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Why Is Alnylam (ALNY) Up 2.3% Since Last Earnings Report?

Zacks Equity Research

It has been about a month since the last earnings report for Alnylam Pharmaceuticals (ALNY). Shares have added about 2.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Alnylam due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Alnylam's Q2 Earnings and Revenues Miss Estimates

Alnylam incurred adjusted loss of $1.83 per share in the second quarter of 2019, wider than the year-ago quarter’s loss of $1.61 and also the Zacks Consensus Estimate of a loss of $1.81.

Revenues increased 49.5% year over year to $44.7 million but missed the Zacks Consensus Estimate of $47 million. The top line in the quarter included net product revenues of $38.2 million from the sales of Onpattro (patisiran), which was approved by the FDA last August. Net revenues from collaborators were $6.5 million in the second quarter compared with $29.9 million a year ago.

Quarter in Detail

Alnylam received the marketing authorization approvals for Onpattro in Japan and Canada. With these approvals and multiple pricing or reimbursement approvals enabling its commercial sales in more than 10 countries across the Canada, Europe, Middle East and Africa (CEMEA) region, the company expanded its global footprint.

Adjusted research and development (R&D) expenses increased 17.9% from the year-ago period to $148.6 million. While adjusted selling, general and administrative (SG&A) expenses surged 31.4% from the year-ago quarter to $97.4 million.

2019 Guidance

Alnylam lowered its guidance for adjusted operating expenses in 2019. The company expects adjusted SG&A expenses to be $390-$400 million compared with the previous guidance of $390-$410 million. Adjusted R&D expenses are expected to be $550-$575 million compared with the prior guidance of $550-$590 million. The company also expects its current liquid resources to fund its operations for multiple years at the current pace of cash burn.

Pipeline Updates

The company expects to initiate the APOLLO-B phase III study on Onpattro in ATTR amyloidosis patients with cardiomyopathy in mid-2019.

During the quarter, Alnylam continued enrollment in the HELIOS-A phase III study on vutrisiran (ALN-TTRsc02), a subcutaneously-administered, investigational RNAi therapeutic for the treatment of hATTR amyloidosis with polyneuropathy. The company also obtained a regulatory alignment from the FDA on the design of another phase III study, HELIOS-B, for the candidate to treat hereditary and wild-type ATTR amyloidosis cardiomyopathy and expects to start the study in late 2019.

The company presented positive results from the ENVISION phase III study of givosiran, an investigational RNAi therapeutic in the development ofor the treatment of acute hepatic porphyrias (AHPs). Alnylam completed the submission of a new drug application (NDA) to the FDA and a Marketing Authorization Application (MAA) to the European Medicines Agency for the candidate. Both agencies have accepted the applications. The FDA has already granted the NDA a Priority Review status and set an action date of Feb 4, 2020. The regulatory body is not planning to hold an advisory committee meeting to discuss this application.

Alnylam continued enrollment in the ILLUMINATE-A, a global phase III study of lumasiran in children and adults with primary hyperoxaluria type 1 (PH1). The company expects to report top-line results from the study in the second half of 2019. It initiated ILLUMINATE-B, a phase III pediatric study of lumasiran in PH1 patients aged under six years. It expects to initiate the ILLUMINATE-C phase III study of the drug in PH1 patients with severe renal impairment in the second half of 2019.

Alnylam’s partner The Medicines Company reported new results for inclisiran, an investigational RNAi therapeutic in developing the treatment of hypercholesterolemia. The company intends to report initial top-line results from the ORION-9, 10 and 11 phase III studies of inclisiran and file an NDA in the second half of 2019, anticipating positive results.

Another partner of Alnylam, Sanofi, reported new results from the phase II OLE study evaluating fitusiran for the treatment of hemophilia.

Collaborations

The company inked a broad collaboration deal with Regeneron Pharmaceuticals, Inc. to discover, develop and commercialize RNAi therapeutics focused on ocular and CNS diseases.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

VGM Scores

Currently, Alnylam has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of F on the value side, putting it in the lowest quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Alnylam has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.



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