10-QPeriod: Q2 FY2015

ALNYLAM PHARMACEUTICALS, INC. Quarterly Report for Q2 Ended Jun 30, 2015

Filed August 7, 2015For Securities:ALNY

Summary

Alnylam Pharmaceuticals, Inc. (ALNY) reported its financial results for the quarter and six months ended June 30, 2015. The company continues to invest heavily in research and development, as evidenced by a significant increase in R&D expenses year-over-year, reflecting its commitment to advancing its RNAi therapeutic pipeline across its three Strategic Therapeutic Areas (STArs): Genetic Medicines, Cardio-Metabolic Disease, and Hepatic Infectious Disease. This investment is crucial for achieving its "Alnylam 2020" guidance, which aims for three marketed products and ten clinical programs by the end of 2020. Financially, Alnylam ended the period with a strong cash position, bolstered by a successful public offering in January 2015 that raised approximately $496.4 million in net proceeds. Despite ongoing operating losses, which are typical for a clinical-stage biopharmaceutical company, the company's substantial cash reserves and existing strategic alliances provide a runway to fund its ambitious development goals. Key partnerships, particularly with Genzyme and The Medicines Company, are critical for revenue generation and development progress. Investors should monitor the progress of key clinical trials, especially for patisiran and revusiran, and the potential for future collaborations and regulatory milestones.

Financial Highlights

37 data points
Beta

Net Income

-$71.78M

EPS (Diluted)

$-0.85

Total Assets

$1.53B

Cash & Equivalents

$151.26M

Free Cash Flow

-$56.72M

Financial Statements
Beta
R&D Expenses$67.01M
Operating Expenses$81.63M
Operating Income-$72.94M
Net Income-$71.78M
EPS (Basic)$-0.85
Shares Outstanding (Basic)84.35M

Key Highlights

  • 1Significant increase in Research and Development (R&D) expenses, up 50% year-over-year for the three months ended June 30, 2015, indicating robust investment in pipeline advancement.
  • 2Strong cash and cash equivalents position of $151.3 million at June 30, 2015, significantly improved from $75.2 million at December 31, 2014, supported by a $496.4 million net proceeds public offering in January 2015.
  • 3Net revenues from collaborators increased to $8.7 million for the three months ended June 30, 2015, up from $7.3 million in the prior year period, driven by collaborations with MDCO and Genzyme.
  • 4Continued net operating losses, with a loss of $71.8 million for the three months ended June 30, 2015, reflecting ongoing investment in R&D typical for a biopharmaceutical company at this stage.
  • 5Advancement of key clinical programs, including Phase 3 studies for patisiran and revusiran in ATTR amyloidosis, and positive interim results for ALN-AT3 in hemophilia.
  • 6Significant non-cash stock-based compensation expenses, totaling $18.4 million for the six months ended June 30, 2015, a key component of R&D and G&A expenses.
  • 7The company is engaged in significant litigation with the University of Utah regarding patent inventorship, with a trial scheduled for November 2015.

Frequently Asked Questions

As of June 30, 2015, Alnylam Pharmaceuticals reported $151.3 million in cash and cash equivalents and $1.4 billion in total cash, cash equivalents, and marketable securities. This was significantly bolstered by a $496.4 million net proceeds public offering in January 2015. The company believes its current resources are sufficient to achieve its "Alnylam 2020" guidance.

Operating expenses increased by 56% to $81.6 million for the three months ended June 30, 2015, primarily driven by a 50% increase in R&D expenses to $67.0 million. This rise is largely due to increased clinical trial and manufacturing costs, as well as higher compensation and related expenses due to increased headcount. General and administrative expenses also rose by 27%.

Investors should closely monitor the progress of the Phase 3 APOLLO study for patisiran and the Phase 3 ENDEAVOUR study for revusiran, both targeting ATTR amyloidosis. Additionally, updates on ALN-AT3 for hemophilia and ALN-CC5 for complement-mediated diseases, as well as the initiation of the ALN-AS1 study for acute hepatic porphyrias, are important indicators of pipeline advancement.

The 2014 Genzyme collaboration is a broad strategic alliance for the worldwide development and commercialization of RNAi therapeutics in the field of Genetic Medicines. Genzyme's opt-in rights and potential future development and commercialization activities are critical to Alnylam's strategy, with Genzyme contributing to development costs and potentially making milestone and royalty payments. Alnylam also benefits from Genzyme's concurrent private placements and share purchases which bolster Alnylam's cash position.