Loaded-Up Alnylam Pharmaceuticals, Inc. Progresses Its Pipeline

With plenty of cash on hand, Alnylam Pharmaceuticals' fourth-quarter "earnings" call was all about the pipeline.

Brian Orelli
Brian Orelli
Feb 12, 2015 at 7:52PM
Health Care

Alnylam Pharmaceuticals (NASDAQ:ALNY) is going to need plenty of cash to get to its goal of having three marketed products and 10 clinical programs in 2020. Fortunately, that's not a major problem at this point. Alnylam ended last year with $882 million in cash and plans to end this year with more than $1.2 billion.

That's not a typo. And no, Alnylam won't be cash flow positive this year. There's a larger number in the later time point because the company has already raised $567 million this year through a secondary offering and concurrent selling of shares to Sanofi (NASDAQ:SNY).

Sanofi has the right to buy additional shares anytime Alnylam does a secondary offering as part of the companies' January 2014 deal, where Sanofi's Genzyme gained access to three of Alnylam's programs, and took a 12% ownership of the biotech by purchasing $700 million worth of stock at $80 per share. The fact that Sanofi wanted to purchase shares during this round of financing at a price of $95 per share is a good sign; the partner has more insight into Alnylam than outside observers.

Alnylam has two drugs in phase 3 development -- both are part of the Sanofi deal. While we won't see data from those trials this year, we will get updated information from the phase 2 open-label extension trials where patients in the phase 2 trials can stay on drug and continue to be monitored.

For patisiran, Alnylam's treatment for familial amyloidotic polyneuropathy caused by nerve lesions induced by deposits of misfolded proteins, we've already seen an improvement in symptoms after six months of treatment. Management said to expect 12-month data from the ongoing phase 2 trial in April at the American Academy of Neurology meeting.

Alnylam's other late-stage drug, revusiran, a treatment for familial amyloidotic cardiomyopathy where the deposits end up in the heart, has also produced positive phase 2 data. The full data set will be presented at the American College of Cardiology meeting in March, and an update on the open-label trial is expected toward the end of this year. At the cardiology meeting, we'll also see a presentation of a natural history study of patients with the disease, which should be helpful as a comparison to the phase 2 data, because the trial didn't have a placebo control.

In addition to its two most advanced drugs, Alnylam has three drugs in phase 1 trials -- one for hemophilia, another for complement-mediated diseases, and a third for high cholesterol -- and has a fourth ready to start a phase 1 clinical trial in the middle of the year. This year, Alnylam expects to file an application with the FDA to start trials for its seventh and eighth drugs.

With all that activity, Alnylam is going to spend more on research and development this year than the $190 million it spent last year. Fortunately, the biotech gets some of its research covered by its collaborators, and Sanofi will pick up more of the tab for the drugs that have moved into phase 3 development.

Adding the most recent funding to the cash at the end of the year, and subtracting the guidance for the year-end cash, it looks like Alnylam is planning on burning through less than $180 million this year. Even if that figure increases in 2016 and beyond, the Alnylam nest egg will get the company well on its way to its 2020 goal.