Alien Technology Corp. of Morgan Hill, Calif., is at it again.

The 14-year-old — which sells UHF Radio Frequency Identification (RFID) products and services –  is raising a $40 million pay-to-play Series I, an amount that will bring its total funding to a whopping $302 million, according to Thomson Reuters (owner of PEHub).

It’s an awful lot of money for a venture-backed company. But unlike other, mature outfits that have raised money from seemingly everyone in the Valley because their old backers eventually threw up their hands (mobile email company Visto jumps to mind), Alien’s investors seem to sticking with the company. At least, as of its most recent round, in April of last year, New Enterprise Associates, CMEA Ventures, and Rho Ventures have returned round after round.

So has Advanced Equities Capital Partners, a Chicago-based investment bank and broker dealer that marries wealthy individuals with late-stage venture deals. In fact, in a capital call form to investors, Advanced Equities told Alien shareholders that it was in their “best interest!” to “fully participate” in the round, which “is structured to
provide significant benefits to shareholders that purchase their pro rata shares of the Financing (including an effective repricing of all of the [Advanced Equities’] equity securities of Alien to $1.00 per share).”

There’s no question that continuing to bet on Alien is giant gamble for everyone involved — especially since IPO conditions forced it to yank a planned offering in 2007. But there’s also a lot at stake. ABI Research, headquartered in Oyster Bay, New York, estimates that in 2008, combined revenues from RFID hardware, software, and services will reach $4.05 billion. It predicts in five years, revenues will hit nearly $8 billion.

As Alien’s backers know, the good news is that Alien is one of the biggest suppliers of RFID tags in the world, selling tags that contain minuscule chips with unique ID numbers which allow its customers to track their goods, from pieces of luggage to retailer inventories.

Within the RFID universe, Alien is also a leader in what are called “passive” RFID tags, as opposed to “active” tags. Active tags have batteries and can handle complex tasks, like watching over security of a lock, and issuing an alarm if necessary. They also cost between $5 and $30 per tag. Passive tags require no batteries and are powerless to transmit data. Instead, a device called a reader sends out a query for information from up to 30 feet away, and the passive tag has just enough power to squeak out a reply, then essentially die again. They cost around 10 cents — which makes a big difference in terms of the opportunities they can address. (Cheaper = more.)

The bad news, explains ABI’s RFID analyst Pete Poorman, is that just as the long-awaited promise of RFID nears fruition, competition is heating up. Poorman says a crop of smaller companies, like LA-based Mojix, are emerging to compete with likes of Alien as the price of tags and readers fall. Then there’s Seattle-based Impinj, which competes head-to-head with Alien on less venture capital ($122 million since its 2000 founding), and Intermec, which raised $3.3 million before going public in 1997 and is now a very big company. That’s saying nothing of Toronto-based Sirit, or of Motorola, which acquired Symbol, which acquired Alien’s archrival, Matrix, in 2004. “If you position Alien against Motorola, there’s a real challenge in distribution and support channels,” says Poorman. “Alien has a network of partners in various geographies, but Motorola sells direct to the entire world. It’s just much, much larger and has more global presence as a result.”

Alien doesn’t disclose revenues but its sales were around $20 million in 2005, according to Thomson Reuters. Motorola, meanwhile, has a $16.5 billion market cap.

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New England’s public life sciences firms were feeling particularly newsworthy this last week, it seems. But plenty of private firms are represented in this first item:

—Wade uncovered yet another thriving New England tech cluster: The thirty-odd “Health 2.0″ firms using the Web to deliver various kinds of healthcare services. The next day he profiled one such company, Newton, MA’s InnovationRx, that uses e-mail, text messages, and phone calls to help patients remember to take their medicine.

—At an annual meeting, shareholders rejected billionaire investor Carl Icahn’s bid to put his people on the board of Cambridge, MA-based Biogen Idec (NASDAQ: BIIB).

—Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ: ALNY) inked a deal worth up to $93 million, plus royalties, with Japan’s Kyowa Hakko Kogyo to commercialize an RNAi-based treatment for respiratory syncytial virus in Japan and other major Asian markets.

—ImmunoGen (NASDAQ: IMGN) of Waltham, MA, raised about $25 million in a sale of 7.8 million shares of stock to Ziff Asset Management.

—GTC Biotherapeutics of Framingham, MA, forged a partnership worth as much as $257 million with Deerfield, IL’s Ovation Pharmaceuticals. The firms will work together to try to bring GTC’s ATryn—an anti-clotting and anti-inflammatory drug produced in the milk of genetically engineered goats–to market in the United States.

—Cambridge, MA-based Genzyme (NASDAQ: GENZ) and Isis Pharmaceuticals (NASDAQ: ISIS) of Carlsbad, CA, finalized the terms of their partnership to develop Isis’s cholesterol-lowering drug, mipomersen. The new terms shift $50 million more of the development costs to Isis.

—RXi Pharmaceuticals (NASDAQ: RXII), a Worcester, MA-based firm seeking to commercialize RNAi-based medicines, raised about $8.7 million in a private placement of stock.

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