10-QPeriod: Q1 FY2014

ALNYLAM PHARMACEUTICALS, INC. Quarterly Report for Q1 Ended Mar 31, 2014

Filed May 9, 2014For Securities:ALNY

Summary

Alnylam Pharmaceuticals, Inc. (ALNY) reported its first quarter 2014 financial results, showcasing significant advancements in its RNA interference (RNAi) therapeutic pipeline and a substantial strengthening of its financial position. The company's strategic focus on developing novel RNAi therapeutics, particularly under its "Alnylam 5x15" program, continues to drive its R&D efforts. The period was marked by a major strategic collaboration with Genzyme, a Sanofi company, which significantly bolstered ALNY's cash reserves and provided substantial validation for its genetic medicine pipeline. Financially, Alnylam reported a substantial increase in cash and cash equivalents, largely due to the upfront payment and equity investment from Genzyme. While the company continues to incur significant operating losses, driven by substantial investments in research and development, particularly a notable in-process R&D charge related to the Sirna acquisition, the strong liquidity position provides ample runway for continued development. The Genzyme collaboration, alongside other strategic alliances, is expected to be a primary source of future revenue through milestone payments and royalties.

Financial Highlights

37 data points
Beta

Net Income

-$250.94M

EPS (Diluted)

$-3.70

Total Assets

$1.08B

Cash & Equivalents

$350.59M

Free Cash Flow

-$42.06M

Financial Statements
Beta
R&D Expenses$43.76M
Operating Expenses$277.34M
Operating Income-$269.06M
Net Income-$250.94M
EPS (Basic)$-3.70
Shares Outstanding (Basic)67.79M

Key Highlights

  • 1Strengthened liquidity with a significant increase in cash and cash equivalents to $350.6 million as of March 31, 2014, largely due to a $700 million upfront payment from the Genzyme collaboration.
  • 2Incurred a significant $224.7 million in-process R&D charge related to the acquisition of Sirna Therapeutics' RNAi assets, which includes intellectual property and pre-clinical candidates.
  • 3Generated $8.3 million in net revenues from collaborators, a decrease from $18.6 million in the prior year, primarily due to the recognition of remaining deferred revenue from the terminated Cubist agreement.
  • 4Reported a net loss of $250.9 million for the quarter, compared to a net loss of $9.0 million in the prior year, heavily influenced by R&D investments and the Sirna acquisition charge.
  • 5Advanced multiple RNAi therapeutic candidates, including patisiran (ALN-TTR02) in Phase 3 for ATTR, ALN-TTRsc in Phase 2 for TTR cardiac amyloidosis, and ALN-AT3 in Phase 1 for hemophilia.
  • 6Entered into a significant global strategic collaboration with Genzyme for the development and commercialization of RNAi therapeutics in genetic medicines, including an upfront payment of $700 million and the sale of 8.8 million shares of common stock.
  • 7Increased operating lease obligations by $37.8 million due to an extension of the Cambridge, MA facility lease through September 2021.

Frequently Asked Questions

The collaboration with Genzyme significantly boosted Alnylam's financial position. It resulted in $700 million in aggregate cash consideration received and the sale of 8.8 million shares of common stock. This substantially increased the company's cash and cash equivalents to $350.6 million as of March 31, 2014, providing a strong liquidity position for future operations and development.

The acquisition of Sirna Therapeutics led to a $224.7 million charge to in-process research and development (R&D) expense for the quarter ended March 31, 2014. This charge was comprised of a $25.0 million cash payment and the fair value of 2.1 million shares of Alnylam's common stock issued at closing, plus a liability for additional shares to be issued upon technology transfer completion.

Alnylam expects its revenues to be primarily derived from its strategic alliances and collaborations in the foreseeable future. Key collaborators include Takeda, Monsanto, The Medicines Company (MDCO), and the newly formed collaboration with Genzyme. Revenue streams are expected to come from license fees, funded research and development, and milestone payments.

Alnylam continues to incur significant operating losses due to substantial investments in R&D for its RNAi therapeutic pipeline. The company's current cash, cash equivalents, and marketable securities are expected to fund its planned operations through the launch of its first commercial product. The Genzyme collaboration and other existing alliances are critical for providing ongoing funding through milestone payments and potential future royalties.