Not only has the bloom left the rose of the biotech boom, investors have started plucking off the petals too. That has led to bowel-clenching declines for many biotechs, including Alnylam Pharmaceuticals (NASDAQ:ALNY). While the market is going to do what it's going to do, Alnylam has an uncommonly deep pipeline, with multiple rare disease shots on goal and strong delivery technology in a therapeutic area where many Big Pharmas have thrown in the towel.

Q1 earnings largely a non-event
Earnings reports for most development-stage biotechs are seldom all that significant in terms of the reported financials. Yes, investors do (and should) keep an eye on operating expenses, cash burn, and cash balances, but biotech stocks rarely trade on a missor beat of a few pennies. What's more significant is that earnings reports often present management an opportunity to present incremental data and clinical development plans.

Alnylam ended the quarter with $1 billion in net cash, with much of that coming courtesy of the company's recent comprehensive alliance with Sanofi (NYSE:SNY).

Hitting the ESC key on delivery
One of the recent announcements from Alnylam that caught my eye was a presentation on the company's new delivery technology in non-human primates. Called Enhanced Stabilization Chemistry (or ESC), this augments the company's existing GalNAc-conjugate delivery technology to enhance in vivo stability and results in higher exposures at lower doses. The presentation is a little heavy on science-speak, but the big takeaways are that ESC appeared to show a 10-fold increase in potency in non-human primates relative to the standard GalNAc-conjugate used with ALN-TTRsc.

Alnylam is already using ESC-GalNAc in its ALN-AT3 program and will likely look to apply it to its anti-PCSK9 program as well (partnered with The Medicines Company). If this technology can deliver in humans what it suggests in primates, Alnylam could have an effective treatment for this market that requires significantly fewer injections than the compounds developed by Sanofi/Rengeneron and AstraZeneca, and that could be a significant competitive factor.

I believe this development also serves to underline the advantage Alnylam has gained by virtue of its work in delivery technologies. One of the biggest problems with RNAi therapy is that the molecules are difficult to deliver; without special delivery technology, they're basically "chopped up" by the body before they can do any real good. The inability to develop good delivery technology is likely part of what led Merck and more recently Novartis to abandon their RNAi efforts and this could be a powerful differentiating factor for Alnylam down the line.

Adding a Hep B opportunity?
Alnylam exploited Merck's failures in RNAi and bought its Sirna assets for $175 million after Merck paid more than $1 billion around eight years ago. With the announcement on May 12 of promising preclinical results in hepatitis B, this acquisition has already added a named candidate (ALN-HBV) to Alnylam's pipeline.

In small non-human primate studies, ALN-HBV showed a 1.9 log10 mean reduction in circulating viral DNA, while a multidose escalation study resulted in a 4 log10 reduction of circulating viral DNA and a mean 2.0 log10 reduction in HbsAg. If these results can be repeated in humans, ALN-HBV could be a viable treatment alternative in the hepatitis B market.

The Bottom Line
To at least some extent Alnylam's share price will be subject to the whims of investor sentiment toward the biotech sector. There will be meaningful newsflow later this year, including Phase II open label extension data on patisiran and Phase II data on ALN-TTRsc. In the meantime, investors will have periodic incremental data on early stage programs like ALN-AT3, ALN-AS1, and ALN-AAT to consider. These shares look very interesting for aggressive investors, but readers should go in with the realization that there are above-average risks to this stock, and not all of those risks are tied to the company's actions and/or the performance of its pipeline candidates.

Stephen D. Simpson, CFA owns shares of Alnylam Pharmaceuticals. The Motley Fool recommends Alnylam Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.