What happened

Shares of Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY), a precommercial pioneer of RNA-based therapies, continued a slide that began just ahead of the weekend. A clinical trial win that Pfizer Inc. (NYSE:PFE) announced on Thursday could mean potential competition for Alnylam's lead candidate could be much worse than expected. In response, the stock is down 15.7% as of 11:30 a.m. EDT on Monday.

So what 

Patisiran is one of several valuable candidates in Alnylam's pipeline at the moment and furthest along the development timeline. The Food and Drug Administration is expected to hand down an approval decision this August that could make patisiran one of the first available treatments for the inherited form of a rare, life-threatening disease called transthyretin (TTR) amyloidosis. 

Frustrated man with hands on head looking at a downward sloping chart.

Image source: Getty Images.

Ahead of Pfizer's announcement, most had assumed a candidate from Ionis Pharmaceuticals (NASDAQ:IONS) called inotersen was the only serious contender for a very small population of TTR amyloidosis patients. The FDA rejected an application for Pfizer's tafamidis years ago, citing lack of evidence proving efficacy. It took a long time, but Pfizer shot back on Thursday with long-term survival data that shows a significant benefit for patients taking tafamidis compared to placebo after 30 months.

Now what

Alnylam investors certainly have reasons to be nervous. However, there are still too many questions about tafamidis to assume a commercial launch is already doomed. Pfizer's been marketing the oral treatment as Vyndaqel in the European Union for years, but sales figures have so far been too low to mention.

I'd call the recent plunge a bargain buying opportunity, despite Alnylam's market cap still being up around $10 billion at the moment. Though the company has three other drugs in late-stage development, it still needs to score a string of victories to support its lofty valuation. Sanofi will fund late-stage development of a hemophilia candidate, and The Medicines Company has circled its wagons around a cholesterol candidate. While both have delivered excellent data, they also face increasingly fierce competition.

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