Alnylam Earnings: Strong Uptake of Amvuttra Drives Growth; Pipeline Continues to Make Progress

Alnylam ALNY reported strong second-quarter results highlighted by $306 million in net product revenue, representing a 43% increase year over year. Amvuttra (for hATTR amyloidosis with polyneuropathy), is continuing its strong launch since it received U.S. Food and Drug Administration approval in June 2022 and accounted for 43% of the quarter’s net product sales. We forecast about $1.24 billion in net product revenue for 2023, representing 38% growth from the prior year. Alnylam’s results are tracking our expectations, and we maintain our fair value estimate of $199 per share. We view shares as fairly valued, and the stock is currently trading in 3-star territory.

Alnylam’s narrow moat is based on the strong intangible assets from its proprietary RNAi technology and lengthy patents extending to 2035. We continue to have a positive long-term outlook for Alnylam thanks to the continued progression of its diverse drug pipeline for many rare diseases with high unmet needs, which will likely support pricing power if the drug candidates receive approval.

During the quarter, Alnylam entered a global strategic collaboration with wide-moat Roche for development and commercialization of zilebesiran for treatment of hypertension. We assign zilebesiran a 50% probability of approval in our base case, and we await top line results from its phase 2 trial later this year. We like that it would be able to treat a large patient population, if approved.

We appreciate that Alnylam is in a healthy financial position with over $2 billion in cash and marketable securities at the end of the quarter, which will allow the firm to continue funding its pipeline and commercialization efforts for approved drugs. We expect strong geographic expansion efforts will be a key driver, and this should create substantial growth in the long term. Due to Alnylam’s many late-stage trials in progress and efforts to commercially expand Oxlumo and Leqvio, we forecast the firm will remain unprofitable until 2025.