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Why Is Alnylam (ALNY) Up 3.1% Since Last Earnings Report?

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Interpublic (IPG) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

A month has gone by since the last earnings report for Alnylam Pharmaceuticals (ALNY). Shares have added about 3.1% 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 Q4 Earnings and Revenues Beat Estimates

Alnylam incurred adjusted loss of $1.82 per share, wider than the year-ago loss of $1.20 but narrower than the Zacks Consensus Estimate of a loss of $1.97.

Revenues declined 44.5% year over year to $21 million but beat the Zacks Consensus Estimate of $12.53 million. The top line in the quarter included net product revenues of $12.1 million from sales of Onpattro (patisiran), which was approved by the FDA in August 2018. The decline in sales was due to a significant drop in collaboration revenues, which came in at $9 million compared with $37.9 million in the year-ago period.

Quarter in Detail

The company launched its sole commercial drug, Onpattro as a treatment for polyneuropathy of hereditary transthyretin-mediated amyloidosis (hATTR amyloidosis) in adults in the United States and Europe, and made efforts to make it accessible to a larger patient population. The company is currently working on pricing & reimbursement agreement in both the territories and has signed several of them. It is also looking to expand in Asian and Latin American countries.

Adjusted research and development (R&D) expenses increased 14.8% from the year-ago period to $118.1 million. Adjusted selling, general and administrative (SG&A) expenses increased 69.7% from the year-ago quarter to $93.7 million.

Alnylam ended the year with $1.13 billion in cash, cash equivalents and marketable debt securities and restricted investments (excluding equity securities). In January 2019, the company sold its common stock through a public offering adding additional $382 million to its coffers.

Full Year Results

The company reported total revenues of $74.9 million in 2018, down 16.7% year-over-year, and adjusted loss was $6.21 per share compared to $4.40 per share in 2017.

2019 Guidance

Alnylam provided its guidance for adjusted operating expenses in 2019. The company expects adjusted SG&A expense to be in the range of $390 to $420 million while adjusted R&D expense is expected to be $520-$560 million. The company also expects its current liquid resources to fund its operations approximately for the next two years at the current pace of cash burn.

Pipeline Updates

During the quarter, the company obtained regulatory alignment with the FDA on the design of its phase III study, which will evaluate Onpattro in hereditary and wild-type ATTR amyloidosis patients with cardiomyopathy. The study is expected to start in mid-2019. The drug is also under review in Japan, Canada and Switzerland.

During the quarter, the company initiated the HELIOS-A study on vutrisiran (ALN-TTRsc02), a subcutaneously administered investigational RNAi therapeutic as a treatment for hATTR amyloidosis with polyneuropathy. Alnylam also plans to initiate another phase III study, HELIOS-B on the candidate in hereditary and wild-type ATTR amyloidosis cardiomyopathy in late 2019.

The company initiated a rolling submission of a new drug application (“NDA”) for givosiran, an investigational RNAi therapeutic in development for the treatment of acute hepatic porphyrias (AHPs) based on interim results from phase III ENVISION study. It plans to pursue full approval based on complete results – now expected in March 2019 – from the ENVISION phase III study. The full clinical sections are expected to be submitted in mid-2019, assuming positive results.

Alnylam initiated 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 late 2019, and, if positive, will submit filings for global regulatory approvals starting in early 2020.

In October 2018, Alnylam’s partner, The Medicines Company announced that the Independent Data Monitoring Committee for the ongoing inclisiran phase III clinical trials (ORION 9, 10, and 11) conducted its fourth planned review of safety and efficacy data from the studies and recommended that the studies continue without modification. The company’s another partner, Sanofi is currently enrolling patients in phase III ATLAS program evaluating fitusiran for treating hemophilia An or B.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months.

VGM Scores

At this time, Alnylam has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

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

Outlook

Alnylam has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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