It has been about a month since the last earnings report for Alnylam Pharmaceuticals (ALNY). Shares have added about 9.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Alnylam due for a pullback? 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 Q3 Loss Narrower Than Expected, Sales Miss
Alnylam incurred a loss of $1.56 per share (excluding stock-based compensation expenses), wider than the year-ago loss of $1.06 but narrower than the Zacks Consensus Estimate of a loss of $1.73.
Quarterly revenues declined 87.9% to $2.1 million and missed the Zacks Consensus Estimate of $19 million. The top line in the quarter included net product revenues of $0.5 million from sales of Onpattro which was approved by the FDA in August.
Revenues also included $1.6 million earned under the company's collaboration agreement. The company has collaboration agreements with subsidiary, Genzyme and the Medicine Company.
Quarter in Detail
Adjusted research and development (R&D) expenses increased 17.5% from the year-ago period to $94.2 million. Adjusted general and administrative (G&A) expenses increased 102.2% from the year-ago quarter to $74.4 million.
Alnylam reaffirmed its 2018 guidance. The company is on track to end the year with approximately $1 billion in cash, cash equivalents and marketable debt securities, restricted cash, and restricted investments, excluding equity securities. Adjusted R&D expenses guidance was reiterated to be $420-$460 million. The company reiterated its outlook for adjusted selling, general and administrative expenses to be $280-$320 million.
During the quarter, the company received FDA approval for the first-ever regulatory approval of an RNAi therapeutic, Onpattro for the treatment of the polyneuropathy of hereditary transthyretin-mediated (hATTR) amyloidosis in adults. The candidate also received approval in the EU for the treatment of hATTR amyloidosis in adult patients with stage 1 or 2 polyneuropathy. The company also submitted a new drug application (NDA) to Japan's Pharmaceuticals and Medical Devices Agency for Onpattro, and received a priority review designation in Canada for the same.
The company is on track to start the HELIOS-A study in late 2018 on ALN-TTRsc02, a subcutaneously administered investigational RNAi therapeutic. Alnylam also plans to initiate additional phase III studies on the candidate in hereditary and wild-type ATTR amyloidosis cardiomyopathy in 2019.
The company announced positive top-line results from the interim analysis of the ENVISION phase III study on givosiran, an investigational RNAi therapeutic in development for the treatment of acute hepatic porphyrias (AHPs). The company plans to initiate a rolling submission of an NDA and pursue full approval based on complete results - now expected in early 2019 - from the ENVISION phase III study. The rolling NDA submission is expected to be initiated in 2018, with full clinical sections submitted in mid-2019, assuming positive results.
Alnylam initiated ILLUMINATE-A, a global phase III study of lumasiran in children and adults with primary hyperoxaluria type 1 (PH1). The company expects to report top-line results from the study in late 2019, and if positive, will submit filings for global regulatory approvals starting in early 2020.
In October 2018, Alnylam's partner, The Medicines Company announced that the Independent Data Monitoring Committee for the ongoing inclisiran phase III clinical trials (ORION 9, 10, and 11) conducted its fourth planned review of safety and efficacy data from the studies and recommended that the studies continue without modification.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -9.93% due to these changes.
At this time, Alnylam has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the lowest 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.
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Alnylam has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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