Alnylam Shares Expected To Be Range Bound As Street Digests Drug Study Discontinuation

Morgan Stanley’s David N. Lebowitz expects Alnylam Pharmaceuticals, Inc. ALNY shares to remain range bound, following the announcement by the company that it was discontinuing its Revusiran program.

Lebowitz downgraded the rating on the company from Overweight to Equal Weight, while lowering the price target from $93 to $36.

Program Failure

“Alnylam recently announced that they were discontinuing the revusiran program after the Data Monitoring Committee (DMC) determined during an interim analysis that the benefit-risk profile of the therapy does not support further investigation,” the analyst explained.

Related Link: Credit Suisse Concerned Alnylam's Revusiran Trial Suspension Could Have Broader Pipeline Implications

However, Lebowitz pointed out that the extensive dataset for the company’s Patisiran program suggests that the drug was likely to be approved and was expected to reach the market by 2018.

“In addition, while risks have no doubt increased, the company has an extensive pipeline that provides some level of a valuation backstop for shares,” the analyst stated.

Overhang On Stock

Lebowitz believes that until Alnylam Pharma is able to provide more details on whether the failure of the Revusiran program was due to drug-, platform- or TTR-specific issues, this event is likely to lead to an overhang on the shares.

The analyst also believes that “clean data from the PhIII APOLLO trial for patisiran which is to be released mid 2017 as well as PhI data for ALN-TTRsc02 is likely necessary for the overhang to dissipate.”

At last check, Alnylam was down 5.41 percent at $34.25.

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Posted In: Analyst ColorBiotechNewsDowngradesHealth CarePrice TargetAnalyst RatingsMoversGeneralDavid N. LebowitzMorgan StanleyRevusiran
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