10-QPeriod: Q2 FY2013

ALNYLAM PHARMACEUTICALS, INC. Quarterly Report for Q2 Ended Jun 30, 2013

Filed August 9, 2013For Securities:ALNY

Summary

Alnylam Pharmaceuticals, Inc. (ALNY) reported its financial results for the quarter ended June 30, 2013. The company continued to advance its RNAi therapeutic pipeline, with a focus on its core product strategy, 'Alnylam 5x15.' Significant progress was noted in the ALN-TTR program, with promising interim results from the Phase II clinical trial of ALN-TTR02 demonstrating dose-dependent and durable knockdown of serum TTR levels. Additionally, ALN-TTRsc showed robust knockdown in healthy volunteers from its Phase I trial. The company secured substantial proceeds from a public offering in January 2013, bolstering its cash position to $24.975 million and overall liquidity with marketable securities. While net revenues from research collaborators decreased year-over-year, primarily due to the completion of obligations under the Roche/Arrowhead alliance, this was partially offset by new revenues from agreements with Monsanto and The Medicines Company (MDCO). Alnylam also reported increased research and development expenses, reflecting continued investment in its pipeline and drug delivery technologies, while general and administrative expenses decreased due to the resolution of litigation. Despite ongoing net losses, Alnylam's substantial cash reserves and strategic alliances provide a runway for continued development. The company's focus on a genetically defined target strategy and its robust intellectual property portfolio position it to navigate the competitive biopharmaceutical landscape.

Financial Highlights

38 data points
Beta

Net Income

-$18.17M

EPS (Diluted)

$-0.29

Total Assets

$462.56M

Cash & Equivalents

$24.98M

Free Cash Flow

-$23.98M

Financial Statements
Beta
R&D Expenses$24.21M
Operating Expenses$30.00M
Operating Income-$21.31M
Net Income-$18.17M
EPS (Basic)$-0.29
Shares Outstanding (Basic)61.66M

Key Highlights

  • 1Alnylam's ALN-TTR program continues to show promise, with ALN-TTR02 demonstrating significant TTR knockdown in Phase II trials and ALN-TTRsc achieving robust knockdown in Phase I trials.
  • 2The company raised approximately $173.6 million in net proceeds from a public offering in January 2013, significantly strengthening its cash and marketable securities position.
  • 3Net revenues decreased year-over-year due to the completion of certain collaboration obligations, but were partially offset by new revenue streams from agreements with Monsanto and The Medicines Company.
  • 4Research and development expenses increased, driven by advancements in the ALN-TTR and ALN-AT3 programs, and continued investment in drug delivery technologies.
  • 5General and administrative expenses decreased significantly, largely due to the resolution of prior litigation.
  • 6The company reported $131.2 million in deferred revenue as of June 30, 2013, representing future revenue from existing collaboration agreements.
  • 7Alnylam's investment in Regulus Therapeutics Inc. was reclassified from equity method accounting to an available-for-sale marketable security following Regulus's IPO and subsequent offerings.

Frequently Asked Questions

As of June 30, 2013, Alnylam reported cash and cash equivalents of $24.975 million and marketable securities of $184.719 million, totaling $209.694 million in current liquid assets. Including long-term marketable securities, total liquid assets were $379.5 million. The company raised significant proceeds from a public offering in January 2013, bolstering its financial resources to fund operations through at least the end of 2016.

Alnylam's revenues are primarily derived from research collaborations. For the three months ended June 30, 2013, net revenues were $8.687 million, a decrease from $20.884 million in the prior year. This decline was mainly due to the completion of performance obligations under the Roche/Arrowhead alliance. However, new revenues from agreements with Monsanto and The Medicines Company, along with recognition of deferred revenue from the terminated Cubist agreement, partially offset the decrease.

Alnylam's ALN-TTR program is its lead development effort. The ALN-TTR02 candidate showed promising interim results from its Phase II trial, demonstrating rapid, dose-dependent, and durable knockdown of serum TTR levels in patients with transthyretin-mediated amyloidosis (ATTR). ALN-TTRsc, utilizing a subcutaneous delivery platform, also demonstrated significant TTR knockdown in healthy volunteers from its Phase I trial. The company is advancing both candidates, with plans for a Phase III trial for ALN-TTR02.

Research and development (R&D) expenses increased by 11% year-over-year for the quarter, primarily due to higher clinical trial and manufacturing costs for programs like ALN-TTR and ALN-AT3, and increased investment in pre-clinical and delivery technologies. Conversely, general and administrative (G&A) expenses decreased by 48% due to the resolution of litigation with Tekmira. Alnylam expects R&D expenses to continue to increase moderately, while G&A expenses are expected to remain consistent.