Cynthia Clayton - Director, IR and Corporate Communications John Maraganore - CEO Akshay Vaishnaw - VP, Clinical Research Patty Allen - VP, Finance and Treasurer Barry Greene - President and COO

Analyst for Sapna Srivastava - Morgan Stanley Simos Simeonidis - Rodman & Renshaw Pamela Bassett - Cantor Fitzgerald Stephen Willey - Thomas Weisel Partners Alan Carr - Needham & Company

Good afternoon. I’m Cynthia Clayton, Director of Investor Relations and Corporate Communications.

With me today from Alnylam are John Maraganore, our Chief Executive Officer; Barry Greene, our President and Chief Operating Officer; Akshay Vaishnaw, Vice President of Clinical Research; and Patty Allen, Vice President of Finance and Treasurer. During today's call, John will go over the highlights of the quarter, Akshay will provide an R&D summary, Patty will review our financials and guidance, Barry will summarize our business highlights and our progress against goals, and we will then open the call for your questions.

In interest of allowing more time for Q&A we are aiming to keep our prepared remarks for as short as possible and we will not be going through all the accomplishments we achieved in 2008 and early 2009 but rather focus on the highlights To this end, we encourage you to read our press release for additional detail. Before we begin, I would like to remind you that this call will contain certain remarks concerning Alnylam's future expectations, plans and prospects, which constitute forward-looking statements for the purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our most recent quarterly or annual report on file with the SEC. In addition, any forward-looking statements represent our views only as of the date of this recording and should not be relied upon as representing our views as of any subsequent date.

We specifically disclaim any obligation to update any such statements. I will now turn the call over to John.

Thank you, Cynthia and let me start by saying I am recovering from a small head cold today so apologize for the some omitted voice. Welcome and thanks everyone for joining us today for our year end 2008 call.

Overall 2008, was yet another period of excellent performance across key value drivers for Alnylam as we significantly advance the science of RNAi therapeutics and achieved our goals on all fronts. Scientific leadership, product pipeline, intellectual property and business execution so far we are also off to a great start in 2009.

Let me begin with some general comments on the current environment and Alnylam position in this context. As all of you know this is simply an a precedent time in our industry where most Biotechs Company is more focus on one and only one thing and that is survival.

While I am more confident that most high quality Companies will survive this period it is nevertheless and extremely difficult time for any Company in need of capital over the next 12 or 24 months. We are extremely fortunate at Alnylam to be a completely different position.

A position focus on growth and execution on our business plan to get upholstered with over half a billion in cash. Indeed, at Alnylam we are in a stronger position than ever both financially and base on Company fundamentals to build a leading biopharmaceutical Company.

This is due first and foremost to Alnylam efforts in leading the advancement of a critically needed new and potentially transform of approach for innovative medicines and the fact that innovated medicines remained the key value drivers for our industry base on what we believed our last in market base forces including the demands of payers, regulators, pharmaceutical partners, physician and most importantly patients. The strength of Alnylam position in this current environment is also due to success that we have achieved with our science.

Our on match consolidation of intellectual property in the RNAi field and the funding and critical mass we have achieved through business partnerships with leading pharmaceutical and Biotech’s Companies. In short, we are at the right place at the right time and we have executed well to build solidly for the future.

Now turning to 2008 and recent events it is also our view that the last 12 to 14 months had been the most significant value creating period in our Companies history and I had like to highlight some several reasons for this in my introductory comments. First, we achieved an extremely important milestone just about a year ago when we demonstrated for the first time ever human proof of concept for RNAi therapeutic.

Indeed, just as a nature paper we published at 2004 and 2006 represented key risking events showing that RNAi therapeutics can work in mice and not human primates. Our key accomplishment in 2008 was quite a bit more significant because we extended this to man.

We do this as an extremely important accomplishment and the technology defining milestone in the advancement of RNAi therapeutics as a whole new class of medicines. Second we are very pleased with the progress over the past year in our maturating clinical pipeline.

Indeed, we were a Company with one clinical product in 2008. With our ALN-VSP ID filing and its recent approved by the FBA we now have two products in clinical development stages and by the end of this year we expect to have a third product in clinical development.

Our ALNVSP program also defies a major milestone as it shows our progress in systemic delivery of RNAi therapeutics. In addition to the substantial progress, I think it is worth mentioning also the highlights of the growing effort across our partnership and collaborative effort.

These includes existing clinical states licenses with [29:39].Our partnerships with [19:43] which our advancing RNAi therapeutics to the clinic. Our micro RNAi therapeutic efforts was regulars and the very significant numbers of collaboration program across our broad range of targets in a large number of disease indications.

When added to Alnylam directs efforts it is clear that RNAi therapeutics are rapidly emerging as a major new drug class. Indeed, what we are saying here in highly reminiscent to those of us that have been in the industry for quiet sometime of the progress made in [20:14] level antibody therapist in the 1990s.

Third, we made some major advances in our overall platform. Most notably in regards to our delivery objectives and this is evident in the fourteenth [20:28] viewed papers we published last year.

The two new papers that we have already published this year and the very clear demonstration of our scientific progress documented and presentations in this months prestigious case on conference. This is the largest number of free review papers we had ever publish in a single year and we aim to only surpass that number in 2009.

This scientific progress together with the pipeline progress from Alnylam and our licenses our partners and collaborative that I just mentioned also reinforce the fundamental investment this for Alnylam which is the creation of a whole new class of drugs. Fourth, on the business side we had a stellar year information of major business alliances.

These included are major platform alliance with [21:11] our two product alliances with [21:14] and our regulars alliance with GSK. Together and just in the past 12 months alone this alliance have yielded $175 million in realized funding and of course there is more coming as we expect two or more major alliances for the remainder of 2009.

This business execution is fundamentally driven by the strong believe of our partners that RNAi therapeutics are progressing as a whole new class of innovated medicines but also the hard core diligence as they performed showing that Alnylam has the best technology and the best and we believed only intellectual property. And finally we made some very important additions to our chain with the employment as Jack Smith the CSO and its 22:00 as the Director and member of our scientific advisory board.

We also promoted some key talents, such as [22:03] and we recruited additional [22:06]. I mentioned these additions of promotions because our people and our culture remain major drivers of our success.

So inaugurate human proof of concept, systemic delivery and pipeline progress, outstanding scientific leadership, f our major partnerships, and great people and culture are indeed the reasons this past year in our view is the greatest period of value creation in our history. Most of these accomplishments clearly relate to our progress in advancing RNAi therapeutics as a whole new class of innovated medicines.

Of course this achievements also position us for a very exciting year in 2009 [22:52] meet or even exceed our ambitious RNAi 2010 and our very much in lined with our mission of building a top year by a Pharmaceutical Company founded on RNAi. With that I would like now turn the call over to Akshay to discuss our clinical pipeline and scientific progress in more detail.

Akshay?

Thank you, John. As you know, our R&D efforts are focused on building a pipeline of RNAi therapeutics from our proprietary partnered and collaborative programs via the translation of RNAi as a transformative platform with new innovative medicines, including sRNAis, microRNAis therapeutics and RNA activation.

Across these efforts, 2008 was an exceptional year and we are off to a great start again in 2009. Let me begin by discussion of our RSV program.

As John mentioned, the human proof concept data obtained with our Gemini Phase II studies was a first for the technology and the entire industry and certainly represents a notable achievement for Alnylam. These data showed for the first time in a well controlled study that the RNAi can be safely harnessed in man to achieve clinical activity representing a major de-risking event for the advancement of RNAi therapeutics and supporting our Alnylam’s broader R&D assets.

Our goal for ALN-RSV program is to develop an RNAi therapeutic for the treatment of established RSV infection in pediatric and adult populations, where both have significant unmet medical need. As you know, we have partnered this program with Kyowa Hakko in Asia and with Cubist in the rest of the world while retaining 50/50 co-development rights in the US.

We are advancing ALN-RSV01as a lead program, but also have developed second generation RSV specific RNAi therapeutics but have the potential to be differentiated across by pediatric and adult market opportunities. We will have a better perspective on how to maximize value of this overall effort, as we obtain additional Phase II data in adults.

Our ongoing Phase II safety and tolerability trial of ALN-RSV01 in adult lung transplant patients naturally infected with RSV is continuing to progress well and in fact accrual is tracking ahead of schedule. We are on track to complete the trial by mid-year if not earlier with data thereafter.

As a reminder, the study will enroll 21 patients in a Phase II randomized double-blind placebo controlled study to assess the safety and tolerability of inhaled ALN-RSV01 versus placebo and then naturally infected adult population. That is adult lung transplant patients infected with documented RSV.

The study remains blinded and we expect to obtain important safety and tolerability data that will support advancement of the program, and the safety and tolerability are the primary endpoints of the study. Now, we are collecting additional measurements on antiviral activity from the study.

It is important to clearly emphasize that any laboratory or clinical activity data here will be strictly of an exploratory nature and it is extremely unlikely that there will be any statistically significant P-values given the small size of the study. In addition to our lung transplant Phase II study and as part of our ongoing development of the ALN-RSV program, we will also soon initiating a randomized double blind placebo controlled study to assess the safety, tolerability, and pharmacokinetics of twice a day and three times a day dosing regimens of inhaled ALN-RSV01 in adult volunteers.

This clinical pharmacology study was designed based on a very promising preclinical efficacy data with multiple daily dose administration of ALN-RSV01 and as part of our overall strategy in advancing our program to pediatric populations. Turning now to ALN-VSP, our RNAi therapeutic for the treatment of liver cancer, we have made tremendous progress in 2008 and early 2009 on many fronts.

In fact, just last month, Alnylam received clearance from the US FDA to begin enrolling patients in a Phase I trial which we expect to initiate in the first half of this year. As John said, this is our first systemic RNAi therapeutic clinical program, which is a proved point of the strong progress we have made on systemic delivery.

This is also our first RNAi therapeutics program in oncology, an area where we believe RNAi-based therapies are extremely promising due to the emerging data from cancer genetics. The plan Phase I study will be a multicenter open labeled dose escalation trial to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamics of intravenous ALN-VSP in patients with advanced solid tumors with liver involvement.

We will provide additional details on the design of this study very soon once we have begun enrolling. In the meanwhile, we remain very excited about this program and just this past month, we have presented new preclinical data at the Keystone RNAi symposium.

These data in an orthotopic tumor model in mice demonstrated statistically significant increase in survival of ALN-VSP treated animals compared the treatment with sorafenib also known as Nexavar, an approved drug for the treatment of hepatocellular carcinoma. Data also showed an evidence for a potentially even greater increase in survival benefit in animals treated with both ALN-VSP and sorafenib.

We will also remain on track to expand our clinical development pipeline with several additional promising candidates approaching the clinic. These programs include our efforts on hypercholesterolemia, targeting PCSK9, our Amyloidosis program targeting transthyretin and our Huntington’s program with Medtronic.

As a result, together with our ongoing clinical programs on ALN-RSV and ALN-VSP, we expect to have a total of three RNAi therapeutic programs in clinical development by the end of this year, putting us well on track to meet our RNAi 2010 goal of four or more RNAi therapeutic programs in clinical development by the end of 2010. Finally, in addition to our development efforts, we are very pleased with the progress on our overall platform and specifically with delivery.

In 2008 and earlier this year, we expanded our Tekmira relationship while continuing to hold exclusive licenses on the key sample patents and also obtaining the right to opt in to co-developed and co-commercialized Terkmira’s PLK1 program where there was just a very nice paper published in the Journal of Clinical Investigation. We also formed a number of other important relationships, including our new efforts on RNA activation amongst many others.

Much of this is described in the publications, but John commented on earlier and was also very clear in the recent Keystone conference where Alnylam’s science was featured prominently. In that regard, I think it is important to highlight the important data we presented at this meeting regarding the very clear demonstration of RNAi mediated efficacy with systemic delivery and lung delivery that was shown to be independent of any total like receptor retractions, including TLR3.

Together, these data highlight the important work we have made in establishing our platform. In closing, we are very encouraged by the progress we have made this year and we are very excited about the progress we are poised to achieve in 2009.

We are building the industry leading effort in RNAi therapeutics across our pipeline and scientific efforts. We appreciate that there is much to do, but we are only motivated by that challenge.

I would like to now turn the call over to Patty to review our financials.

Thanks Akshay and good afternoon everyone. I am pleased to report on a very healthy financial position for Alnylam that will allow us to grow our business and execute on our mission without any need to go to the capital markets for many years to come.

In these difficult economic times, this is a very good place for us to be positioned. We ended 2008 with $513 million in cash, significantly exceeding our original 2008 guidance of greater than $390 million in cash and our largest year end cash number ever.

This number excludes a $20 million in upfront payments we received from Cubist in the first day of January of this year. Due to our strategy of conservative cash management, we had zero write-offs related to our cash portfolio to day.

Also, we are very pleased to report today that we have repaid the small amount of debt approximately $4 million that we previously had on our balance sheet and now have a zero debt. With $513 million in cash and zero debt, Alnylam has one of the strongest balance sheets in the entire biotechnology industry.

Our GAAP revenues were significantly higher in the fourth quarter of 2008, having achieved $24.4 million in revenues compared to $18.2 million in the fourth quarter of 2007. This strong revenue performance is largely attributable to our collaborative partnerships with Roche which totaled $14 million, as well as from our collaboration with Takeda which totaled $5 million.

Revenues from the fourth quarter also included $5 million of expense reimbursement and amortization revenues from Novartis, the National Institute of Health, the Department of Defense, Biogen Idec, InterfeRx, research reagents and services license fees and other sources. For the full year on 2008, we achieved $96 million in revenue, nearly doubled our 2007 revenue the $51 million which are due primarily to the strong and recurring revenue stream achieved from our collaborative partnership.

Of course the amortization of upfront payments from the strategic alliances, we have formed with Roche and Takeda accounts for a significant portion of our quarterly GAAP revenues. As a reminder, for our Roche alliance each quarter over a five-year period we are recognizing approximately $14 million in GAAP revenues.

With our Takeda alliance, we are recognizing the $100 million upfront payment, the $20 million milestone we achieved in 2008, as well as the $30 million in additional technology transfer milestones, and are amortizing this total of $150 million over a seven-year period, which equates over $5 million per quarter in GAAP revenues. Looking ahead for our Cubist alliance, in 2009, we expect to be amortizing the $20 million upfront payment over seven years, which equal to approximately $700,000 per quarter.

Finally, please recall that the $15 million in upfront payments from our second quarter 2008 alliance of Kyowa Hakko continues to be deferred for GAAP revenue purposes, until we can determine our last deliverable to Kyowa. R&D expenses of $24.9 million were conservatively higher in the fourth quarter of 2008 compared to $15.6 million for the same period last year, due primarily to license fees related to our intellectual property assets, including our recent acquisition of the Nucleonics IP portfolio, as well as higher costs related to the progress of our clinical pipeline.

In addition, we made significant investments in delivery related collaboration during the period. That being said, R&D expenses of $96.9 million for the years decreased substantially as compared to the previous year of $120.7 million, primarily due to higher license fees during 2007 as a result of the Company’s 2007 alliance with Roche, including $27.5 million of license fees payable to our licensors, primarily Isis as well as higher payments for drug delivery related activities.

We expect to see a moderate increase in R&D expenses in 2009 as compared to 2008 as we prudently invest in our pipeline. Of course noncash stock compensation expenses and other items may lead to lumpiness in R&D expenses from quarter-to-quarter.

Higher professional service fees associated with increased business development and intellectual property activities contributed to the increase in G&A expenses for the fourth quarter which totaled $7.3 million versus $5.5 million for Q4 of last year. The increase in G&A expenses for the year overall which totaled $27.1 million as compared to $23.4 million last year were due primarily to a moderate increase in G&A headcount over 2008 to support the Company’s growth, higher noncash stock based compensation and higher professional fees primarily related to the Kyowa, Takeda and Cubist alliances.

We do not expect to see a significant increase in G&A expenses during 2009 over levels seen in 2008. Although amounts may be lumpy from quarter-to-quarter primarily due to the activities ongoing in business development, as well as fluctuating noncash stock based compensation expense.

We reported a net loss of $9.4 million in the fourth quarter of 2008 compared to net income of $1.7 million in the fourth quarter of 2007, which is primarily a result of the stronger GAAP revenues we achieved during the fourth quarter of 2008, offset by an increase in R&D expenses as we significantly progress our pipeline with the ALN-RSV01 to the treatment of RSV infection which is currently in Phase II clinical trial and ALN-VSP to the treatment of liver cancer, which is moving towards the clinic with the IND accepted in January of 2009. In addition, as I mentioned earlier, we have made significant investments in our delivery related collaboration as well as intellectual property including our recent acquisition of the Nucleonics IP portfolio.

Our net loss of $26 million for the year, however, is significantly lower than our net loss of $85 million in 2007, primarily due to the strength of our GAAP revenues from our strategic alliance particularly with Roche, Takeda and Novartis. In regards to our equity in Regulus Therapeutics, we recorded $3.9 million of expense in the fourth quarter of 2008 as compared to $900,000 in the fourth quarter of 2007, as Regulus’ operations have ramped up during 2008.

Regarding taxes, as I have previously mentioned, driven primarily by certain proceeds from our 2007 Roche alliance we generated US taxable income during 2008 and we will make several cash tax payments in the first quarter of 2009 of approximately $6 million. Based on current projections, we expect the deferred tax assets of approximately $5 million that are recorded on our balance sheet, will be utilized in future years to generate a federal tax refund.

Looking ahead to 2009 for taxes, we currently expect a modest GAAP tax provision of $2 million to $3 million. In closing, our solid financial position affords us the ability to prudently make investments in our pipeline and technology and to continue to build the leading RNAi therapeutics company.

Regarding our 2009 financial guidance, we expect to end 2009 is over $435 million in cash with no debt and with a non-GAAP cash net operating loss of between $35 million to $45 million. We expect to incur approximately $20 million to $30 million of other cash payments, including further investment in regular, cash tax payments of approximately $6 million, as I just mentioned, in capital expenditures and other potential strategic investments.

Therefore, we expect our 2009 spend profile will represent a prudent and modest increase as compared to 2008. I will now turn the call over to Barry Greene to discuss our business highlights and our progress against goals.

Barry?

Thanks Patty and hello everyone. As you know, Alnylam has performed exceptionally well on business execution which underlies the financial profile, Patty just described.

To date, we have raised over $660 million in realized partnership based funding and as completed 10 major alliances since our Company’s inception. Importantly, we expect the interest and the needs from the pharmaceutical industry to only continue and in fact we are having excellent discussions with many pharmaceutical and biotech companies around major alliances on our platform, our products and our efforts on microRNAi therapeutics with Regulus.

For 2009, we are expecting to complete two or more major alliances and that is in addition to the Cubist deal we announced in early January. In addition, we are also making progress on new business opportunities across the broad dimensions of RNAi technology in certain areas that fall outside of our core focus, such as vaccines, stem cells, and bioprocessing.

Now, turning to 2008 and earlier this year, the past 14 months has certainly been no exception to our historical track record. Indeed, we formed four major alliances including a platform alliance with Takeda, product alliances with Kyowa and Cubist and our first Regulus alliance with GSK.

These are clear validating events on the importance of our technology and the broad opportunities for our Company. Notably, in May 2008, we formed a strategic worldwide platform alliance with Takeda.

This alliance is valued over $1 billion and includes $100 million upfront cash and $50 million in additional technology transfer payments of which we have already received $20 million in 2008. In addition for Takeda, Alnylam is eligible to receive up to $171 million in milestone payments as well as significant royalties for product.

This was the first major RNAi therapeutics partnership between Japanese pharmaceutical company and a US biotechnology company. It provides Takeda with broad worldwide non-exclusive access to and enablement with Alnylam’s RNAi therapeutics platform technology and IP in two therapeutic areas.

Importantly, they have the right to expand a number of therapeutic fields in the future for $50 million per field. I want to emphasize that the most valuable aspect of our alliance with Takeda includes the right opt in as late as the beginning of Phase III to co-develop and co-commercialize for Takeda RNAi therapeutic programs in the US market on a 50/50 basis.

Now, in addition to the Takeda alliance, we are excited to have established global partnerships with Cubist and Kyowa Hakko to further advance our program for ALN-RSV; together, these two alliances have brought in $35 million in upfront payments, 50% sharing of expenses greater than a $160 million in milestones or retaining 50% of the US market and double digit royalties for ex-US sales. These clearly are outstanding terms of Phase II program and reflect our strong interest in ALN-RSV and in retaining downstream economics.

These RSV partnerships also bring critical mass to the advancement of this program and provide us with additional financial flexibility to invest in the multiple product opportunities represented by our pipeline of novel RNAi therapeutics that go well beyond RSV. In addition to these new partnerships, our existing major alliances notably Novartis and Roche remain extremely strong.

For example, we are pleased to have Novartis extend our relationship for its fourth year and we are pleased to see Roche just continued very strong commitment in the field. I also wanted to provide you with some additional color on the Landmark alliances related to our upcoming 10-K filing.

In particular, we are able to say at this time that our Novartis alliance signed in 2005 is defined as an alliance for 30 exclusive targets with Novartis retaining the right to add an additional 10 targets in return for additional payments to Alnylam. As Novartis advances these programs, Alnylam is entitled to receive milestones totaling up to $75 million for RNAi therapeutic product.

Another feature of this early landmark bill is the option for Novartis to purchasing nonexclusive platform license. With this option exercisable up until the end of the research collaboration during this either four or five year term, Novartis, if they choose exercises option, it would pay Alnylam $100 million upfront in addition to future milestones and royalties per product.

This broad nonexclusive license granted to Novartis would be structured similarly to our nonexclusive platform licenses that we have with Roche and Takeda. Turning to our Roche agreement, we are also making new disclosures namely that we are eligible to receive $100 million of milestone payment in addition to royalties for these therapeutic target that Roche develops and that Roche has the right to expand their therapeutic fields of which they are an additional 18, in addition to the 4 they have at the price of $50 million per field.

So regarding our existing relationships with Novartis and Roche, the key point here is that as we help them succeed in advancing RNAi therapeutics to patients, Alnylam can benefit very significantly in future payments and royalties. Turning to the advancement of our intellectual property position, Alnylam continues to be the leader in this area.

We believe our overall patent position is unmatched in the industry. We have over 1800 active cases of which over 700 have been granted on a worldwide basis and over 300 of these patents have been issued or granted in the world's largest pharmaceutical markets that the US, Europe and Japan.

This is clearly an unparallel intellectual property state in RNAi therapeutics. This is not only measured by the scope of these numbers but also in the level of funding we have received in our partnership agreements and the fact that over 50% of all developing stage RNAi products are currently covered by Alnylam IP licenses.

Of course, for those that are not currently covered, we expect that they will require IP coverage as they approach the market and we can assume they will get covered at a substantially higher cost. It is important to remember that no single patent or patent family defines the full breadth of Alnylam's intellectual property position.

Our fundamental patents need to be looked at in their aggregate form. Together they contained broad sets of claims that are currently issued or pending and we expect these claims to cover all commercially meaningful aspects of siRNA; short, long, blended, over that is containing modified or unmodified, Dicer or risk substrates, and there is others.

Of course, given the strength and scope of our IP, we fully expect that there will be many challenges especially as part of the standard European patent process and as we have seen recently, some of the patents will stand and some will be overturn just as we saw the Kreutzer-Limmer 623 and 945 patents. Some of these will be recovered on appeal, but even if one is lost on appeal, there are many others even the same patent family or as part of a broader state that will be granted and broadly covers siRNAs.

In 2008 and recently in 2009, we continue to strengthen our dollar and IP position with the issuance or grant of important patents owned and controlled or licensed by Alnylam in RNAi. For further information of specific products in this new front, I encourage you to read our press release which offers details on our fundamental IPSD including Tuschl II, Crooke, Kreutzer-Limmer, Kay & McCaffrey and others.

This includes new patent grants that we are announcing today. Under all circumstances in going forward, you can expect us to continue to aggressively prosecute and deliver on a leading and dominant IPSD for RNAi.

In closing, let me reiterate what John said at the beginning of the call. From the very beginning, our goal at Alnylam has been and continues to be the creation of a leading biopharmaceutical company based on the innovative and medical impact that can be achieved with RNAi therapeutics.

We believe today more than ever in the transformative nature of RNAi and that Alnylam is positioned to continue to lead the world in developing new medicines based on RNAi bringing to patients a completely new approach to disease in ways simply not achievable with today's small molecule and biologic approaches. With greater than $0.5 billion, the leading scientific platform, dominant IP, global partners and collaborators and most importantly, people with a keen sense of urgency and passion for creating a new class of drugs, Alnylam today is positioned for innovative growth in 2009 and well beyond.

Thank you for your attention and with that, I would now like to turn the call back over to the operator. Tamali?

It is Dave calling in for Sapna. Just a question on delivery, I know that is sort of an ongoing topic for everyone in the field.

My assumption is you are using some type of lipid delivery for VSP but I was wondering if you have made any progress or if there has been any developments either a key stone or otherwise about more targeted or cells specific delivery and whether you think you can incorporate that into the VSP program or the next program to target more specific cells within the liver or cells outside of the liver.

Dave that is a great question. Let me handle it but Akshay may have some additional comments as well.

So with the VSP program, also with our PCSK9 program and our transthyretin program, we are using systemic delivery with the liposomal formulation that has been developed together with our collaborators at Tekmira Pharmaceuticals and that formulation has performed exceptionally well in delivery of small appearing RNAis to broad cell types in the parenchyma of the liver and we believe it is a robust platform. In addition, we have of course, also developed liposomal formulations as part of our MIT collaboration but also continue to improve these formulations together with our collaboration with Tekmira and the University Bridge Columbia amongst other efforts that we have in the Company.

So that approach really works quite well for targeting any target chain in the liver that is involved in the cause or pathway of human disease and that of course is a lot to handle right there. Now, in addition to the work we are doing on liposomes, we are extremely involved in doing work on conjugate based delivery which is focused on more targeted specific cell types.

We commented at Keystone and other meetings on delivery using Foley conjugates for tumor, delivery for example. Of course we have also talked about our cholesterol conjugate approach in the past and also have used certain sugar conjugates to get delivery to hepatocytes potentially to macrophages as well and that is part of an ongoing effort where we showed data at the recent Keystone meeting.

Beyond that, we also have a broader set of work that is going on with the Company that is going to be disclosed in the future but not ready yet for disclosure but areas that we are very excited about for other approaches for systemic delivery to other tissues in the body. So, I would say Dave that in a nutshell, the progress that has been made has been phenomenal to date.

We are extremely happy with it but as I have said before, we will always be working on delivery just like people are still working at antibody engineering 30 to 35 years after Koehler and Milstein discovered monoclonals and this could be a part of an ongoing area of research in the Company but the good news, of course, is that we have extremely good versions of delivery technologies that can allow us to build an exciting clinical pipeline and set of marketed products, we believe based on what we have already. Akshay, any further comment?

I think you covered that. We have an excellent foundation to build on with our published and well-known work across liposomes with Tekmira and MIT and also the conjugates that you mentioned and I think there are very logical evolutions of the liposomal work that we and others will sharing with altering the pharmacology of the liposome by manipulating components to have different half-life profile and different bio-distribution pattern.

This is very attractive and we are very interested in that and work on that with Tekmira. They illustrated some of their work in this regard in the very recent general and clinical investigation paper showing liposomal delivery using their Tekmira liposome, the kind that we work on with them showing delivery to tumors outside of the liver in other compartments.

So I think also the pharmacology of the liposome then also decorating the liposome with certain [legends] that allow homing to critical targets on say tumor type and other organs is quite feasible and we are very actively interested in that. And the conjugate that John has described and the cholesterol conjugate is just at the vanguard of many other different conjugates.

One can envision we are very busy working with. So I think a lot more to come.

Yes, I will just finish up Dave by saying that we probably see two or three companies a week that come by to visit Alnylam because they have ideas in different approaches and we welcome them all and we have feasibility agreements that are ongoing with well over 20 of those companies and most things do not work as suggested by these companies but we do evaluate them and we have a very open approach with the broader academic community in terms of what is going on. So we are at the center of everything that is going on and I cannot think of single technology that we are unaware off at this point in time unless it is just begin to ferment some place.

So we are very connected in where that whole bill is going. Analyst for Sapna Srivastava - Morgan Stanley And just one quick follow up, you said your current VSP formulation gives broad liver distribution.

Does that include biliary as well as sort of liver parenchyma?

We have not done laser capture micro dissection to answer your questions specifically but what we do know is that we know that all cell types that where we have measured cell type specific message can be silenced with this approach and so we believe that we are getting a broad silencing of that across the entire liver parenchyma regardless of cell type.

I also have a question about delivery. I went through your Keystone data and your recent PNAS paper with this new lipidoid, the LMP-1.

So I had a couple of questions on that and actually I saw today the announcement by Tekmira at the meeting in Japan where they mentioned that they have this new SNALP formulation with a therapeutic index five or ten times over current formulations. So the first questions is for your Phase I with VSP, are you using this new formulation that Tekmira is talking about and actually they published paper yesterday in JCI or are you using something that was developed few months earlier for example?

Well so the work that we are doing with ALN-VSP is very comparable to what would be characterize in the JCI papers through liver specific SNALP formulation and that was being used for our VSP program. As you know with the JCI paper nicely characterize the PLK1 program that Alnylam has an opted right for with Tekmira.

So we are excited about that program and the progress they have made with that program as well. We like PLK1 as a target.

So, that work does not describe the release that came up from Tekmira to my understanding as it relates to some new advancement but we are very aware of those new advancements and we have licenses to those technologies as well. So based on our long-standing relationship with Tekmira and of course the role that we play in bringing the contentions Protiva and Tekmira organizations together as one happy family and our investment in Tekmira, our strategic relationship with them is very strong and we have a very good relationship with them across their entire platform.

Okay and then secondly again on delivery, I read at the PNAS paper, the LMP1 lipidoid from Bob Langer's lab, is that, I mean would you characterize that as an early stage type of formulation that you are going to use first in your preclinical or is this ready for primetime? Is it an improvement over the SNALP's comparable?

I think that the formulation that has been developed at MIT are actually extremely exciting. We view MIT as a longer range technology area for us.

It is obviously some extremely exciting academic results that I think will widen a lot of eyes and but it is still being, I characterize it as two to three years behind where the work is with the current version of liposomal formulations with our Tekmira relationship for example.

Okay, great. I have a question about a week ago, Roche announced the idea with a small RNAi company, MDRNAi and they did not really disclosed any terms or anything but given that they are your partners and they are engaged to you and it is going to mound your IP and everything, do you have any comments?

What do you think they may have seen that prompted them to go outside their relationship?

Well, I think that Roche is a very committed player in the RNAi therapeutics field and has made already a couple of what I characterize as incremental moves in the field based on the foundation of what they did with Almylam. So with Almylam, they did obviously the partnership gave them the broad freedom to operate in the field and I think they have been interested for example on their Mirus' acquisition that they did last year where they acquired Mirus for $125 million and in the MDRNAi relationship which is undisclosed, I would only characterize that as being obviously very small amount of money by necessity of disclosure requirements that MDRNAi would have.

They are getting access to incremental types of technologies that help them advance their overall efforts and we are excited about that. The more commitment that Roche has and Novartis and Takeda have to this field, the better for Alnylam.

We view that as a very positive aspect of it and of course as part of our relationship with Roche, if there are things that come out of their efforts, if there are things in the future that come out of our efforts, there is a foundation in which we can essentially get access to each of this future technologies if it make sense for each other to do so.

Okay and one final thing and I will jump back in the queue, one of the things that you guys have done really well and have impressed investors is being able both in 2007 and 2008 securing the large upfront payments from Roche and Takeda and I know that is loathed question but is there something that we can see again in 2009?

Well, I do not know the exact answer to that Simos because we have discussions ongoing that certainly relate to those types of relationships. We have discussions ongoing that are more product specific relationships.

We have a very solid track record in the past. Certainly what we are aiming for is to form the significant type of relationships that you have seen in the past but it is impossible to predict with certainly which ones will happen next and how much would those be and this and that the other, but certainly when we talk about two or more major alliances in 2009, that is built on a foundation of a track record which I think obviously speaks for itself and we are very confident about where that can go whether it happens in 2009 from a platform standpoint or 2010 from a platform standpoint, only time will tell for those type of alliances.

But we certainly have those types of active discussions.

You talked about, Barry, I think you mentioned the potential application of RNAi to vaccine, stem cells and bioprocess. Will that be siRNAs or might it also involve some of the other classes of RNAi focused therapeutics that you are developing were activators like RNA and maybe even 3P siRNAs?

So, great question. Let me handle it, Barry did mentioned that but it does absolutely include other aspects of noncoating RNAis that are in our entire platform.

So it is probably obvious to you Pamela that RNAi activation could be very interesting for induced pluri-potency or the trip siRNAs that we reported in the Nature Medicine paper could be very interesting for vaccine development and so we are looking at how we can leverage our platform in those areas in ways that build value and monetize those approaches because they are not our strategic focus to the benefit of Alnylam shareholders.

Okay, so should we also accept 3P siRNAs and RNA focused programs in their early pipeline eventually over the next couple of tests?

We certainly hope so. I mean what we are aiming to achieve, those are earlier as you know.

We are hoping to achieve with RNA activation this year would be in vivo proof of concept with that approach and we have already done that with the 3P siRNAs based on the Nature Medicine paper and we are interested in expanding that work to get some additional data which hopefully we will be able to publish this year as well. But those are still earlier efforts within our research activities.

So looking ahead, the whole pipeline could evolve into pipeline of portfolio approach to all the technology within RNAi as well as, that you guys have developed along with applications in even bioprocess. How would that work?

Well there are clear opportunities for using RNA interference as a way of controlling bioprocessing to improve biologics manufacturing. So we have a very active interest in that area and we will look at ways of monetizing that technology in the years to come.

And to think that will be totally therapeutic focused or any..?

From a biological standpoint, it will be therapeutics focused, not.

Not add or anything else outside of..?

Well there could be other applications beyond human therapeutics as well.

Just a question on the Novartis agreement, just to clarify, they are currently extended through October of 2009, correct?

That is correct.

It is an option for one more year for them to pick up?

That is correct.

And for them to, essentially once that agreement expires they would then essentially be faced with a decision as to whether or not they want to sign on to a platform agreement.

That is correct, and what we disclosed today is that the upfront payment they would make under that will be $100 million.

Yes, so essentially then they are developing I am presuming clinical asset at this point or preclinical assets or anything but based when the terms of the agreement expire, will it be necessarily I guess be forced into a platform alliance in order to continue any of the work under the current IP that you guys hold?

Well for the 30 targets that are currently under the license agreement, for any active programs at the time, it would just close. If they let us say, it ends at five years and let us say they are working at that five year time playing 10 active programs, those 10 active programs continue to survive beyond the term of the agreement.

They will last on till those products or market and everything else but if they want the broader technology for any nonactive program even beyond those 10 as well as broad applications and other therapeutic targets, they have to take an adoption license so a platform license at that time.

And then just in terms of thinking about product specific alliances, there was a lot of commentary and questions about developments in delivery technology. Do you think that because we are necessarily so early in the delivery stage of thing that that would preclude another company from signing product alliance or say something like VSP when two, three years out there maybe an improvement in the lipid delivery formulation which requires them to put the thing back in the Phase I trials and reevaluate safety and tolerability.

First of all, we think VSP is currently configured as good to go in the market as far as we know now, Stephen, number one. Number two, the specifics of how we will do a product deal with an ALN-VSP for example and we intend to fully retain the US market rise to that product so we would look for our European and rest of world partner there.

That is going to be obviously done at a format that would include improvements and other types of embellishments of delivery for example that might take place in the future. So it would at all be un attracted to the partner as it relates to how you would advance that type of program.

And then you mentioned the Roche and Mirus deal. Have you looked at any viral specific expression at all or given out their expression and..?

Yes, we have looked at that Stephen but I mean I have to say well it is interesting and there are some potential there, you have to focus on something and we have been very focused on delivering synthetic siRNAs. There has been some interesting work that has been done with some viral doctor methods and non viral doctor methods as well.

But that is just not our bailiwick and we are going to stay focused on siRNAs.

I was intrigued by your comment earlier about strategic investments. Just wondering if you can elaborate on that a bit and whether that relates positively to some acquisition plans into 2009?

Well, let me have Barry answer that question. Barry?

Yes, Alan. This is something we have been talking about for quite a while and in fact Regulus is the best example of this so far.

Given the ubiquitous nature of the RNAi pathway and the dominant IP we have, it is important for us to enter in the other areas where RNAi can add value and we are very focused on developing siRNA therapeutics so things like microRNA therapeutics or vaccine enhancements as John mentioned bioprocessing or other possible companies that can be formed where we have returned tremendous value to shareholders by owning a significant portion of that company or product rights from some of those companies but not detract from our core mission. So, if there are pieces of technology that are important to make those companies work, there maybe pieces of acquisitions but it is really driven by the significant scientific advancement and the power of RNAi in these different product and company opportunities.

And I will just only add to that Alan, Barry very spot on but I would just add that everything we would do relates to RNA interference. We have no interest in acquisitions outside of our core focus whatsoever and the reason for that is that we can imagine a single dollar that would be better spent anywhere else other than RNA interference at this point in time from certainly from our advantage point and so that is going to remain the focus but in addition to what Barry just mentioned, there could also be an opportunistic investments that we would look at on delivery technologies out there.

We do scan that universe. We are in a balance sheet position as a company and as a leader in the space.

We see every deal that is being offered by investment banks. We review them closely and so there maybe things that we need to take a look at.

We put some money in reserve from a financial planning standpoint so that we obviously can choose to use it. If we do not use it then obviously we will keep the cash but we are in a mode where we are always open to looking and always open to exploring as long as it is related to RNA interference.

Okay that is good. I have one other unrelated question.

Regarding the RSV trial in lung transplant patient, that one you said enrolment would end mid 2009, maybe a little earlier. What about timing of data?

What are the results from that trial? What sort of lags you expect between..?

Great question, let me have Akshay answer that.

Alan, I think we said data soon thereafter. So, if the trial finishes midyear or so, I hope a little earlier it looks like then naturally we have to get the data and look at it very carefully, show the quality and so I think you can expect in the period of months after that that, and we are talking of few months that we would release and as that usual practice, we will give a review ahead as to the time and date and a suitable venue where we will be announcing data.

Typically, we have announced them at scientific form.

So we should expect the results from this not necessarily in form of a press release but associated with a particular meeting?

No, we would do a press release and that obviously there would be a follow up full scientific presentation in a scientific meeting.

Oh, I got you, okay. And then sorry, I missed this also but you are planning to start a trial inhaled formulation two to three times a day in a dose.

When did you guide for that to start?

Akshay?

That will start fairly soon within the next month or two so it is very much a first half of the year activity that we want to initiate that.

And that is simply a clinical pharmacology study, Alan that is focused on leveraging some of the experience we have had out of the preclinical research into the human setting as well.

This was healthy volunteer, right?

That is right.

Just one moment, this will be our last question.

Yes, thank you Cynthia. Hi Pamela.

Just quick follow up on the timing of the Novartis decision for platform license. I thought that they have to decide before the end of the agreement or was that more like July, am I remembering it correctly?

There is a notification period if they choose to extend for year five. There is a notification period that is provided in July.

They can actually wait until the October time point to take their platform license. And with that, let met thank everybody for joining us today.

Obviously we had a great year last year by all accounts and I think 2009 is already stacking up to as great, if not a better year. So, thanks for you time and we look forward to talking to you soon.

Bye-bye!