Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Here's Why Alnylam Pharmaceuticals Rose 35.1% in November

By Maxx Chatsko - Dec 3, 2019 at 1:51PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The RNAi pioneer earned a surprise drug approval. It could have far-reaching implications for the company's future.

What happened

Shares of Alnylam Pharmaceuticals ( ALNY 1.62% ) gained over 35% last month, according to data provided by S&P Global Market Intelligence. The company surprised investors by earning marketing approval for Givlaari (givosiran) in a rare disease called acute hepatic porphyria only four months after submitting a new drug application (NDA). Investors weren't expecting the U.S. Food and Drug Administration (FDA) to make a decision until the first half of 2020. 

The announcement forced Wall Street analysts to scramble to update their financial models for the company, which sent the pharma stock soaring. More important, however, is that Givlaari became the first drug based on a targeted RNA interference (RNAi) approach to earn regulatory approval. That's something investors may want to sit up and pay closer attention to.

A businessman tossing cash into the air

Image source: Getty Images.

So what

Alnylam Pharmaceuticals now owns the only two approved drugs based on RNAi: Onpattro (patisiran) and Gilvaari. The latter is the first to use a targeted delivery approach called GalNAc-conjugation, which links the gene-silencing molecule at the heart of the RNAi approach to a sugar that is rapidly and efficiently absorbed by the liver. The sugar gets metabolized by the liver, while the gene-silencing payload gets to work turning down the expression of certain disease-driving genes harbored in liver cells.

The targeted delivery approach has the potential to enable relatively safe therapies for ailments ranging from cardiovascular disease to viral infections to a number of rare diseases. That could allow RNAi therapeutics, which can be dosed weeks or months apart, to become an important new paradigm in precision genetic medicines.

Now what

Alnylam Pharmaceuticals is now all-in on the GalNAc-conjugation method, while peers Arrowhead Pharmaceuticals and Dicerna Pharmaceuticals are developing targeted delivery processes based on the same principles. All three appear to be a bit overvalued at the moment. That said, if Alnylam Pharmaceuticals continues to grow product revenue and delivers on its 2020 goals of exiting the year with four approved drug products (wholly owned and with partners), then it could grow into its monstrous $13 billion market valuation in the next few years.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alnylam Pharmaceuticals, Inc. Stock Quote
Alnylam Pharmaceuticals, Inc.
ALNY
$182.85 (1.62%) $2.92

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
634%
 
S&P 500 Returns
141%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/02/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

Invest better with the Motley Fool. Get stock recommendations, portfolio guidance, and more from the Motley Fool's premium services.