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Executives

Barry Greene – President and COO

Michael Mason – VP of Finance

Analysts

Kristina Tibor – Lazard Capital Markets

Alnylam Pharmaceuticals, Inc. (ALNY) 2012 Lazard Capital Markets Healthcare Conference November 13, 2012 2:30 PM ET

Operator

So we’re going to go ahead and get started. My name is Kristina Tibor [ph]. I’m from Lazard Capital Markets, working with the biotech team. I’m here today with Barry Greene, the President, COO as well as Michael Mason, VP of Finance and Alnylam is a leader in RNAi with the goal having five late stage programs in the clinic by 2015.

So with that, I will let them get started. Thank you.

Barry Greene

Thanks, Kristina. I’d like to thank the organizers of Lazard for having us here today. I’m Barry Greene, the President and Chief Operating Officer of Alnylam Pharmaceuticals and I will make some forward looking statements. Before I dive into the crux of the presentation, just one housekeeping note. We were very pleased last night to announce the end of our litigation restructuring of our arrangement under what we believe are very good business terms and due to that we’ve updated our cash forecast in the year at greater than $250 million and I’ll talk about that at the end.

So we are here to give you an update of the tremendous progress we’re making in developing an entirely new class of human therapeutics, a class of human therapeutics based upon RNA interference, the opportunity of silencing virtually any gene in the genome involved in the cause or pathway of disease and with RNAi we uniquely work upstream of where today’s drugs work and therefore can have potentially significantly improved effects in certain diseases to really help patients in need.

Now, the key technical hurdle with RNA interference over the last number of years is what we’ve called delivery and when I talk about delivery, I’m referring to getting the molecule that mediates RNAi, the siRNA into the cytoplasm of the cell which is really RNAi machinery works and for the purposes of liver synthesized proteins, we solve delivery with two platforms. The first platform is the electrozoma nanoparticle platform de-risk in the clinic and the second is our GalNAC conjugate platform where subcutaneous administration is available with this dosing paradigm.

Now, the amount of data that has been created over the last year, 18 months is quite considerable and very consistent with our belief that we can in fact make important medicines with RNAi. In the upper left end corner we’re sharing a growing database of safety and pharmacokinetics with about 100 patients dosed systemically with over 325 doses administered and very importantly and a major de-risking for chronic administration is we had a patient in liver cancer program out over two years of dosing. She left the study with a complete response.

The upper right hand corner, we’ve proven that the effects that we’re seeing in the liver are in fact mediated by RNAi and the bottom left we’ve seen very significant protein knock down, circulating protein. So we’ve got good bio markers to measure here and bottom right, reduction cholesterol showing clinical efficacy with the dosing of an RNAi therapeutic.

Now, the profile that we are seeing in this cartoon and then real data to support the cartoon, is very amenable to a commercial product with a single administration we’re seeing potent rapid knock down with medium effect to seven to 10 days and then a return to normal in one to two months. So you can start seeing once a month or once every other month dosing profile for patients and diseases.

Now with liver delivery solve using both LNPs and GalNAC conjugates, our product strategy is something we’re calling Alnylam 5 by 15 and that is our commitment to five programs and clinical trials by 2015 and very importantly, each of those programs has unique strategic characteristics to make it a 5 by 15 program. First and foremost, each program is defined by a genetic target that gives us significant de-risking and if we have the effect on the target we desire, we should see translation to clinical benefit. And these are all for diseases that have significant unmet need.

The second criteria is that we can approach these diseases with our current delivery, that’s LNPs or GalNAC. Our third, and I mentioned this earlier, there are very clear circulating biomarkers that we can measure. We know we’re having the effect by measuring the biomarker that we desire. Again, major de-risking for later stage clinical development. And then importantly, each of these programs have clear development paths and what we believe are significant commercial opportunities.

Now with Alnylam 5 by 15 we guided at the beginning of this year that our focus is driving ALN TTR to the market and our hemophilia program ALN AT3 to the market, with or without partners.

Now let me start with the transthyretin mediated amyloidosis or ATTR program. This is an orphan disease with a significant unmet need. There’s about 50,000 patients worldwide and unfortunately for these patients is has pathology that afflicts these patients really in the prime of their productive lives, 40, 50, 60. There are two predominant forms of ATTR. First is polyneuropathy and the second is a cardiomyopathy. As I mentioned, because of the deposits that form and were dismissed for the protein, there are deposits in other tissues as well causing horrific core morbidities such for example as wasting. This is a disease that’s failed in 5 to 15 years of clinical onset.

Today there are really no attractive treatment opportunities for a very small subset of these patients. Liver transplant is minimal, but for many of these patients liver transplant is actually contra indicated. And then as you’re probably aware, Pfizer with the acquisition of FoldRX has a drug Tafamidis which is approved in Europe but still requires a phase three for approval in the United States. US FDA rejected the drug because of the lack of what they saw was appropriate efficacy and missing the primary endpoint.

So real opportunity of a drug for these patients in need. Our program targets all mutations as well as the wild type protein. The reason that that’s important is that going back to liver transplant, we know that while liver transplant is helpful in certain patients, it actually is harmful in other patients because the wild type deposits continue to move even though the mutated protein disappears. So our program ALN TTR 02 is a phase two with a commitment to initiate a phase three trial at the end of 2013 and then we’re going to be filing a subcutaneous form this program. ALN TTRSC at the end of this year with data, next year.

Now, we have a great example in a transgenic mouse model of what we’re trying to do in people. This is as I said a V30M transgenic mouse model where you can see that these TTR deposits build in peripheral tissue. Once treated, you can see a complete reduction in TTR deposits in the peripheral tissues and at least in one of the tissue types through staining a reversal of these amyloid deposits. So again we hope that this translates into patients and then we can not only stabilize the disease, but have a reversal of the disease as well.

Now, a critical question, how do we know that by knocking TTR down or reducing circulating protein, we’ll have a translation to clinical benefit. And we know from other systemic amyloid diseases, amyloidoses, APO amyloidoses that if you remove the insulting protein at about 50%, you do in fact see a reversal of the disease in the case of amyloidoses survival benefit. We also know that as I mentioned liver transplant helps exacerbate the disease in certain patients. Now while Tafamidis had moderate efficacy, we do know that it stabilized TTR. Even as a stabilizer shows slowing of disease progression in certain patients and then as I mentioned the transgenic mouse model clearly shows that in the case of this model at least we can see a reversal in these TTR amyloid buildup.

Now, we announced in July pretty spectacular data in our phase one study. This was a single IV injection and you can see that we had rapid durable knockdown, specific knockdown at doses between 0.15 and 05mg per kg. On this slide there’s a red bar at the top of the slide and that is a “control SI” in the context of our PCSK9 study we measured circulating TTR. I’ll remind you that PCSK9 uses the same as delivery, ALNP delivery as TTR. So this demonstrates that this knockdown was in fact caused by the active part of this drug which is the siRNA and ALN TTR02.

We can see on this curve the maximum TTR knockdown, knockdown at eight here, knockdown at day 28 that we see clear dose dependence each of these levels. And then very importantly we saw very clean safety and tolerability profile with a single dose administration where we saw no differences in adverse events across doses and no real difference between drug and placebo. I will highlight that there was one infusion reaction. I’ll remind you that with any colectazomo drugs, drugs such as Doxil for example, you often see with lipids infusion reaction, something we know about, you look for. Patients then get removed from drug and then drug is re-administered at slower rate. That’s what happened with this patient. In fact that was the point tri patient we saw the most dramatic TTR knockdown. So clearly no loss of efficacy after re-administration of drug.

Now, our ALN TTR2 phase two study is an open layer multi center, multi dose, dose escalation study in around 20 patients. We’re dosing twice. Once and then a month later another dose. We’re looking for safety and tolerability but again can clearly measure clinical activity. We’re currently enrolling and expect to have data mid 2012 where we’ll present hopefully curves that look very much like what I shared with you earlier and a safety profile close to the safety profile with a single dose study.

Now as I mentioned earlier, we also have a subcutaneous form of TTR ALN TTRSC. You can see here again a rapid durable knockdown and a sustained knockdown for a month on a weekly, once a week subcue administration. I will note that the doses that we have here are amenable to a single subcue injection, probably as I said once a week after administration of the loading dose.

So we also believe that ALN TTR represents a very significant commercial opportunity. It is an orphan disease where we’re achieving around 80% knockdown 8, 6 to 12 doses for a year. Clear value supported by pharmacoeconomic data, not only delaying mortality but delaying or reversing many of the core morbidities that I’ve talked about as well as stabilization or reversal of disease. Our thinking is to advance this program into the FAP population and expand to the other population soon or after FAC and systemic amyloidoses as well as going in earlier and potentially treating carriers with our ALN TTR02 drug or the ALN TTR subcue opportunity.

Now we recently announced a partnership with Genzyme for the Japan Asia region. We’re thrilled to have clearly the leading innovative company at speeding orphan drugs to patients, our partner with this program Genzyme. Very importantly for us, this we believe will speed our access to patients in Japan and that region with a phenomenal team. We’re thrilled with the deal and importantly, we wanted to optimize our backend economics and have royalties of mid teens to mid 20s at the upper end. So we get to almost profit share like royalties industries with Genzyme.

Let me now turn to the hemophilia program. I think we all appreciate that hemophilia is a male dominated monogenic bleeding disorder mutation to factor VIII is a cause of hemophilia A, factor IX is the cause of hemophilia B and I will note that there are many other rare genetic bleeding disorders that fall into this category. Arguably one of the biggest unmet needs in this area are patients who develop inhibitor antibodies to the factors that have over six bleeds a year. Very significant cost when they get these bleeds. Significant numbers of hospitalizations and really no amenable therapies for these patients.

What we’re doing here is with ALN-AT3 is targeting antithrombin and resetting the coagulation cascade. The way to think about this if you will is we’re moving the brake that hemophilia patients have on creating thrombin generation and preventing bleeds and antithrombin is very well documented genetically as well. We have a program where we intend to file our I&D in mid 2013.

Now, some preliminary data with ALN-AT3. You can see in the upper left corner a clear dose dependence of AT3 and its’ with our subcutaneous administration. On the upper right corner you can see that once a week dosing at doses as well as 0.7mg per kg weekly causes significant knockdown. The bottom left is work that we did with a collaborator in hemophilia B minus and you can see that with the three hemophilia B – at least in this experiment as compared to wild type, compared to non-treated, we’re turning those hemophilic mice to normal thrombin generation and when you map on the bottom right area under the curve you can see a return to normal levels. This is exactly what we want to do in patients.

Now, I talked about the areas of unmet need and clearly the inhibitor patients are a big area o unmet need. We also believe that the non-inhibitor non chronic administration patients have a significant opportunity for us. It’s really talking about a game changer in the treatment of hemophilia rather than three times a week IV infusion or even once or twice a week where some of the new long acting factors may get. We’re talking about a once a week or once every other week subcutaneous administration with biology that keeps thrombin generation constant and potentially has an effect on the longer term bleeds that we’re seeing in patients now treated, causing joint deterioration.

So because of that, again we believe potential game changer in hemophilia and represents a significant commercial opportunity. The hemophilia A and B market driven by the factors is already over $6 billion market with major unmet needs. Many of these patients have a poor quality of life. They still suffer from spontaneous bleeds. As I mentioned the significant longer term effect, even when maintained prophylactically is joint deterioration. We now have people in their 20s and early 30s that have been prophylaxed their whole lives and they’re suffering from joint deterioration due to the micro bleeds because factors not on board long enough to completely cover these patients.

The potential fast track to approval here is as I mentioned is in the inhibitor patients and again is a very good value proposition driven by pharmacoeconomics to achieve premium pricing. Following inhibitor patients we believe that we have an opportunity for all hemophilia patients and we’ll go there with other clinical studies.

So let me turn to the other Alnylam 5 by 15 programs. These are programs that we intend on moving forward with partnerships for severe hypercholesterolemia. We have ALN-PCS. It’s a PCSK9 program. We presented very attractive phase one data with this program which I’ll share with you shortly and also more recently announced that we have a subcutaneous form of this drug as well. Our intention is to partner in ALN-PCS and with a partner move this program into phase two. We have a program for refractory anemia and a program for hemoglobinopathies, both of which we intend on partnering in order to move these programs into phase one.

So to mention PCSK9, we presented this data back in April and again this uses the second generation LNP delivery. We can see here is that doses up to 0.4mg per kg are very significant knock down in PCSK9 and then a reduction in LDL up to 50% knockdown. So clear clinical efficacy with RNAi therapeutic targeting PCSK9 and this is a program we think is very partnerable and with a partner we’ll move the program forward.

So hopefully what I’ve shared with you across all of our Alnylam 5 by 15 programs that the characteristics that are articulated are achieved. A genetic target, tissue expression in the liver, human genetic validation, clear early delivery milestones and then a rapid path to approval with significant commercial opportunities across each of these programs.

Let me talk about the other programs we have, our so called partner programs. We have an RSV program partnered with Cubist and Kyowa Hakko. We presented data earlier this year on a phase two B study in adult lung transplant patients showing sensibly what we showed in the 2A study which is a reduction of neuro progressive bows with about a 50% effect size. Our plan is to speak with US and European regulators and our partners and then provide guidance about the path forward on this program later this year.

We have a liver cancer program partnering with a Chinese company, Ascletis. Our plan there is to have Ascletis conduct a phase two study in hepatocellular carcinoma patients. China is a great place to do that and then with those data in hand, decide if we take the program forward which we have the opportunity to do across the rest of the world or potentially partner this program across the rest of the world. And then finally, we have a program in Huntington’s disease partnered with Medtronic and CHDI. Medtronic is really driving the program forward now. It’s our drug and their device for Huntington’s patients.

So what I’ll hopefully walk you through is a very attractive emerging pipeline of RNAi therapeutics targeting genetic targets, well validated genetic targets and diseases with significant unmet need where we at least in the case of ALN TTR and ALN-AT3, will drive these programs through development and into commercialization, with or without partners or future partners. And then also importantly, because of ubiquitous nature of RNAi, we’ve been able to monetize areas outside of our core therapeutics focus. Regulus, a microRNA company recently went public. We wish them well and we are a 17% shareholder in Regulus and believe that Regulus’ success will turn to value for our shareholders.

We did a deal with Monsanto, bringing in almost $30 million of upfront cash where Monsanto is using RNAi in agricultural applications and with their success we share milestones and royalties there as well. We have vaccine work. We have announced a deal with Glaxo helping to improve the manufacturing of flu vaccines and several other partnerships in the biologics area as well. So this is an area that because of partner stake we have in power of RNAi, create monetization events for we and our shareholders.

I talked about Regulus already. So let me wrap up with a discussion of our financials and a clarification of our goals. We just announced our third quarter was $296 million in cash, 52 million shares outstanding and as I mentioned we last night revised the guidance to end the year with over $215 million in cash through a multiyear runway for us and sufficient to drive ALN TTR02 through positive phase three studies and our hemophilia program to human proof of concept.

From a goal perspective, we’ve been very successful in hitting the goals we thus far we articulated at the beginning of 2011. That is data with ALN TTR02. Commitment to have data on the phase two mid next year with initiation of the phase three in 2013. ALN TTR subcue have an I&D filed at the end of this year with the clinical program starting the beginning of next year.

We also think we’ll get on this program next year. ALN AT3 in clinical trials 2013. ALN-PCS moving forward, having completed now phase one into phase two with our partner. Up siding and the temper program moving forward into phase one with a partner. RAC guidance later this year and VSP partnered with this, hopefully with data on that program in the not too distant future.

We do believe that given data that’s emerging and the opportunity with RNAi therapeutics, that there will be other partnerships and we’re committed to maintaining a very strong balance sheet and running a very focused company, driving ALN TTR02 forward and ALN-AT3 forward.

So thank you for your attention. Hopefully I’ve shared with you the excitement that we Alnylam have with RNAi therapeutics and building entirely new class of human therapeutics. Thank you. Is there time for one question, two questions?

Question-and-Answer Session

Operator

Thanks. Two questions. One is regarding your TTR program. How would you compare it with the antisense program that Isis is pursuing for the same indication? And the other question is also regarding PCSK9. How do you compare it with the oral suffering development? What would be the benefit of that?

Barry Greene

Right. So compare TTR and PCS with other programs. So with TTR opportunity, again orphan disease, significant unmet need that ends unfortunately in death. So TTR is an area where multiple drugs may be used to stop or reverse the disease because it is uniformly fatal. We think that we have the most attractive profile out there. Once a month IV dosing rapid reduction in TTR. So we’re doing, if you want to think about it this way is really a chemical liver transplant rather than an actual liver transplant and believe we have the most attractive profile for patients and their caregivers and for physicians. On PCSK9, what we’re doing with RNAi therapeutics really is phenocopying human genetics. The reason that PCSK9 is such an attractive target is because of the human gene X that show that lower PCSK9 carriers have a lower incidence of cardiac disease and lower cholesterol. So we are silencing PCSK9 both inside and outside the cell and believe that should translate to significant clinical benefit. And again, with both a once a month IV infusion or as we announced, we have a subcue program, a very attractive profile for our partner to take forward.

Unidentified Analyst

(Inaudible).

Barry Greene

Question is why would it be better than those? If you look at the LDL landscape, there’s a significant number of patients that just have untreatable high cholesterol. So we are probably looking at a combination of those or at patients where some of the oral therapies, even the potential neuro oral therapies just don’t work for those patients.

I’m getting the signal that we’re out of time. Thank you for your attention. Appreciate it. Bye.

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