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What happened

Shares of drugmaker Alnylam Pharmaceuticals (NASDAQ:ALNY), which uses RNA interference (RNAi) technology, dropped by more than 44% in pre-market trading today due to a major clinical setback. In short, management decided to nix the development of the company's second most advanced product candidate, revusiran, which was in a late-stage study for hereditary ATTR amyloidosis with cardiomyopathy, a rare condition that typically results in heart failure. According to Alnylam's statement on the matter, an unblinded review "revealed an imbalance of mortality in the revusiran arm as compared to placebo," implying that the drug's benefits may not outweigh its risks. 

So what

Alnylam appeared primed to have two major orphan drugs on the market by 2019, with the experimental treatment for the familial amyloidotic polyneuropathy form of ATTR, patisiran, on track to garner a regulatory approval in 2018. The company's plans obviously took a big hit with this unexpected setback, and perhaps most importantly, it may have wiped out nearly a billion in annual revenue moving forward. 

Now what

The silver lining, if there is one, is that patisiran's clinical program won't be affected by this news. So, with patisiran's ongoing late-stage study expected to product top-line data in the second half of 2017, Alnylam still stands a good shot at transforming into a commercial operation in 2018. And that's not too shabby, given that patisiran is forecast to generate peak sales of $700 million to $800 million. 

That being said, this isn't the first time RNA-interference-based drugs have run into serious safety problems in the clinic, so this latest setback is sure to cast a long shadow over this promising technology. Big pharma, after all, has kept its distance to a large degree from this novel therapeutic platform, choosing to sign licensing deals with Alnylam and others, instead of acquiring RNAi drugmakers outright. As things stand, it might be a good idea to take a wait-and-see approach with this biotech for the time being, perhaps until patisiran's pivotal data readout is closer at hand.

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