10-QPeriod: Q3 FY2015

ALNYLAM PHARMACEUTICALS, INC. Quarterly Report for Q3 Ended Sep 30, 2015

Filed November 9, 2015For Securities:ALNY

Summary

Alnylam Pharmaceuticals, Inc. reported its financial results for the quarter ended September 30, 2015, showcasing a strong balance sheet with total assets of $1.44 billion, bolstered by substantial cash and marketable securities. The company continues to invest heavily in research and development, with R&D expenses increasing by 48% for the quarter and 56% year-to-date, reflecting progress across its Genetic Medicines, Cardio-Metabolic Disease, and Hepatic Infectious Disease Strategic Therapeutic Areas (STArs). Despite significant operating losses typical for a clinical-stage biopharmaceutical company, Alnylam secured substantial funding through a public offering of $496.4 million in net proceeds in January 2015, alongside concurrent private placements with Genzyme. This financial strengthening is crucial for advancing its ambitious "Alnylam 2020" plan, which targets three marketed products and ten clinical-stage programs by 2020. Key partnerships, particularly with Genzyme, continue to be a significant driver, with Genzyme opting into the ALN-AT3 program. Investors should monitor clinical trial progress, collaboration milestones, and the company's ability to manage its substantial R&D investments.

Financial Highlights

37 data points
Beta

Net Income

-$76.79M

EPS (Diluted)

$-0.91

Total Assets

$1.44B

Cash & Equivalents

$149.22M

Free Cash Flow

-$60.84M

Financial Statements
Beta
R&D Expenses$68.62M
Operating Expenses$84.65M
Operating Income-$78.33M
Net Income-$76.79M
EPS (Basic)$-0.91
Shares Outstanding (Basic)84.63M

Key Highlights

  • 1Strong cash position with $149.2 million in cash and cash equivalents and $1.19 billion in marketable securities as of September 30, 2015.
  • 2Significant increase in Research and Development (R&D) expenses, up 48% year-over-year for the quarter ($68.6M) and 44% year-to-date ($193.7M), indicating continued investment in pipeline advancement.
  • 3Net revenues from collaborators decreased 43% year-over-year for the quarter to $6.3 million, primarily due to the completion of performance obligations under certain agreements.
  • 4Genzyme opted into the ALN-AT3 clinical development program, signifying continued strategic partnership and potential future revenue streams.
  • 5Alnylam raised substantial capital through a public offering in January 2015, generating $496.4 million in net proceeds, bolstering its financial flexibility.
  • 6The company is actively engaged in litigation regarding patent inventorship (University of Utah) and trade secret misappropriation (Dicerna), with a favorable ruling received in the Utah case but subject to appeal.
  • 7Expanded facility commitments with new lease agreements for significant office and laboratory space, anticipating future operational growth.

Frequently Asked Questions

As of September 30, 2015, Alnylam Pharmaceuticals had a strong liquidity position with $149.2 million in cash and cash equivalents and $1.19 billion in marketable securities (excluding its investment in Regulus). Total assets stood at $1.44 billion. While the company continues to incur significant operating losses, consistent with its clinical-stage biopharmaceutical model, its substantial cash reserves and recent capital raises provide significant financial runway.

Alnylam is heavily investing in Research and Development (R&D), with R&D expenses increasing substantially for both the quarter and year-to-date periods. This investment is focused on its three Strategic Therapeutic Areas (STArs): Genetic Medicines, Cardio-Metabolic Disease, and Hepatic Infectious Disease. Key highlights include continued enrollment in Phase 3 studies for patisiran (APOLLO) and revusiran (ENDEAVOUR) for ATTR amyloidosis, advancements in the ALN-AT3 program for hemophilia, and progress in earlier stage programs like ALN-CC5 and ALN-AS1.

Strategic alliances, particularly with Genzyme, are crucial for Alnylam's business model. Genzyme's recent opt-in to the ALN-AT3 program is a significant positive development, validating the program and providing potential future revenue streams and shared development costs. Alnylam relies on these collaborations for funding and for advancing its pipeline, especially in areas where it may not have direct commercialization capabilities. Investors should closely watch the milestone achievements and revenue recognition from these partnerships.

As a clinical-stage company, Alnylam faces inherent risks in drug development, including the possibility of clinical trial failures, regulatory hurdles, and the unproven nature of RNAi therapeutics. Significant R&D spending leads to operating losses and a continuous need for capital, although recent financing has strengthened its position. Competition in the biopharmaceutical space is intense. Furthermore, ongoing litigation regarding patent inventorship and trade secret misappropriation presents legal and financial risks, although the company has seen a favorable initial ruling in the University of Utah case.