Alnylam Pharmaceuticals Inc.’s (ALNY) fourth quarter loss of 16 cents per share was narrower than the Zacks Consensus Estimate of a loss of 35 cents per share and also the year-ago loss of 19 cents per share. Lower general and administrative expenses helped reduce loss during the quarter.
Revenues for the reported quarter fell 20% from the prior year to $21.2 million. Revenues were also below the Zacks Consensus Estimate of $23 million.
For full year 2010, Alnylam reported a loss per share of $1.04, well below the year-ago loss of $1.14 and the Zacks Consensus Estimate of a loss of $1.34. Total revenue reported by the company was $100 million, slightly below the Zacks Consensus Estimate of $102 million and in parity with $100.5 million reported in 2009.
Quarterly Details
Revenues in the quarter were inclusive of $14 million from the company’s alliance with Roche (RHHBY), $5.8 million from Alnylam‘s partnership with Takeda Pharmaceuticals, in addition to $1.4 million of expense reimbursement and amortization revenues from Novartis (NVS), the National Institutes of Health, Cubist Pharmaceuticals (CBST) and Biogen (BIIB) among others.
Research and development (R&D) costs climbed approximately 21% to $26.1 million. The rise was primarily attributable to increased spending on pipeline expansion.
General and administrative (G&A) expenses in the reported quarter fell about 57% to $7.5 million. The decrease in G&A spend was primarily driven by lower professional service fees mainly for legal activities.
Alnylam exited the quarter with approximately $349.9 million in cash, cash equivalents and marketable securities, which exceeded its goal of ending 2010 with a cash balance of $325 million. Alnylam expects to exit 2011 with a cash balance of more than $275 million.
2011 Guidance
In 2011, Alnylam expects R&D expenses to be lower than 2010 levels due to completion of corporate restructuring in late 2010. Expenses related to G&A are however expected to be lumpy from quarter to quarter due to increased litigation expenses from a trial expected to commence in March 2011.
Pipeline Update
In January 2011, Alnylam launched its “Alnylam 5X15” strategy aimed at developing RNAi therapeutic products for the treatment of genetically defined diseases addressing major unmet medical needs. By 2015, the company expects to move five candidates into clinical development. Important among these are ALN-PCS (for hypercholesterolemia), second generation ALN-TTR (a hepatitis C compound), and ALN-HPN (refractory anemia).
A phase I/II clinical study of ALN-VSP to treat liver cancer is ongoing. In January 2011, Alnylam presented positive data from the trial. Alnylam expects to present further data from the trial in the second quarter and also plans to find a partner for the program before initiating phase II studies.
A phase I clinical study of ALN-TTR01 to treat transthyretin (TTR) mediated amyloidosis is ongoing. Recently, ALN-TTR01 was given a positive review for Orphan Drug status in Europe.
Our Recommendation
Currently, we have a Neutral recommendation on Alnylam, which is supported by a Zacks #3 Rank (short “Hold” rating).
Even though we are pleased with the company’s partnerships with several large pharmaceutical companies that provide it with financial muscle, we remain cautious about the success of Alnylam’s core RNA interference technology in drug development application. A very limited number of drug candidates based on RNAi discovery have been tested in animals or humans. This increases the uncertainty of any drug program using this technology. Further, with the end of two major deals (Novartis and Roche) in the last four months, we prefer to remain on the sidelines as the company could lose out on major milestone payments and royalties.
ALNYLAM PHARMA (ALNY): Free Stock Analysis Report
BIOGEN IDEC INC (BIIB): Free Stock Analysis Report
CUBIST PHARM (CBST): Free Stock Analysis Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis Report
Zacks Investment Research
