SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2012

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The Company comprises four entities, Alnylam Pharmaceuticals, Inc. (the parent company) and three wholly-owned subsidiaries (Alnylam U.S., Inc., Alnylam Europe AG (“Alnylam Europe”) and Alnylam Securities Corporation). Alnylam Pharmaceuticals, Inc. is a Delaware corporation that was formed on May 8, 2003. Alnylam U.S., Inc. is also a Delaware corporation that was formed on June 14, 2002. Alnylam Securities Corporation is a Massachusetts corporation that was formed on December 19, 2006. Alnylam Europe was incorporated in Germany in June 2000 under the name Ribopharma AG. The Company acquired Alnylam Europe in July 2003.

The accompanying consolidated financial statements reflect the operations of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Reclassifications

Reclassifications

Certain reclassifications have been made to prior years’ consolidated financial statements to conform to the 2012 presentation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Concentrations of Credit Risk and Significant Customers

Concentrations of Credit Risk and Significant Customers

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents and fixed income marketable securities. At December 31, 2012 and 2011, substantially all of the Company’s cash, cash equivalents and fixed income marketable securities were invested in money market mutual funds, commercial paper, corporate notes and U.S. government securities through highly rated financial institutions. Investments are restricted, in accordance with the Company’s investment policy, to a concentration limit per issuer.

To date, the Company’s revenues from collaborations have been generated from primarily F. Hoffmann-La Roche Ltd and certain of its affiliates (collectively, “Roche”) (which assigned its rights and obligations to Arrowhead Research Corporation (“Arrowhead”) in 2011), Takeda Pharmaceutical Company Limited (“Takeda”), and Novartis Pharma AG and one of its affiliates (collectively, “Novartis”). In addition, the Company and Medtronic, Inc. (“Medtronic”) formed a collaboration with CHDI Foundation, Inc. (“CHDI”) to advance ALN-HTT, a novel drug-device combination for the treatment of Huntington’s disease. Under this collaboration, CHDI agreed to initially fund approximately 50% of the costs of this program up to the point at which an investigational new drug application could be filed. In April 2012, the Company exercised its option under the Medtronic agreement to opt-out of the 50-50 expense/profit share arrangement of the ALN-HTT program and move to a royalty and milestone licensing structure. In connection with the Company’s opt-out, in May 2012, CHDI notified the Company and Medtronic that it would cease further funding of the ALN-HTT program pursuant to the terms of the CHDI agreement. The Company recorded the funding received from CHDI as a reduction to research and development expense. For the year ended December 31, 2012, the composition of the Company’s billed and unbilled collaboration receivables was entirely composed of amounts due from the U.S. Government for the wind-down of completed government contracts.

The following table summarizes customers that represent greater than 10% of the Company’s net revenues from research collaborators, for the periods indicated:

	Year Ended December 31,
	2012			2011			2010
Roche/Arrowhead		56	%		68	%		56	%
Takeda		33	%		27	%		22	%

The following table summarizes customers with amounts due that represent greater than 10% of the Company’s billed and unbilled collaboration receivables balance, at the periods indicated:

	At December 31,
	2012			2011
U.S. Government		100	%		*	%
CHDI		—			51	%
GSK		—			20	%
Medtronic		—			13	%

* Represents 10% or less

Fair Value Measurements

Fair Value Measurements

The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following tables present information about the Company’s assets that are measured at fair value on a recurring basis at December 31, 2012 and 2011, and indicate the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices (adjusted), interest rates and yield curves. Fair values determined by Level 3 inputs utilize unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The fair value hierarchy level is determined by the lowest level of significant input. Financial assets and liabilities measured at fair value on a recurring basis are summarized as follows, in thousands:

Description	At December 31, 2012		Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	50,213	$	50,213	$	—	$	—
Marketable securities (fixed income):
Corporate notes		91,523		—		91,523		—
U.S. Government obligations		60,661		—		60,661		—
Commercial paper		22,639		—		22,639		—
Marketable securities (Regulus equity holdings)		38,748		—		38,748		—
Total	$	263,784	$	50,213	$	213,571	$	—

Description	At December 31, 2011		Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents	$	67,024	$	67,024	$	—	$	—
Marketable securities (fixed income):
Corporate notes		104,839		—		104,839		—
U.S. Government obligations		73,722		—		73,722		—
Commercial paper		11,395		—		11,395		—
Marketable securities (equity holdings)		625		—		625		—
Total	$	257,605	$	67,024	$	190,581	$	—

For the years ended December 31, 2012 and 2011, there were no transfers between Level 1 and Level 2 financial assets. The carrying amounts reflected in the Company’s consolidated balance sheets for cash, billed and unbilled collaboration receivables, other current assets, accounts payable and accrued expenses approximate fair value due to their short-term maturities.

Investments in Marketable Securities

Investments in Marketable Securities

The Company invests its excess cash balances in short-term and long-term marketable debt and equity securities. The Company classifies its investments in marketable debt securities as either held-to-maturity or available-for-sale based on facts and circumstances present at the time it purchased the securities. At each balance sheet date presented, the Company classified all of its investments in debt and equity securities as available-for-sale. The Company reports available-for-sale investments at fair value at each balance sheet date and includes any unrealized holding gains and losses (the adjustment to fair value) in accumulated other comprehensive income (loss), a component of stockholders’ equity. Realized gains and losses are determined using the specific identification method and are included in other income. If any adjustment to fair value reflects a decline in the value of the investment, the Company considers all available evidence to evaluate the extent to which the decline is “other than temporary” and, if so, marks the investment to market through a charge to its consolidated statements of comprehensive loss. The Company did not record any impairment charges related to its fixed income marketable securities during the years ended December 31, 2012, 2011 or 2010. During 2011, the Company recorded an impairment charge of $0.6 million related to its former investment in equity securities of Tekmira Pharmaceuticals Corporation (“TPC”), as the decrease in the fair value of this investment was deemed to be other than temporary. The Company’s marketable securities are classified as cash equivalents if the original maturity, from the date of purchase, is 90 days or less, and as marketable securities if the original maturity, from the date of purchase, is in excess of 90 days. The Company’s cash equivalents are composed of money market funds, U.S. government obligations and commercial paper. At December 31, 2012, the Company accounts for its investment in Regulus as an available-for-sale marketable security. At December 31, 2012, the fair value of these equity securities was $38.7 million. As a result of the Regulus’ initial public offering, the Company’s carrying amount in these equity securities was $12.4 million, with a gross unrealized gain of $26.3 million recorded in other comprehensive income.

The Company obtains fair value measurement data for its marketable securities from independent pricing services. The Company performs validation procedures to ensure the reasonableness of this data. This includes meeting with the independent pricing services to understand the methods and data sources used. Additionally, the Company performs its own review of prices received from the independent pricing services by comparing these prices to other sources and confirming those securities are trading in active markets.

The following tables summarize the Company’s marketable securities at December 31, 2012 and 2011, in thousands:

	December 31, 2012
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial paper (Due within 1 year)	$	22,650	$	1	$	(12	)	$	22,639
Corporate notes (Due within 1 year)		41,249		23		(4	)		41,268
Corporate notes (Due after 1 year through 2 years)		50,322		5		(72	)		50,255
U.S. Government obligations (Due within 1 year)		7,500		—		—			7,500
U.S. Government obligations (Due after 1 year through 2 years)		53,168		2		(9	)		53,161
Total	$	174,889	$	31	$	(97	)	$	174,823

	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Commercial paper (Due within 1 year)	$	11,397	$	—	$	(2	)	$	11,395
Corporate notes (Due within 1 year)		51,273		19		(47	)		51,245
Corporate notes (Due after 1 year through 2 years)		53,592		50		(48	)		53,594
U.S. Government obligations (Due within 1 year)		13,532		2		—			13,534
U.S. Government obligations (Due after 1 year through 2 years)		60,202		7		(21	)		60,188
Equity securities		750		—		(125	)		625
Total	$	190,746	$	78	$	(243	)	$	190,581

Estimated Liability for Development Costs

Estimated Liability for Development Costs

The Company records accrued liabilities related to expenses for which service providers have not yet billed the Company with respect to products or services that the Company has received, specifically related to ongoing pre-clinical studies and clinical trials. These costs primarily relate to third-party clinical management costs, laboratory and analysis costs, toxicology studies and investigator fees. The Company has multiple product candidates in concurrent pre-clinical studies and clinical trials at multiple clinical sites throughout the world. In order to ensure that the Company has adequately provided for ongoing pre-clinical and clinical development costs during the period in which the Company incurs such costs, the Company maintains an accrual to cover these expenses. The Company updates the estimate for this accrual on at least a quarterly basis. The assessment of these costs is a subjective process that requires judgment. Upon settlement, these costs may differ materially from the amounts accrued in the Company’s consolidated financial statements. The Company’s historical accrual estimates have not been materially different from the Company’s actual costs.

Revenue Recognition

Revenue Recognition

The Company has entered into collaboration agreements with leading pharmaceutical and life sciences companies, including Novartis, Biogen Idec Inc. (“Biogen Idec”), Roche, Takeda, Kyowa Hakko Kirin Co., Ltd. (“Kyowa Hakko Kirin”), Cubist Pharmaceuticals, Inc. (“Cubist”), Monsanto Company (“Monsanto”) Genzyme Corporation (“Genzyme”) and The Medicines Company (“MedCo”). The terms of the Company’s collaboration agreements typically include non-refundable license fees, funding of research and development, payments based upon achievement of clinical and pre-clinical development milestones, regulatory milestones, manufacturing services, sales milestones and royalties on product sales.

In January 2011, the Company adopted new authoritative guidance on revenue recognition for multiple element arrangements. The guidance, which applied to multiple element arrangements entered into or materially modified on or after January 1, 2011, amended the criteria for separating and allocating consideration in a multiple element arrangement by modifying the fair value requirements for revenue recognition and eliminating the use of the residual method. The fair value of deliverables under the arrangement may be derived using a “best estimate of selling price” if vendor specific objective evidence and third-party evidence is not available. Deliverables under the arrangement could be considered separate units of accounting provided that (i) a delivered item has value to the customer on a standalone basis and (ii) if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in the control of the vendor. The new guidance did not change the criteria for standalone value. As a biotechnology entity with unique and specialized delivered and undelivered performance obligations, the Company has been unable to demonstrate standalone value in its multiple element arrangements. For example, the Company applied the new rules to collaborations executed with Monsanto and Genzyme during 2012, but it was unable to demonstrate standalone value. In addition, the Company has not materially modified any of its multiple element arrangements. As such, the Company will continue to account for other license and collaboration agreements under previously issued revenue recognition guidance for multiple element arrangements, as described below.

Non-refundable license fees are recognized as revenue upon delivery of the license only if the Company has a contractual right to receive such payment, the contract price is fixed or determinable, the collection of the resulting receivable is reasonably assured and the Company has no further performance obligations under the license agreement. Multiple element arrangements, such as license and development arrangements, are analyzed to determine whether the deliverables, which often include a license and performance obligations such as research and steering committee services, can be separated or whether they must be accounted for as a single unit of accounting. The Company recognizes upfront license payments as revenue upon delivery of the license only if the license has standalone value and the fair value of the undelivered performance obligations, typically including research and/or steering committee services, can be determined. If the fair value of the undelivered performance obligations can be determined, such obligations are accounted for separately as such obligations are fulfilled. If the license is considered to either not have standalone value or have standalone value but the fair value of any of the undelivered performance obligations cannot be determined, the arrangement would then be accounted for as a single unit of accounting and the license payments and payments for performance obligations are recognized as revenue over the estimated period of when the performance obligations are performed.

Whenever the Company determines that an arrangement should be accounted for as a single unit of accounting, the Company determines the period over which the performance obligations will be performed and revenue will be recognized. Revenue is recognized using either a proportional performance or straight-line method. The Company recognizes revenue using the proportional performance method when the level of effort required to complete its performance obligations under an arrangement can be reasonably estimated and such performance obligations are provided on a best-efforts basis. Direct labor hours or full-time equivalents are typically used as the measure of performance. The amount of revenue recognized under the proportional performance method is determined by multiplying the total payments under the contract, excluding royalties and payments contingent upon achievement of milestones, by the ratio of level of effort incurred to date to estimated total level of effort required to complete the Company’s performance obligations under the arrangement. Revenue is limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned, as determined using the proportional performance method, as of the period ending date.

If the Company cannot reasonably estimate the level of effort to complete its performance obligations under an arrangement, the Company recognizes revenue under the arrangement on a straight-line basis over the period the Company is expected to complete its performance obligations. Revenue is limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned, as determined using the straight-line method, as of the period ending date.

Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations under an arrangement. Steering committee services that are not inconsequential or perfunctory and that are determined to be performance obligations are combined with other research services or performance obligations required under an arrangement, if any, in determining the level of effort required in an arrangement and the period over which the Company expects to complete its aggregate performance obligations.

Many of the Company’s collaboration agreements entitle it to additional payments upon the achievement of performance-based milestones. These milestones are generally categorized into three types; development milestones which are generally based on the advancement of the Company’s pipeline and initiation of clinical trials, regulatory milestones which are generally based on the submission, filing or approval of regulatory applications such as a new drug application in the United States, and commercialization milestones which are generally based on meeting specific thresholds of sales in certain geographic areas. If the achievement of a milestone is considered probable at the inception of the collaboration, the related milestone payment is included with other collaboration consideration, such as upfront fees and research funding, in the Company’s revenue model. Milestones that are tied to regulatory approval are not considered probable of being achieved until such approval is received. Milestones tied to counter-party performance are not included in the Company’s revenue model until the performance conditions are met.

The Company performs an assessment to determine whether a substantive milestone exists at the inception of its collaborative arrangements. In evaluating if a milestone is substantive, the Company considers whether uncertainty exists as to the achievement of the milestone event at the inception of the arrangement, the achievement of the milestone involves substantive effort and can only be achieved based in whole or part on the performance or the occurrence of a specific outcome resulting from the Company’s performance, the amount of the milestone payment appears reasonable either in relation to the effort expected to be expended or to the projected enhancement of the value of the delivered items, there is any future performance required to earn the milestone, and the consideration is reasonable relative to all deliverables and payment terms in the arrangement. When a substantive milestone is achieved, the accounting rules permit the Company to recognize revenue related to the milestone payment in its entirety.

To date, the Company has not recorded any substantive milestones under its collaborations because the Company has not identified any milestones that meet the required criteria listed above. The Company has deferred recognition of payments for achievement of non-substantive milestones and recognized revenue over the estimated period of performance applicable to each collaborative arrangement. As these milestones are achieved, the Company will recognize as revenue a portion of the milestone payment, which is equal to the percentage of the performance period completed when the milestone is achieved, multiplied by the amount of the milestone payment, upon achievement of such milestone. The Company will recognize the remaining portion of the milestone payment over the remaining performance period under the proportional performance method or on a straight-line basis.

For revenue generating arrangements where the Company, as a vendor, provides consideration to a licensor or collaborator, as a customer, the Company applies the accounting standard that governs such transactions. This standard addresses the accounting for revenue arrangements where both the vendor and the customer make cash payments to each other for services and/or products. A payment to a customer is presumed to be a reduction of the selling price unless the Company receives an identifiable benefit for the payment and it can reasonably estimate the fair value of the benefit received. Payments to a customer that are deemed a reduction of selling price are recorded first as a reduction of revenue, to the extent of both cumulative revenue recorded to date and probable future revenues, which include any unamortized deferred revenue balances, under all arrangements with such customer, and then as an expense. Payments that are not deemed to be a reduction of selling price are recorded as an expense.

The Company evaluates its collaborative agreements for proper classification in its consolidated statements of comprehensive loss based on the nature of the underlying activity. Transactions between collaborators recorded in the Company’s consolidated statements of comprehensive loss are recorded on either a gross or net basis, depending on the characteristics of the collaborative relationship. The Company generally reflects amounts due under its collaborative agreements related to cost-sharing of development activities as a reduction of research and development expense.

Amounts received prior to satisfying the above revenue recognition criteria are recorded as deferred revenue in the accompanying consolidated balance sheets. Although the Company follows detailed guidelines in measuring revenue, certain judgments affect the application of its revenue policy. For example, in connection with the Company’s existing collaboration agreements, the Company has recorded on its balance sheet short-term and long-term deferred revenue based on its best estimate of when such revenue will be recognized. Short-term deferred revenue consists of amounts that are expected to be recognized as revenue in the next 12 months. Amounts that the Company expects will not be recognized within the next 12 months are classified as long-term deferred revenue. However, this estimate is based on the Company’s current operating plan and, if its operating plan should change in the future, the Company may recognize a different amount of deferred revenue over the next 12-month period.

The estimate of deferred revenue also reflects management’s estimate of the periods of the Company’s involvement in certain of its collaborations. The Company’s performance obligations under these collaborations consist of participation on steering committees and the performance of other research and development services. In certain instances, the timing of satisfying these obligations can be difficult to estimate. Accordingly, the Company’s estimates may change in the future. Such changes to estimates would result in a change in revenue recognition amounts. If these estimates and judgments change over the course of these agreements, it may affect the timing and amount of revenue that the Company recognizes and records in future periods. At December 31, 2012, the Company had short-term and long-term deferred revenue of $31.4 million and $100.9 million, respectively, related to its collaborations.

The Company recognizes revenue under government cost reimbursement contracts as the Company performs the underlying research and development activities.

Income Taxes

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities reflect the impact of temporary differences between amounts of assets and liabilities for financial reporting purposes and such amounts as measured under enacted tax laws. A valuation allowance is required to offset any net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax asset will not be realized.

The Company accounts for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors that include, but are not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. The Company’s policy is to accrue interest and penalties related to unrecognized tax positions in income tax expense. As of December 31, 2012, the Company has not recorded significant interest and penalty expense related to uncertain tax positions.

Research and Development Costs

Research and Development Costs

The Company expenses research and development costs as incurred. Included in research and development costs are wages, benefits and other operating costs, facilities, supplies, external services, clinical trial and manufacturing costs, and overhead directly related to the Company’s research and development operations, as well as costs to acquire technology licenses.

The Company has entered into several license agreements for rights to utilize certain technologies. The terms of the licenses may provide for upfront payments, annual maintenance payments, milestone payments based upon certain specified events being achieved and royalties on product sales. The Company charges costs to acquire and maintain licensed technology that has not reached technological feasibility and does not have alternative future use to research and development expense as incurred. During the years ended December 31, 2012, 2011 and 2010, the Company charged to research and development expense costs associated with license fees of $5.7 million, $1.4 million and $2.4 million, respectively.

Accounting for Stock-Based Compensation

Accounting for Stock-Based Compensation

The Company has stock incentive plans and an employee stock purchase plan under which it grants equity instruments. The Company accounts for all stock-based awards granted to employees at their fair value and generally recognizes compensation expense over the vesting period of the award. Determining the amount of stock-based compensation to be recorded requires the Company to develop estimates of fair values of stock options as of the grant date. The Company calculates the grant date fair values using the Black-Scholes valuation model. The Company’s expected stock price volatility assumption is based on a combination of the historical and implied volatility of the Company’s publicly traded stock.

For stock-based awards granted to non-employees, the Company generally recognizes compensation expense over the vesting period of the award, which is generally the period during which services are rendered by such non-employees. At the end of each financial reporting period prior to vesting, the Company re-measures the value of these stock-based awards (as calculated using the Black-Scholes option-pricing model) using the then-current fair value of the Company’s common stock. Stock options granted by the Company to non-employees, other than members of the Company’s Board of Directors and Scientific Advisory Board members, generally vest over the service period.

The fair value of restricted stock awards granted to employees is based upon the quoted closing market price per share on the date of grant, adjusted for assumed forfeitures. For performance-based restricted stock awards, the value of the awards is measured when the Company determines that the achievement of such performance conditions is deemed probable. This determination requires significant judgment by management. Expense is recognized over the vesting period, commencing when the Company determines that it is probable that the awards will vest.

Accounting for Joint Venture

Accounting for Joint Venture

From the formation of Regulus in September 2007 to October 2012, the Company accounted for its interest in Regulus using the equity method of accounting. The Company reviewed the consolidation guidance that defines a variable interest entity (“VIE”) and concluded that Regulus qualified as a VIE during such time period. The Company recorded any gains or losses recognized from the issuance of stock by its equity method investee as other income (expense) in its consolidated statements of comprehensive loss. The Company did not consolidate Regulus’ financial results as the Company lacked the power to direct the activities that could significantly impact the economic success of Regulus. In October 2012, Regulus completed an initial public offering, resulting in the Company’s ownership percentage decreasing from approximately 44% to 17% of Regulus’ outstanding common stock. Based upon the Company’s new ownership percentage of 17%, as well as qualitative factors, the Company does not believe that it has the ability to exercise significant influence over the operating decisions and financial policies of Regulus and has therefore discontinued the equity method of accounting for Regulus. Accordingly, beginning in October 2012, the Company has accounted for its investment in Regulus as an available-for-sale marketable security. For additional details on the accounting for the Company’s investment in Regulus, see Note 10.

Comprehensive Loss

Comprehensive Loss

Comprehensive loss is comprised of net loss and certain changes in stockholders’ equity that are excluded from net loss. The Company includes foreign currency translation adjustments in other comprehensive loss for Alnylam Europe as the functional currency is not the United States dollar. The Company also includes unrealized gains and losses on certain marketable securities in other comprehensive loss.

Net Loss Per Common Share

Net Loss Per Common Share

The Company computes basic net loss per common share by dividing net loss by the weighted average number of common shares outstanding. The Company computes diluted net loss per common share by dividing net loss by the weighted average number of common shares and dilutive potential common share equivalents then outstanding. Potential common shares consist of shares issuable upon the exercise of stock options (using the treasury stock method), and unvested restricted stock awards. Because the inclusion of potential common shares would be anti-dilutive for all periods presented, diluted net loss per common share is the same as basic net loss per common share.

The following table sets forth for the periods presented the potential common shares (prior to consideration of the treasury stock method) excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive, in thousands:

	December 31,
	2012		2011		2010
Options to purchase common stock		8,932		9,779		8,975
Unvested restricted common stock		604		312		113
		9,536		10,091		9,088

Segment Information

Segment Information

The Company operates in a single reporting segment, the discovery, development and commercialization of RNAi therapeutics.

Subsequent Events

Subsequent Events

The Company evaluated all events or transactions that occurred after December 31, 2012 up through the date these consolidated financial statements were issued. During this period, the Company did not have any material recognized subsequent events. However, the Company did have the following nonrecognized subsequent events, which are more fully described in Notes 3, 7 and 12:

• In January 2013, the Company sold an aggregate of 9,200,000 shares of its common stock through an underwritten public offering at a price to the public of $20.13 per share. See Note 7.

• In January 2013, the Company and MedCo entered into a license and collaboration agreement (the “MedCo Agreement”), pursuant to which the Company granted to MedCo an exclusive license to develop and commercialize specified RNAi therapeutics targeting proprotein convertase subtilisin/kexin type 9 (“PCSK9”). See Note 12.

• In February 2013, Cubist notified the Company that it would not exercise its opt-in right for the Company’s ALN-RSV01 program for the treatment of respiratory syncytial virus infection in lung transplant patients. In light of this determination, the parties mutually agreed to terminate their license and collaboration agreement entered into in January 2009 (the “Cubist Agreement”). See Note 3.

• On February 19, 2013, the Company and Genzyme entered into an amendment to their license and collaboration agreement (the “Genzyme Agreement”). See Note 3.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard that clarifies the application of certain existing fair value measurement guidance and expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. This standard is effective on a prospective basis for annual and interim reporting periods beginning on or after December 15, 2011. The Company adopted this amendment on January 1, 2012. The adoption of this new standard did not have a material impact on the Company’s consolidated financial statements.

In June 2011, the FASB issued an amendment to the accounting guidance for presentation of comprehensive income. Under the amended guidance, a company may present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In either case, a company is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income and a total amount for comprehensive income. For public companies, the amendment is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, and shall be applied retrospectively. The Company adopted this amendment on January 1, 2012. Other than a change in presentation, the adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

In February 2013, the FASB issued amendments to the accounting guidance for presentation of comprehensive income to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments do not change the current requirements for reporting net income or other comprehensive income, but do require an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where the net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under GAAP that provide additional detail about these amounts. For public companies, these amendments are effective prospectively for reporting periods beginning after December 15, 2012. Other than a change in presentation, the Company does not believe the adoption of this guidance will have a material impact on the Company’s consolidated financial statements.