Alnylam Up on Narrower-than-Expected Q1 Loss - Analyst Blog

Alnylam Pharmaceuticals Inc.'s ALNY shares were up ever since it announced its first quarter results on May 8. The company's shares have gained 5.3% so far. Alnylam's first quarter 2014 loss of 39 cents per share was narrower than the Zacks Consensus Estimate of a loss of $1.18 but wider than the year-ago loss of 15 cents per share. The wider year-over-year loss was primarily due to lower revenues and higher expenses.

Revenues for the reported quarter were down 55.6% to $8.3 million. Revenues in the quarter decreased due to the recognition of the remaining deferred revenue of $9.7 million from Alnylam's agreement with Cubist Pharmaceuticals Inc. CBST in the year-ago quarter. The top line was also short of the Zacks Consensus Estimate of $12 million.

Quarter in Detail

Revenues in the first quarter of 2014 included $5.5 million from its collaboration with Takeda Pharmaceutical Company Limited (TKPYY), in addition to $2.8 million from the company's alliance with a couple of other companies.

Research and development (R&D) expenses went up approximately 97.3% to $43.8 million. The increase in R&D expenses was primarily due to additional expenses related to the advancement of patisiran (familial amyloidotic polyneuropathy) and ALN-TTRsc programs.

General and administrative (G&A) expenses in the reported quarter increased approximately 42.4% year over year to $8.9 million. The increase in G&A expenses was primarily attributable to higher consulting and professional services expenses.

2014 Outlook

Alnylam expects its R&D expenses to increase for the rest of the year. G&A expenses are however expected to be consistent with first-quarter levels for the three remaining quarters of 2014.

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

Pipeline Update

Alnylam has made significant progress with its pipeline so far. The company 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. for this indication. The company intends to file for the candidate in 2014.

Alnylam is evaluating ALN-TTRsc in a phase II study in patients suffering from familial amyloidotic cardiomyopathy. ALN-TTRsc is a ribo nucleic acid interference (RNAi) therapeutic targeting the TTR gene that is being developed for the treatment of ATTR. Alnylam plans to advance the candidate in a phase III study assuming positive results from phase II.

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.

Alnylam, a biopharmaceutical company, presently carries a Zacks Rank #3 (Hold). A better-ranked stock in the same sector is Alexion Pharmaceuticals, Inc. ALXN. Alexion holds a Zacks Rank #2 (Buy).