Pfizer Inc. (NYSE:PFE) recently scored a clinical trial win with a rare-disease drug the Food and Drug Administration rejected about six years ago. The big U.S. pharma didn't tell us a whole lot about its latest clinical trial success, but investors are already assuming tafamidis will become a thorn in the side of Alnylam Pharmaceuticals Inc. (NASDAQ:ALNY) and Ionis Pharmaceuticals Inc. (NASDAQ:IONS).

The market shaved over $1 billion from their combined market caps within hours of Pfizer's announcement. Could there be further losses ahead? Here's what you need to know.

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Meaningful outcomes

Pfizer's experimental transthyretin (TTR) stabilizer significantly reduced all-cause mortality and cardiovascular-related hospitalizations for patients with TTR cardiomyopathy at 30 months. Pfizer didn't share any numbers but promised to present the results at an upcoming conference.

Despite the lack of information, the market immediately shaved 8% off Alnylam's stock price, and Ionis fell a couple percentage points before the day was over. Markets are prone to knee-jerk reactions, but Alnylam and Ionis shareholders have good reasons to be nervous about Pfizer's candidate.

Plenty to be afraid of

The FDA is currently reviewing applications that would make Alnylam's lead candidate, patisiran, and Ionis Pharmaceuticals' inotersen the first available treatments for perhaps 10,000 Americans with TTR amyloidosis. Both sailed through clinical trials with high-efficacy marks, but tafamidis could have them beat in terms of safety, pricing, and convenience.

Patisiran's safety profile is relatively clean, but Alnylam had to scrap a related program called revusiran following an imbalance of patient deaths. Inotersen raised a lot of eyebrows when three patients displayed seriously low platelet counts, one of which later died.

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While the exact reasons for the safety scares are unclear, we know that TTR plays a vital role carting vitamin A through the bloodstream to tissues that need it. It only becomes a problem for these patients when it falls apart and gets lodged in important tissues. Patisiran and inotersen prevent the damage by stopping TTR production at its source, which has always been an uncomfortable compromise.

Tafamidis doesn't limit TTR production. Instead, it helps hold the transport protein together so it can do its job without causing problems.

An easy-to-swallow capsule form is another advantage for Pfizer's drug. Inotersen is a weekly injection and patisiran is delivered through intravenous infusion every few weeks.

Finally, tafamidis showed a mortality benefit after 30 months of observation for patients with disease caused by inherited genetic mutations and the "wild-type" version of TTR amyloidosis. That suggests genetic testing to secure reimbursement won't be an issue. Also, proof of a strong long-term survival benefit would carry a lot of weight with prescribing physicians and end payers. It will be a very long time before Alnylam or Ionis can provide any.

Don't get too worried

Before you start dumping your Alnylam and Ionis shares, you should know that tafamidis is already marketed in the European Union as Vyndaqel. Pfizer tried to rush a hodgepodge of different clinical studies to the FDA after it acquired the drug in 2011, but the Agency asked for more efficacy data from a single large study. 

The EU approval limits the drug to several thousand Europeans with early-stage nerve damage caused by TTR amyloidosis and sales so far have been too low to mention. It's hard to imagine an expansion to the wider population of patients with heart damage will turn this sleeper into a big seller, but stranger things have happened. We really need to see just how significant the mortality benefit is before we worry about its potential impact on inotersen and patisiran. 

Even if tafamidis becomes the Rocky Balboa of biopharma and knocks competing drugs out of the ring, it doesn't fundamentally alter the investing thesis for either biotech. Ionis is already booking profits, and inotersen is just one of two drugs awaiting regulatory review. Alnylam is more exposed, but it has plenty of late-stage candidates to fall back on.

The Medicines Company is developing a cholesterol drug with 10-figure sales potential that it licensed from Alnylam. Plus, Sanofi is funding a pivotal trial for a hemophilia candidate with blockbuster potential. 

Alnylam's $11.9 billion market cap right now suggests a lot of success for all its late-stage candidates is already expected. While you might not want to start a position at recent prices, Pfizer's latest clinical win shouldn't be too unsettling.