10-QPeriod: Q2 FY2012

ALNYLAM PHARMACEUTICALS, INC. Quarterly Report for Q2 Ended Jun 30, 2012

Filed August 8, 2012For Securities:ALNY

Summary

Alnylam Pharmaceuticals, Inc. (ALNY) filed its quarterly report for the period ending June 30, 2012, on August 8, 2012. The company reported a net loss of $12.96 million for the second quarter, compared to a net loss of $13.82 million in the same period of 2011. For the six months ended June 30, 2012, the net loss was $24.32 million, an improvement from $30.11 million in the prior year period. This reduction in net loss was primarily driven by lower research and development expenses. The company's financial position strengthened with total assets reaching $318.48 million at June 30, 2012, up from $281.92 million at December 31, 2011. This increase was largely due to a significant rise in marketable securities and an increase in cash and cash equivalents. Notably, Alnylam successfully raised approximately $86.8 million in net proceeds from a public offering in February 2012, which bolstered its cash reserves and is intended to fund pipeline advancement. However, cash and cash equivalents decreased to $48.27 million from $70.23 million at the end of the previous quarter, indicating significant cash burn from operations.

Financial Highlights

40 data points
Beta

Net Income

-$12.96M

EPS (Diluted)

$-0.25

Total Assets

$318.48M

Cash & Equivalents

$48.27M

Free Cash Flow

-$23.36M

Financial Statements
Beta
R&D Expenses$21.72M
Operating Expenses$32.95M
Operating Income-$12.07M
Net Income-$12.96M
EPS (Basic)$-0.25
Shares Outstanding (Basic)51.28M

Key Highlights

  • 1Alnylam reported a net loss of $12.96 million for Q2 2012, an improvement from $13.82 million in Q2 2011.
  • 2For the first six months of 2012, the net loss was $24.32 million, down from $30.11 million in the comparable 2011 period, attributed to reduced R&D spending.
  • 3The company successfully raised approximately $86.8 million in net proceeds from a public offering in February 2012, strengthening its cash position.
  • 4Despite the equity raise, cash and cash equivalents decreased to $48.27 million from $70.23 million at the end of Q1 2012, signaling substantial operational cash burn.
  • 5Total assets increased to $318.48 million, primarily driven by a significant increase in marketable securities.
  • 6The company continues to face substantial legal challenges, including ongoing litigation with Tekmira, with potential damages ranging from $61 million to over $1 billion.
  • 7Alnylam is advancing its core product strategy, 'Alnylam 5x15,' with key programs like ALN-TTR02 showing promising early clinical data for transthyretin-mediated amyloidosis.

Frequently Asked Questions

Alnylam reported $48.27 million in cash and cash equivalents at the end of Q2 2012, down from $70.23 million at the end of Q1 2012. The net cash used in operating activities for the first six months of 2012 was $51.91 million, indicating a significant operational cash burn. However, the company raised $86.8 million in net proceeds from a public offering in February 2012, which is intended to fund its operations and pipeline advancement. Management believes its current cash and marketable securities will be sufficient through at least the end of 2014.

Key risks highlighted include the early-stage and unproven nature of RNAi technology, substantial accumulated deficits and the need for significant future funding, dependence on third-party collaborators for development and commercialization, intense competition from established pharmaceutical companies, potential product liability claims, and significant ongoing legal proceedings, notably the litigation with Tekmira which could result in substantial damages.

Alnylam is advancing its 'Alnylam 5x15' strategy. Its lead program, ALN-TTR02 for transthyretin-mediated amyloidosis (ATTR), has shown robust and durable knockdown of serum TTR protein levels in Phase I trials, with a Phase II trial initiated. ALN-AT3 for hemophilia is in development using a subcutaneous delivery approach. ALN-PCS for severe hypercholesterolemia demonstrated dose-dependent reductions in LDL-c in Phase I trials, with plans to partner the program. Other programs are in pre-clinical development or advancing through collaborations.

Alnylam is involved in several significant legal proceedings. The most prominent is the litigation with Tekmira, alleging misappropriation of trade secrets and patent infringement. Tekmira's expert report estimated damages between $61 million and $446 million, potentially trebling up to $1.3 billion. Alnylam is vigorously defending itself, believing the claims are overstated. A trial is expected in October 2012. The company also faces litigation from the University of Utah concerning patent inventorship.