Alnylam Delivers In-Line Numbers - Analyst Blog
February 13 2012 - 4:00AM
Zacks
Alnylam Pharmaceuticals Inc.’s (ALNY) fourth
quarter 2011 loss of 33 cents per share was in line with the Zacks
Consensus Estimate. The loss was however wider than the year-ago
loss of 16 cents per share. Lower revenues and higher general and
administrative (G&A) expenses led to widening losses.
Revenues for the reported quarter fell 3.3% from the prior year
to $20.5 million. Revenues were almost in line with the Zacks
Consensus Estimate of $21 million.
In 2011, Alnylam reported total revenue of $82.8 million, below
2010 revenue of $100.0 million. In 2011, adjusted loss per share
was $1.36 versus a loss of $1.04 per share in 2010. The Zacks
Consensus Estimates were $83 million for revenue and $1.35 for loss
per share.
Quarterly Details
Revenues in the quarter included $14 million from the company’s
alliance with Roche (RHHBY), $5.5 million from
Alnylam‘s partnership with Takeda Pharmaceuticals, in addition to
$1.0 million of expense reimbursement, amortization revenues and
license fees from Cubist Pharmaceuticals (CBST),
Novartis (NVS) and other sources.
Research and development (R&D) costs declined approximately
10.3% to $23.4 million. The lower R&D was primarily due to
reduced spending on pre-clinical costs concerning the ALN-PCS
programs and presence of restructuring costs in prior-year results
related to the September 2010 corporate restructuring.
General and administrative (G&A) expenses in the reported
quarter were up 42.7% over the prior-year quarter to $10.7 million
due to higher legal costs.
2012 Guidance
Alnylam expects to exit 2012 with a cash balance of more than
$180 million. Alnylam ended 2011 with a cash balance of $261
million, slightly more than its expectations of $260 million.
Pipeline Update
Alnylam, which currently has no product on the market, develops
novel therapeutics based on a biological breakthrough technology
known as RNA (Ribo Nucleic Acid) interference (RNAi). The company
wants to focus its resources on its core product strategy, Alnylam
5x15, which is aimed at developing five RNAi therapeutic products
for the treatment of genetically defined diseases addressing major
unmet medical needs. These include ALN-PCS (for
hypercholesterolemia), second generation ALN-TTR (transthyretin
(TTR) mediated amyloidosis or ATTR), ALN-HPN (refractory anemia),
ALN-APC (hemophilia) and ALN-TMP (hemoglobinopathies like
beta-thalassemia and sickle cell anemia). Among these, Alnylam aims
to accelerate development of ALN-TTR and ALN-APC which it believes
holds the most promise.
Under the ATTR program, Alnylam is developing ALN-TTR01 (a
systemically delivered RNAi therapeutic that employs a
first-generation lipid nanoparticles (LNP) formulation) as well as
ALN-TTR02 (second generation delivery formulation). In late
November 2011, Alnylam presented encouraging preliminary data from
a phase I study of ALN-TTR01 which showed that it led to
statistically significant reductions in serum TTR protein levels
for the treatment of ATTR. Final data is expected to be reported in
the first half of 2012. For ALN-TTR02, Alnylam filed an
Investigational New Drug (IND) application in early January 2012
and expects to start a phase I study in the UK in the first half of
2012. Alnylam has chosen ALN-TTR02 as its go-to market product over
ALN-TTR01.
Additionally preliminary data presented in early-January 2012
from the phase I study of ALN-PCS showed that the candidate led to
robust and statistically significant silencing of the protein
target PCSK9 and over 50% reduction in levels of LDL (bad)
cholesterol. Additional data from the study is expected in the
first half of 2012.
Alnylam management separately announced that its scientists have
discovered a new method of monitoring RNai activity in blood
samples. The new method is called circulating extracellular RNA
detection (cERD). Management believes that cERD will be
transformative for RNai product development. Alnylam intends to
provide a broad license to the industry to support development of
RNai therapeutics. The initial cERD license has been provided to
Isis Pharmaceuticals (ISIS).
Our Recommendation
We currently have a Neutral recommendation on Alnylam. The stock
carries a Zacks #3 Rank (“Hold”) in the short term.
We like the company’s “5X15” initiative and the pipeline
progress. Moreover, Alnylam has collaborated with some of the big
pharmaceutical players to further develop and utilize its core
technology. These partnerships validate the potential and viability
of the RNAi approach. We believe the year 2012 is important for the
company with a number of programs expected to report data. We
therefore prefer to wait and see how the year shapes up for
Alnylam.
ALNYLAM PHARMA (ALNY): Free Stock Analysis Report
CUBIST PHARM (CBST): Free Stock Analysis Report
ISIS PHARMACEUT (ISIS): Free Stock Analysis Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis Report
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