Alnylam Pharmaceuticals Inc.’s (ALNY) third quarter loss of 23 cents per share was narrower than the Zacks Consensus Estimate of 39 cents but wider than the year-ago loss of 22 cents per share. The wider loss in the third quarter of 2010 was primarily attributable to the higher spend on research and development during the quarter.

Revenues for the reported quarter climbed 14% to $27.7 million, above the Zacks Consensus Estimate of $26 million.

Revenues were inclusive of $14 million from the company’s alliance with Roche (RHHBY), $5.6 million from Alnylam‘s partnership with Takeda Pharmaceuticals, in addition to $8.1 million of expense reimbursement and amortization revenues from Novartis (NVS), the National Institutes of Health, Cubist Pharmaceuticals Inc. (CBST) and Biogen Idec Inc. (BIIB) among others.

Research and development (R&D) costs climbed approximately 18.3% to $27.5 million. The rise was primarily attributable to costs incurred by the company arising from job-cuts announced in September 2010 following the end of its five-year agreement with Novartis. The increase also resulted from rise in costs associated with the increased R&D headcount and the company’s efforts to expand its pipeline.

General and administrative (G&A) expenses in the reported quarter fell 16.4% to $8.9 million. The decrease in G&A spend was primarily driven by lower professional service fees mainly for legal activities.

Interest income at Alnylam fell 40% to $0.6 million in the third quarter of 2010. The reduction was primarily attributable to the significantly lower average interest rates coupled with lower average cash, cash equivalents and marketable securities balances in the reported quarter.

Alnylam exited the quarter with approximately $372 million in cash, cash equivalents and marketable securities and no debt, thereby providing the company with flexibility to invest in its pipeline and other avenues. Alnylam expects to end 2010 with a cash balance in excess of $325 million.

We maintain our long-term neutral stance on the stock, which is supported by the Zacks #3 Rank (short-term Hold rating) currently carried by the company.

 

 

 
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