diluted basis.

Regulus, founded by Alnylam Pharmaceuticals (ALNY) and Isis Pharma, announced the pricing of its initial public offering earlier this month. Regulus offered 11.25 million shares of its common stock at $4.00 per share. Regulus started trading on NASDAQ from October 4, 2012.

We note that apart from Isis Pharma, AstraZeneca (AZN) has purchased 6.25 million shares of Regulus at the initial public offer price. In August 2012, Regulus had filed a registration statement with the US Securities and Exchange Commission (SEC) regarding the initial public offering of its shares.

In the filing, Regulus indicated that Sanofi (SNY) and GlaxoSmithKline (GSK) have shown an interest in buying Regulus's common stock, worth up to $10 million and $2 million, respectively, 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 companies carry a short-term Zacks #3 Rank (Hold rating).

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