Morningstar | Alnylam Reports Positive Givosiran Data; Higher Chance of Approval Leads to Increased FVE of $117
On Sept. 27, Alnylam Pharmaceuticals reported results from the Envision phase 3 study of givosiran in acute hepatic porphyrias and indicated its intent to file for accelerated approval by year-end. Although detailed results won't be read out until early 2019, positive results for this rare disease lead us to increase the chance of givosiran's approval from 65% to 80%. The higher chance of approval and our assumption of a six-figure price tag comparable with that of recently approved patisiran result in a new fair value estimate of $117 per share, up from $110. We are maintaining our no-moat rating.The shares were initially slightly down on the news, which we believe may signal the market's concerns about safety or how difficult it is to diagnose the disease. Alnylam reported five patients (22%) experiencing serious side effects on givosiran compared with two placebo patients (10%), and one patient who discontinued treatment due to an elevated liver enzyme level, which was resolved. While we'll be watching for further detail on safety in the 2019 readout, we note that the serious effect of acute intermittent porphyria, symptoms of which include attacks of excruciating abdominal pain and vomiting, paired with a lack of approved treatment options, results in a serious unmet need where patients can benefit from an efficacious drug with convenient, once-a-month, subcutaneous dosing. Further, we model modest penetration in the first couple of years after potential launch before awareness and diagnosis improve. With overplayed market concerns offering a margin of safety to our $117 fair value estimate and high uncertainty rating, the shares are currently trading in 4-star territory.
Alnylam Pharmaceuticals is a commercial-stage biopharmaceutical company developing therapeutics based on RNA interference (RNAi). RNAi is a biological pathway within cells for sequence-specific silencing and regulation of gene expression. The company has two RNAi-based medicines, ONPATTRO? (patisiran) and GIVLAARI? (givosiran). ONPATTRO is approved by the United States Food and Drug Administration (FDA) for the treatment of the polyneuropathy of hereditary transthyretin-mediated amyloidosis in adults and has also been approved in the European Union, Japan, Canada and Switzerland. GIVLAARI is approved by FDA for the treatment of adults with acute hepatic porphyria.
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