Alnylam Pharmaceuticals (NASDAQ:ALNY) reported earnings Thursday, but with no drugs on the market, the focus was on the pipeline -- and, unfortunately, potential problems therein. As part of its earnings press release, Alnylam disclosed that three patients discontinued from the revusiran phase 2 open label extension, or OLE, study due to injection-site reactions. The OLE is designed to allow patients in the phase 2 study to continue to receive the drug after they complete the initial study, and allows the company to capture long-term treatment data.

The OLE enrolled 25 of the patients from the original phase 2 trial, so 12% of patients have discontinued because of an adverse event. Injection-site reactions can be common for oligonucleotide drugs like revusiran; a whopping 84% of people taking Isis Pharmaceuticals and Sanofi's Kynamro had an injection-site reaction, although only 5% of patients in the phase 3 trials actually discontinued because of the injection-site reaction.

Obviously, with just 25 patients, it's hard to know the exact rate of injection-site reactions that are so bad that patients feel like they need to discontinue treatment. If the actual rate was 5%, you'd expect 1.25 people to drop out of the study, which isn't all that far numerically from three people. Of course, the rate could also go up because Alnylam is planning on dosing for up to two years, which would run through November 2016.

We should get more information about the injection-site reactions when Alnylam releases data for patients who have been in the OLE for a year toward the end of 2015. If the injection-site reactions clear up after the patients stop taking revusiran, the adverse event probably won't be enough to keep the drug off the market, but could make it hard to compete against other drugs for the same disease, such as ISIS-TTRRX, which is being developed by Isis and GlaxoSmithKline.

The bigger worry is that the injection-site reactions are caused by the revusiran's GalNAc-conjugate delivery platform, and we could see injection-site reactions with other drugs in Alnylam's pipeline that use the same technology to increase potency.

Alnylam has a next-generation drug with the same target as revusiran that uses both GalNAc and Enhanced Stabilization Chemistry, or ESC, which is ready to move into the clinic. The combined technology might allow the drug to be potent enough to be dosed monthly, or perhaps even every three months. Less-frequent dosing could potentially make the injection site reaction less of an issue.

Beyond revusiran, Alnylam is expecting a lot of new data in the second half of the year, including phase 2 OLE data for patisiran, phase 1 data for monthly dosing of its hemophilia drug ALN-AT3, and initial phase 1 data for both ALN-AS1 that's being developed for hepatic porphyrias, and ALN-PCSsc for high cholesterol. And Alynlam will bring another drug -- a treatment for hepatitis B -- into the clinic before the end of the year.

For the record, Alnylam lost $72 million in the second quarter. Most importantly, the company ended the quarter with about $1.4 billion in the bank and expects to end the year with more than $1.2 billion; so it's got plenty of cash to continue developing its drugs.