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Alnylam Narrows Loss, Sales Fall

Zacks Equity Research

Alnylam Pharmaceuticals Inc.’s (ALNY) first quarter 2013 loss of 15 cents per share was narrower than the Zacks Consensus Estimate of a loss of 31 cents and the year-ago loss of 25 cents per share. The narrower loss was primarily due to lower expenses.

Quarter in Detail

Revenues for the reported quarter fell 9.4% from the prior year to $18.6 million. Revenues were ahead of the Zacks Consensus Estimate of $13 million. Revenues in the first quarter of 2013 included $8.9 million from the company’s alliance with a couple of companies, in addition to the recognition of the remaining $9.7 million of collaboration revenues from the company’s former alliance with Cubist Pharmaceuticals Inc. (CBST).

Alnylam’s net revenues from research collaborators are expected to decline in the remaining quarters of 2013 as the company has already recognized its collaboration revenues from Cubist during the reported quarter.

Research and development (R&D) expenses went up approximately 5.2% to $22.2 million. The increase in R&D expenses was primarily due to the company’s efforts to advance its pipeline.

General and administrative (G&A) expenses in the reported quarter decreased approximately 39.8% year over year to $6.3 million. The decrease in G&A expenses was primarily attributable to lower consulting and professional services expenses. Alnylam expects G&A expenses to remain consistent for the rest of the year.

Public Offering

Alnylam raised approximately $174 million from a public offering of shares of its common stock during the quarter. The company intends to utilize the net proceeds from the transaction to develop its pipeline.

Reiterates 2013 Cash Balance Projection

Alnylam still expects to end 2013 with cash, cash equivalents and total marketable securities in excess of $320 million.

Alnylam is progressing well with its pipeline. The company is expecting several study results based on its ribo nucleic acid interference therapeutic candidates in the coming quarters. We expect investor focus to remain on the successful development of its pipeline.

Alnylam, a biopharmaceutical company, presently carries a Zacks Rank #2 (Buy). However, biopharmaceutical stocks such as Athersys Inc. (ATHX) and Incyte Corporation (INCY) look better positioned carrying a Zacks Rank #1 (Strong Buy).

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