Why Is Alnylam (ALNY) Down 7% Since Last Earnings Report?

A month has gone by since the last earnings report for Alnylam Pharmaceuticals (ALNY). Shares have lost about 7% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Alnylam due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Alnylam's Q4 Earnings Miss Estimates, Sales Beat

Alnylam incurred a loss of $2.47 per share in the fourth quarter of 2019, wider than the year-ago quarter’s loss of $2.09 and the Zacks Consensus Estimate of a loss of $2.25. However, the loss includes stock-based compensation expenses and gains on equity securities investment. Excluding the stock-based compensation expenses and gains on equity securities investment , the adjusted loss was $1.98 per share compared with an adjusted loss of $1.82 in the year-ago quarter.

The company recorded revenues of $71.6 million, which marginally beat the Zacks Consensus Estimate of $71 million. In the year-ago quarter, revenues were $2.1 million. The top line in the quarter included net product revenues of $55.9 million from sales of Onpattro (patisiran), which was approved by the FDA in August 2018. Net revenues from collaborators were $15.7 million, which also includes collaboration revenue from Regeneron Pharmaceuticals, Inc. compared with $9 million in the year-ago quarter.

Quarter in Detail

During the quarter, Alnylam received the second-ever regulatory approval of an RNAi therapeutic with the approval of Givlaari (givosiran) in the United States. Givlaari was approved for the treatment of adults with acute hepatic porphyria (AHP). The company observed strong initial demand for the drug in the United States, with 13 Start forms received in the first six weeks of FDA approval.

The company also received a positive opinion for the drug for the treatment of AHP in adolescents and adults from the Committee for Medicinal Products for Human Use (CHMP) in the EU.

Adjusted research and development (R&D) expenses increased 41% from the year-ago period to $166.5 million. Adjusted selling, general and administrative (SG&A) expenses rose 33.3% from the year-ago quarter to $124.9 million.

2019 Results

Alnylam reported a loss of $8.11 per share in 2019, wider than the loss of $7.57 in 2018.

The company reported revenues of $219.8 million in 2019.

2020 Guidance

The company expects adjusted R&D and SG&A expenses to be $1,025-$1,125 million. The company also expects current cash, cash equivalents, and marketable debt and equity securities to support company operations for many years, based on its current operating plans.

Pipeline Updates

The company continued enrollment inthe APOLLO-B phase III study on Onpattro in ATTR amyloidosis patients with cardiomyopathy during the fourth quarter.

During the quarter, Alnylam continued enrollment in the HELIOS-A phase III study on vutrisiran (ALN-TTRsc02), a subcutaneously-administered, investigational RNAi therapeutic, for the treatment of hATTR amyloidosis with polyneuropathy. The company initiated another phase III study, HELIOS-B, on the candidate in hereditary and wild-type ATTR amyloidosis cardiomyopathy during the quarter.

Alnylam reported positive top-line results from ILLUMINATE-A, a global phase III study of lumasiran in children and adults with primary hyperoxaluria type 1 (PH1). It also initiated a new drug application (NDA) rolling submission to the FDA, with remaining sections expected to be submitted in early 2020. The company completed enrollment in ILLUMINATE-B, a phase III pediatric study of lumasiran in PH1 patients under six years of age. It initiated the ILLUMINATE-C phase III study of the drug in PH1 patients with severe renal impairment.

Alnylam’s partner, The Medicines Company, acquired by Novartis in January 2020,reported positive complete results from the ORION-9 and -10 phase III studies of inclisiran in patients with heterozygous familial hypercholesterolemia (HeFH) and atherosclerotic cardiovascular disease (ASCVD).The company files regulatory applications in the United States and Europe seeking approval for the same.

The company is developing another candidate, fitusiran, in partnership with Sanofi (PA:SASY) and continues enrollment in the ATLAS phase III programfor the treatment of hemophilia A or B with and without inhibitors.

How Have Estimates Been Moving Since Then?

Estimates revision followed a downward path over the past two months.

VGM Scores

At this time, Alnylam has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Alnylam has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.