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Until the bearish call yesterday morning, shares of Alnylam (ALNY) were trading around $33 a share.

But Leerink Swann, which specializes in biopharma/healthcare equities research, initiated coverage of the stock yesterday with an "Underperform" rating saying it should soon be worth less than half its value today. The analyst, Jonas Alsenas, a veterinarian, is setting a 2009 price target of $14-$16.

Since I first did a story on ALNY and the Nobel Prize-winning RNAi  technology back in early 2005, the stock is up 360 percent.

And since late 2006, when Merck (MRK) took out another RNAi company, Sirna Therapeutics, for what Leerink calls "an astounding $1.1 billion," ALNY shares have climbed nearly 90 percent. When I did that first piece, the combined market caps of the three RNAi players was less than $300 million. Today, ALNY is worth $1.3 billion.

(The third company, CytRx [CYTR], is still a penny stock with a market value of less than $50 million.)

While investors have been crossing their fingers that Alnylam could also grab the 100 percent premium that MRK ponied up for Sirna, the company has instead been busy striking partnership deals with the likes of GlaxoSmithKline (GSK), Novartis (NVS), Biogen-Idec (BIIB), and Medtronic (MDT), just to name a few.

But Alsenas explains away what many others see as pipeline-validating agreements with this interesting take on things:

The pharmaceutical industry is often swept by new technology fads. They are caused by sincere enthusiasm, fears of being left behind, and desperation to fill chronically depleted development pipelines, in our view.

Many analysts and experts believe RNAi could become the basis of future breakthrough drugs. But Leerink Swann thinks RNAi is more of "a drug development tool that we feel is more suited for research purposes than the development of therapeutics." Because of that, Alsenas is telling clients, "We do not believe Alynlam will successfully develop a product for many years, if ever."

Source: Alnylam Pharmaceuticals: A Falling Star