Alnylam Pharma Revs In-Line

Zacks

Alnylam Pharmaceuticals Inc.’s (ALNY) second quarter 2012 net loss of 25 cents per share was narrower than the year-ago loss of 33 cents per share. Higher revenues coupled with lower costs were primarily responsible for the lower loss incurred by the company in the second quarter of 2012. However, the loss was wider than the Zacks Consensus Estimate of a loss of 18 cents per share.

Revenues in the reported quarter increased 1.3% to $20.9 million. Revenues were in line with the Zacks Consensus Estimate of $21 million.

Quarter in Details
    
Revenues included $14 million from the company’s alliance with Roche Holdings Ltd. (RHHBY), $5.5 million from its partnership with Takeda Pharmaceuticals, in addition to $1.4 million of expense reimbursement and amortization revenues from Cubist Pharmaceuticals Inc. (CBST), among others.

Research and development (R&D) expenses fell approximately 14.1% to $21.7 million. The reduction was primarily on account of the lower costs incurred on the ALN-RSV and ALN-VSP programs. The company expects R&D expenses to remain at the same level as the second quarter in the remaining two quarters of 2012.

General and administrative (G&A) expenses in the reported quarter increased approximately 33.2% year over year to $11.2 million. The company expects G&A expenses to remain at the same level in the remaining two quarters of 2012. Interest income remained flat at $0.3 million for the second quarter of 2012.

2012 Cash Balance Projection

Alnylam expects to end 2012 with cash, cash equivalents and total marketable securities balance in excess of $250 million. At the end of the second quarter of 2012, the company had cash, cash equivalents and total marketable securities worth $292.8 million.  

Our Recommendation

We are encouraged by the impressive results demonstrated by Alnylam’s candidate ALN-TTR02 in an early stage study. The candidate is being developed for the treatment of TTR-mediated amyloidosis and is expected to enter into pivotal studies in 2013.

We believe that investor focus will remain on Alnylam’s pipeline going forward. We are impressed by the company’s “5X15” initiative. We currently have an Outperform recommendation on Alnylam. The stock carries Zacks #2 Rank (Buy rating) in the short run.

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