Next year is shaping up to be a great year for emerging biotech Alnylam Pharmaceuticals (NASDAQ:ALNY). The drugmaker expects to have 10 major clinical readouts in 2016.
That's more than some one-drug-wonder biotechs have during their entire existence.
The secret to Alnylam Pharmaceuticals' success comes from its RNAi platform that allows it to easily develop drugs to knockdown the expression of proteins that perpetuate diseases. Once the target protein is known, designing the drug is relatively easy compared to developing a small molecule drug to inhibit a protein because all the RNAi drugs have the same basic structure, just the gene sequence part changes.
Developing the RNAi platform hasn't been easy; Alnylam is well behind Isis Pharmaceuticals (NASDAQ:IONS), which uses a similar strategy of targeting RNA -- the intermediary between DNA and the protein it encodes for -- but Isis Pharmaceuticals had a substantial head start developing its antisense technology; when Isis Pharmaceuticals started, RNAi hadn't even been discovered yet. Over the last few years, Alnylam Pharmaceuticals has shown that its RNAi drugs can lower protein levels in the liver, so it's focused on drugs that can act in that organ.
STArs: awkward acronym, but good ideas
Alnylam splits its drug development into three groups that it calls strategic therapeutic areas, or STArs for short (with an "rs" thrown in apparently to make the name sound more interesting). Despite the awkward acronym, the three STArs Alnylam has decided to focus on make a lot of sense.
- Genetic medicines: The most straightforward diseases to treat with RNAi are the ones that are caused by genetic mutations that result in the expression of a mutant protein. Knock down the expression of the mutant protein and the disease goes away -- or at least lessens. Transthyretin (TTR)-mediated amyloidosis, for example is caused by a mutation in TTR that results in the protein misfolding and clumping together in fibrils.
- Cardio-metabolic disease: While cardio is in the name, Alnylam isn't treating the heart directly, but rather by lowering things like lipids and cholesterol, which are made in the liver where Alnylam has been able to get the RNAi drugs to go.
- Hepatic infectious disease: Infections in the liver, such as hepatitis, is an obvious choice given the aforementioned targeting.
What to watch in 2016
You can break the readouts into three major categories:
- Open label extensions: While these continuation trials usually aren't a big deal -- the drug was already shown to work in the original clinical trial the patients were rolled over from -- for Alnylam's investors, they're an opportunity to feel more comfortable with the long-term efficacy. Both patisiran and revusiran will have data for their phase 2 trials in 2016. The patisiran data is especially important because Alnylam is in a competition with Isis Pharmaceuticals and GlaxoSmithKline's ISIS-TTR Rx to complete phase 3 trials and to get on the market.
- Phase 1 trials: Phase 1 trials often don't tell investors much about the chances for success because of the limited number of patients make it hard to say anything about the drug's efficacy. But with RNAi, it's easy to see if the drug is knocking down expression of the intended target, which should give investors substantial confidence that future trials will be successful as long as Alnylam picked the right target to begin with. ALN-TTRsc02, fitusiran, ALN-CC5, ALN-AS1, and ALN-AAT will all have phase 1 data next year.
- Phase 2 trials: The second phase of clinical development is a chance for Alnylam to show proof of concept for its drugs. Alnylam only has one in this category -- PCSsc, designed to lower cholesterol levels.
2017 could be even better
Conspicuously absent in the 2016 data readouts are any phase 3 trials. Alnylam has two drugs -- patisiran and revusiran -- in phase 3 development, but the trials aren't scheduled to read out by the end of 2016. Investors will have to wait until 2017 for the patisiran data and later for the revusiran data. If things go well in 2016, Alnylam is hoping to have five or more phase 3 trials ongoing by the end of 2017.
Alnylam is certainly a long-term story, but investors that are willing to wait could be handsomely rewarded in 2016 and beyond.