We maintain our Neutral recommendation on Alnylam Pharmaceuticals Inc. (ALNY) with a target price of $18.
Alnylam Pharmaceuticals, founded in 2002 and headquartered in Cambridge, Massachusetts, develops novel therapeutics based on a biological breakthrough known as RNA (Ribo Nucleic Acid) interference (RNAi).
The company is utilizing the potentially revolutionary RNA interference technology, natural cellular process for selectively turning off the activity of genes, to build a pipeline of drug candidates to treat a wide array of diseases, such as respiratory syncytial virus, Parkinson’s disease, cystic fibrosis and spinal cord injury.
The company is aiming to broaden the scope of its scientific leadership by significantly expanding the range of tissues and cell types targeted by RNAi therapeutics. Alnylam expects to have at least four RNAi therapeutics programs under clinical development by the end of 2010.
The company has entered into collaborations or deals with big pharmaceutical players such as Novartis (NVS), Biogen Idec (BIIB), Takeda and Roche (RHHBY) to further develop and utilize its core technology. The partnerships with major players further validate the potential and viability of the RNAi approach.
Recently, Alnylam received a payment of $20 million from Takeda Pharmaceutical as part of the strategic alliance between them. We believe Alnylam will continue to form new alliances with leading pharmaceutical and biotech companies in the future.
We are disappointed with the slow pipeline progress made by Alnylam. So far, the company has only one candidate in phase II studies, ALN-RSV01 for respiratory syncytial virus (RSV). This slow pipeline progress leads us to believe that the company is not using its resources efficiently. Furthermore, we are also concerned about the early stage of development.
Considering these factors, we believe that Alnylam’s current valuation adequately reflect its fairly balanced risk/reward profile. As such, we see limited upside from current levels and expect the company to perform in line with the broader market.
Read the full analyst report on “ALNY”
Read the full analyst report on “NVS”
Read the full analyst report on “BIIB”
Read the full analyst report on “RHHBY”
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