10-QPeriod: Q2 FY2011

ALNYLAM PHARMACEUTICALS, INC. Quarterly Report for Q2 Ended Jun 30, 2011

Filed August 3, 2011For Securities:ALNY

Summary

Alnylam Pharmaceuticals, Inc. (ALNY) reported its financial results for the quarter and six months ended June 30, 2011. The company continues to operate at a loss, a common characteristic of early-stage biopharmaceutical firms. For the six months ended June 30, 2011, Alnylam reported a net loss of $30.1 million, a slight increase from the $26.9 million net loss in the same period of 2010. Total net revenues from research collaborators decreased to $41.5 million for the six months ended June 30, 2011, down from $51.1 million in the prior year, primarily due to the planned completion of the Novartis collaboration. Operating expenses also decreased slightly, driven by lower general and administrative costs, including reduced legal expenses. The company's balance sheet shows a decrease in cash and cash equivalents and marketable securities, totaling $316.0 million at June 30, 2011, down from $349.9 million at December 31, 2010. This decrease is largely attributable to net cash used in operating activities, which was $32.9 million for the first six months of 2011, despite net cash provided by investing activities from the sale of marketable securities. Alnylam ended the period with $136.6 million in stockholders' equity. The company highlights its core "Alnylam 5x15" product strategy and the advancement of key programs like ALN-TTR and ALN-PCS, with ALN-PCS filing a clinical trial application in the UK. Investors should monitor progress in clinical trials, partnership developments, and cash burn rate, as the company remains in a pre-revenue stage.

Financial Highlights

40 data points
Beta

Net Income

-$13.82M

EPS (Diluted)

$-0.33

Total Assets

$340.83M

Cash & Equivalents

$67.11M

Free Cash Flow

-$27.05M

Financial Statements
Beta
R&D Expenses$25.30M
Operating Expenses$33.73M
Operating Income-$13.12M
Net Income-$13.82M
EPS (Basic)$-0.33
Shares Outstanding (Basic)42.38M

Key Highlights

  • 1Net loss for the six months ended June 30, 2011, was $30.1 million, an increase from $26.9 million in the prior year's comparable period.
  • 2Total net revenues decreased to $41.5 million for the first six months of 2011, down from $51.1 million in the first six months of 2010, primarily due to the completion of the Novartis collaboration.
  • 3Cash, cash equivalents, and marketable securities decreased to $316.0 million as of June 30, 2011, compared to $349.9 million as of December 31, 2010.
  • 4Net cash used in operating activities was $32.9 million for the six months ended June 30, 2011.
  • 5Research and development expenses decreased slightly to $51.7 million for the first six months of 2011 from $52.8 million in the prior year, with a notable increase in clinical trial and manufacturing expenses.
  • 6General and administrative expenses decreased by 12% to $18.7 million for the first six months of 2011, primarily due to lower consulting and professional services expenses.
  • 7Alnylam is advancing its "Alnylam 5x15" strategy, focusing on genetically defined diseases, with ALN-TTR for transthyretin-mediated amyloidosis and ALN-PCS for severe hypercholesterolemia in clinical or pre-clinical development.

Frequently Asked Questions

As of June 30, 2011, Alnylam had $316.0 million in cash, cash equivalents, and marketable securities. The company reported a net loss of $30.1 million for the six months ended June 30, 2011. Despite ongoing losses, the company believes its current cash and expected alliance revenues are sufficient to fund operations for at least the next several years.

Total net revenues from research collaborators decreased to $41.5 million for the first six months of 2011, compared to $51.1 million in the same period of 2010. This decrease was mainly due to the planned completion of the research program under the Novartis collaboration and license agreement.

Alnylam is pursuing its "Alnylam 5x15" strategy, aiming to advance five RNAi therapeutic programs into advanced clinical development by the end of 2015. Key programs include ALN-TTR for transthyretin-mediated amyloidosis and ALN-PCS for severe hypercholesterolemia, with ALN-PCS having recently filed a clinical trial application in the UK. The company also has partner-based programs like ALN-RSV01.

Alnylam is involved in two significant legal proceedings: the "Tekmira Litigation" concerning alleged misappropriation of confidential information, and the "University of Utah Litigation" regarding inventorship of the Tuschl patents. While Alnylam believes it has strong defenses and intends to defend itself, these litigations are costly and could divert management attention and resources.