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Morningstar | Alnylam's Patisiran Makes Biotech History With FDA Approval in Amyloidosis; Maintaining $110 FVE

Twenty years after the discovery of RNA interference, Alnylam's patisiran was approved by the FDA on August 10 for peripheral nerve disease (polyneuropathy) caused by hATTR amyloidosis. Not only is patisiran (marketed as Onpattro) the first approved therapy for polyneuropathy caused by hATTR amyloidosis, but it is also the first approved RNA interference therapy, marking a watershed moment for the novel class of drugs. In addition to approval in the U.S., both the CHMP and the U.K.'s MHRA granted patisiran a positive opinion ahead of the European Commission's decision in September. With these breakthrough approvals, Alnylam will benefit from a first mover advantage in this rare indication. Our model already takes into account approval in both the U.S. and Europe for polyneuropathy, so we are maintaining our fair value estimate of $110 per share. This approval is a turning point for the emerging class of drugs and highlight's Alnylam's positive moat trend. We continue to believe the firm does not warrant an economic moat due to the uncertain future of RNA interference and heavy competition from Ionis, Pfizer, and others.

While we estimate there are tens of thousands of patients with hATTR amyloidosis worldwide, the rare disease is extremely difficult to diagnose at this point, which narrows the near-term addressable patient population. With time, we expect increased awareness and education to advance early and proper diagnosis. Management estimates that there are about 3,000 patients diagnosed with hATTR in the U.S. today, but approval in Europe and better diagnosis will expand this market. Alnylam has announced a value-based agreement with insurers in which Alnylam receives full price if patients respond well to the drug, but if patients do not, payers will get an additional discount. Patisiran's list price in the U.S. will be $450,000, but we expect this to be brought down with discounts and global commercialization and model worldwide pricing of $250,000 through our explicit forecast period. Pending approval in Europe, we expect patisiran to achieve worldwide sales of $1 billion by 2022. We continue to believe that patisiran's efficacy and safety profile looks attractive compared to its competitors from Pfizer and Ionis and look forward to seeing Pfizer's data for tafamidis, expected later this month.