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Isis, Alnylam (Shazam!) Create Regulus

Friday, 7 Sep 2007 | 11:59 AM ET
Leo Regulus
Leo Regulus

Call it a stellar, mythic merger. This morning Isis Pharmaceuticals (named after the goddess in Egyptian mythology) and Alnylam Pharmaceuticals (named after the center star in Orion's belt) announced they're forming a joint venture called Regulus Therapeutics, LLC (named after the brightest star in the constellation Leo). I'm sensing a theme here.

The JV will focus on a new field of drug development known as microRNA. RNA stands for ribonucleic acid. It's a molecule that many scientists and experts believe could hold the key to someday curing a host of diseases and disorders. MicroRNA is, as the name suggests, a small form of it that company officials on a conference call this morning said regulates the expression of one-third of human genes.

Isis Founder, Chairman and CEO Dr. Stanley Crooke said within the next two to three years the JV could produce what he called "explosive developments". You may recall that last year Merck paid more than a billion dollars to buy an RNAi (RNA interference) company called Sirna Therapeutics. The takeout price was double what the stock was trading at just before the deal was announced. Alnylam's stock has been a big beneficiary of that premium and other newsflow. CytRx, another RNAi company, not so much.

For now, Alnylam is putting up $10 million to fund the JV. CEO John Maraganore said it'll cost $15-$20 million to run it for the next couple of years but declined to give any details about who's gonna pay for what beyond the statement in the press release that says, "Isis and Alnylam will share funding of Regulus."

Both CEOs said their plan is for the JV to strike partnerships and alliances with bigger pharmaceutical and biotech companies that could provide cash infusions for all three entities. On low volume, investors in ALNYseem to like the idea. Isis folks are rather ho-hum about it. On the call, Maraganore said, "This is a clear case where one plus one equals five." That's if the stars align.

Questions? Comments? Pharma@cnbc.com

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