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Morningstar | Alnylam's robust late-stage RNA-based drug portfolio supports a burgeoning moat.

Alnylam Pharmaceuticals is a pioneer in designing therapeutics based on RNA interference, a mechanism that occurs naturally in cells and silences overexpressed genes, such as cancer-inducing or viral genes. Alnylam seeks to capitalize on the therapeutic potential of RNAi by creating small interfering RNA that can treat disease at the genetic level. If siRNA reaches its intended target, it can silence the gene that it contains code for, making it a potentially game-changing technology for tough-to-treat diseases.Intellectual property will be critical in determining who benefits from the commercialization of RNAi therapeutics. Alnylam has an increasingly dominant position, particularly following the purchase of Merck's RNAi assets. Early high-profile deals with several large pharma firms ended poorly--Roche terminated its work in siRNA as part of a cost-cutting initiative, and Novartis opted not to bring Alnylam's technology in house after their research collaboration ended--but we think Alnylam's progress on delivery of its therapies to liver cells has enabled a turnaround. In 2014, the firm announced a broad alliance with Sanofi, bringing in a strong partner in rare-disease drug development and commercialization as well as a $700 million equity investment. Further, in 2018, Alnylam brought the first-ever siRNA to FDA approval with patisiran.While the firm's revusiran program in hereditary ATTR amyloidosis patients with cardiomyopathy was discontinued in late 2016 due to lack of efficacy, patisiran (for hereditary ATTR amyloidosis patients with symptomatic polyneuropathy, which results in nerve degeneration) was approved in the U.S. in August, with Europe expected to follow in September. The company also has fitusiran in hemophilia and givosiran in hepatic porphyrias in pivotal trials. In addition, Alnylam's partner The Medicines Company has advanced inclisiran development for hypercholesterolemia in phase 3 trials, as well. The remaining Alnylam pipeline using this technology still looks promising, in our view. The company has other trial programs targeting complement-mediated diseases, hepatitis B, and rare genetic disorders.