The Latest Skirmish in the Patent Wars

A long time ago in a galaxy far, far away, there were... Patent Wars. Actually, the time is now and the galaxy is our own, but the patent wars are real -- and the battles can be intense.

The latest exchange of fire resulted in a small victory for Alnylam Pharmaceuticals (NAS: ALNY) and Isis Pharmaceuticals (NAS: ISIS) . The U.S. District Court in Massachusetts denied Tekmira's bid to have some claims dismissed and to disqualify Alnylam's legal representatives.

Battle lines
This particular battle is being waged because Alnylam alleges that Tekmira infringed on several patents, including one owned by Alnylam's business partner, Isis. The patents relate to technology involving lipid nanoparticle-formulated small interfering RNA molecules. Just reading about LNP and siRNA gets your blood boiling too, doesn't it?

All kidding aside, this technology is a big deal. Advances in RNA interference won the Nobel Prize for Physiology or Medicine in 2006. Small interfering RNA can be used to silence specific genes that produce proteins that ultimately cause various diseases.

Tekmira is one of the smaller entities to which Alnylam granted licenses for development of RNAi therapeutics. Alnylam partners with several large companies in its development efforts, including AstraZeneca (NYS: AZN) and Monsanto (NYS: MON) . The company ended an earlier alliance with Merck (NYS: MRK) in 2007.

Worth the fight
ALN-TTR is Alnylam's product farthest along in the pipeline. This RNAi therapeutic targets treatment of amyloidosis caused by the transthyretin protein, commonly referred to as ATTR. Jaffray analyst Edward Tenthoff predicts that the drug could ultimately reach blockbuster status with global sales of $2 billion. That is an amount definitely worth fighting for.

The recent court ruling amounts to little at this point. Tekmira's attempt to have claims dismissed and attorneys disqualified is akin to firing shots over the enemy's heads. You can bet, though, that this battle will keep going for a while.

Investors might want to consider joining in the melee on their own terms. Alnylam shares have traded in the range of $17 to $21 per share since the company reported positive results in July from an early-stage trial. If the stock pulls back to around the $18 per share mark, it could be a good time to pull the trigger.

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