Alnylam Pharmaceuticals (NASDAQ:ALNY) fell 12.6% on Thursday after reporting earnings Wednesday afternoon, but it's recovered some of that today.
Of course, it wasn't the actual earnings that caused the decline -- for the record, the biotech lost $104 million and ended the quarter with almost $1.2 billion in the bank -- but investors appear to be worried about the biotech's RNAi platform after Alnylam Pharmaceuticals reported further details about its phase 3 revusiran trial for patients with ATTR amyloidosis that was stopped early because of an imbalance in the number of deaths between patients getting revusiran and those getting placebo.
Alnylam had previously disclosed that there were 18 deaths in the clinical trial. After the trial was closed, the company learned about another death, so the total was actually 19 deaths, which broke into 17 taking revusiran and two who got placebo.
While the ratio sounds really bad, it's only sort-of-bad because the trial called for twice as many patients to be enrolled in the revusiran arm as the placebo arm, so you can think of it as 8.5 compared to two, which nevertheless still turns out to be a statistically significant difference.
Assuming revusiran killed the patients -- and that's still open for debate since ATTR amyloidosis patients are sick, with a median survival of 2.5 years -- there are three main possibilities:
- It's something specific about revusiran, so the rest of the pipeline won't be affected.
- It's something about revusiran's target or ATTR amyloidosis, so two of Alnylam's pipeline targets, patisiran and ALN-TTRsc02, that are designed to knockdown the same protein could be affected.
- It's something specific to RNAi, which would affect Alnylam's entire pipeline.
At this point, it isn't clear which category it falls into, but investors clearly think the third, most-serious option is possible enough that they're lowering Alnylam's valuation to account for the increased risk.
Ionis Pharmaceuticals' (NASDAQ:IONS) investors are also anxiously awaiting more data that might help decide which category the issue falls into. Ionis Pharmaceuticals is also developing a drug for ATTR amyloidosis, so while stopping development of revusiran was beneficial, it also opened the door that the target they share could be a problem (category No. 2 above).
Management is arguing for the first category where the issues are revusiran-specific and is pressing on with the rest of the pipeline. Alnylam's new lead molecule is patisiran, which treats the neurological form of ATTR amyloidosis, rather than the cardiac version like revusiran. The drug is in a phase 3 trial, dubbed APOLLO, which will read out data in the middle of next year. The independent data monitoring committee looked at the in-process data and recommended continuing dosing, so there doesn't seem to be a sign of any problems with patisiran.
Further back in the pipeline, fitusiran, which treats hemophilia and rare bleeding disorders, is ready for phase 3 trials, which will start in early 2017. Investors will get a look at the phase 1/2 data, including extended dosing in the open-label extension, at the American Society of Hematology meeting next month.
And Alnylam's partner The Medicines Company (NASDAQ:MDCO) continues to develop ALN-PCSsc for high cholesterol. The Medicines Company recently reported data from a phase 2 trial of ALN-PCSsc, showing that the drug was able to reduce cholesterol and -- quite important under the circumstances -- was well tolerated and didn't show any "drug-related liver enzyme elevations, neuropathy signals, or renal function changes."
Alnylam has some other programs further back in development, but the three most-advanced programs will dictate Alnylam's valuation for the near future. The more data the biotech can generate showing that the other medications are safe, the more likely investors will be confident that revusiran's issues are specific to the drug.