Alnylam Widens Q4 Loss


Alnylam Pharmaceuticals Inc.’s (ALNY) fourth quarter 2013 loss of 51 cents per share was wider than the Zacks Consensus Estimate of a loss of 48 cents and the year-ago loss of 24 cents per share. The wider loss was primarily due to higher research and development expenses.

Revenues for the reported quarter were up 27.7% to $10.8 million. Revenues in the quarter benefited from higher collaboration revenues. The top line was also above the Zacks Consensus Estimate of $9 million.

Alnylam’s 2013 loss of $1.43 per share was wider than the Zacks Consensus Estimate of a loss of $1.35 and the year-ago loss of $1.05 per share. Revenues for the year were down 29.3% from the prior year to $47.2 million. Revenues were however above the Zacks Consensus Estimate of $46 million.

Quarter in Detail

Revenues in the fourth quarter of 2013 included $5.5 million from its collaboration with Takeda Pharmaceutical Company Limited (TKPYY), in addition to $2.7 million from the company’s alliance with a couple of other companies. Alnylam also recognised $2.6 million revenues from other sources.

Research and development (R&D) expenses went up approximately 48.2% to $32.1 million. The increase in R&D expenses was primarily due to an increase in license fees related to the initiation of the phase III study of patisiran (familial amyloidotic polyneuropathy).

General and administrative (G&A) expenses in the reported quarter decreased approximately 18.0% year over year to $8.3 million. The decrease in G&A expenses was primarily attributable to lower consulting and professional services expenses.

2014 Outlook

Alnylam expects its R&D expenses to increase significantly in 2014 from the 2013 figure of $113 million. G&A expenses are also expected to increase slightly from $27.2 million in 2012.

Alnylam expects to end 2014 with cash, cash equivalents and total marketable securities in excess of $825 million.

Pipeline Update

Alnylam is evaluating patisiran in the phase III APOLLO study in transthyretin-mediated amyloidosis (:ATTR) patients suffering from familial amyloidotic polyneuropathy (:FAP). The primary objective of the study is to measure the difference in the change in mNIS+7 score from baseline between patients under patisiran treatment and those under placebo. The candidate enjoys Fast Track designation in the U.S.

Alnylam also initiated a phase II study on ALN-TTRsc in patients suffering from familial amyloidotic cardiomyopathy last year. ALN-TTRsc is a ribo nucleic acid interference (RNAi) therapeutic targeting the TTR gene that is being developed for the treatment of ATTR.
Apart from these candidates Alnylam also has ALN-AT3 (hemophilia), ALN-AS1 (hepatic porphyrias) and ALN-PCSsc (hypercholesterolemia) in its pipeline.

Our Take

We are impressed by Alnylam’s efforts to develop its pipeline. The company also has multiple pipeline related activities in the coming quarters. We expect investor focus to remain on the development of the pipeline.

We are also encouraged by Alnylam’s deal with Sanofi (SNY) which will allow the latter to use Alnylam’s technology. Moreover the deal ensures continued pipeline progress apart from boosting Alnylam’s balance sheet.

Alnylam, a biopharmaceutical company, presently carries a Zacks Rank #2 (Buy). A better-ranked stock in the same sector is Alexion Pharmaceuticals, Inc. (ALXN). Alexion holds a Zacks Rank #1 (Strong Buy).

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