According to data from S&P Global Market Intelligence, shares of the leading RNA interference drugmaker Alnylam Pharmaceuticals (NASDAQ:ALNY) gained 18.5% last month. The biotech's stock was lifted up by both the insurgent victory of Donald Trump -- presumably because of his less vitriolic stance on U.S. drug pricing schemes than Hillary Clinton -- along with Sanofi's (NASDAQ:SNY) decision to opt-in to co-develop and co-commercialize the experimental hemophilia treatment fitusiran in the United States, Canada, and Western Europe.
Prior to last month's rally, Alnylam's stock was in a tailspin as a result of its decision to discontinue the development of the late-stage hereditary ATTR amyloidosis drug candidate revusiran. This experimental drug was expected to generate something along the lines of $1 billion in peak sales, and essentially help to set the stage for Alnylam's transformation into a commercial operation. So it's not surprising that the market frowned upon this key clinical setback.
Alnylam's shareholders are currently waiting on pins and needles for the company's lead product candidate patisiran's late-stage readout in mid-2017. As a treatment for another form of hereditary ATTR amyloidosis, patisiran stands to generate peak sales in the neighborhood of $700 million to $800 million, making it a critical asset to keep tabs on moving forward. Apart from patisiran's forthcoming data readout, Alnylam and Sanofi are also on track to advance fitusiran into a pivotal stage trial in early 2017 based on promising early-stage results.
As Alnylam is close to having multiple late-stage candidates under development, once again, and its stock is currently trading at less than four times its last-stated cash position, this clinical-stage biotech is arguably deeply undervalued right now.
Of course, the big concern is that RNA interference therapies, in general, are fraught with safety problems, which is probably why big pharmas have shied away from acquiring companies like Alnylam so far. That said, this niche drug space has produced some stellar results without major safety hang-ups, implying that this fear is, perhaps, overblown. Therefore, investors who are comfortable with elevated levels of risk may want to grab some shares of this RNA interference drugmaker ahead of patisiran's pivotal data readout next year.