What happened

Shares of Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) a clinical-stage biotech developing RNA-based therapies to treat rare diseases, announced an immediate halt to all studies with one of the more advanced drugs in its clinical-stage development pipeline after the death of a patient. In response, the stock has fallen 11.9% as of 11:40 a.m. EDT during Thursday's session.

So what

Fitusiran is a potential treatment for a wide range of patients with hemophilia, a rare bleeding disorder marked by a lack of clotting factors in the bloodstream. Phase 2 results were positive enough to move forward with a phase 3 study that began recently. Unfortunately, a patient that completed the main leg of the phase 2 study, and was in the extension part of the study in the open-label extension study suffered a fatal blood clot.

Frustrated person looking at a falling stock price chart.

Image source: Getty Images.

It's hard to say whether or not fitusiran played a role. The patient was given concentrated doses of clotting factors to stop what appeared to be a bleeding issue that was causing hip pain, then hospitalized several days later with a severe headache. The patient died several days later due to brain swelling that has since been confirmed to be caused by a major blood clot.

It's been less than a year since Alnylam scrapped its former lead candidate, revusiran, due to safety issues. Hemophilia requires lifelong treatment, and with more than a few available options, safety issues, either real or perceived, could make an eventual commercial launch for fitusiran especially difficult.

Now what

The FDA needs to release the hold that's currently halted all fitusiran trials. Whether the clot that caused the fatal brain swelling was caused by fitusiran or the clotting factors administered will likely remain a mystery. All studies will most likely remain on hold until Alnylam and the FDA can agree on a risk mitigation strategy.

Analysts are eagerly awaiting results from a pivotal trial with Alnylam's lead candidate, patisiran, that could lead to another big stock price movement. The company is expected to report the data this month, and if successful it could help investors shake off Thursday's losses.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alnylam Pharmaceuticals. The Motley Fool has a disclosure policy.