Morningstar | Onpattro Sales Pick Up the Pace for No-Moat Alnylam; Shares Look Attractive
There were no major surprises in Alnylam's first-quarter results, and we are maintaining our fair value estimate of $108 per share. First-quarter revenue of $33 million met our expectations, with Onpattro contributing $26 million. More than 400 patients are now on Onpattro treatment for polyneuropathy caused by hATTR amyloidosis since its launch in mid-2018. We believe that Onpattro sales could surpass $1 billion in the next five years given the high unmet need in this fatal rare disease, which would supply the company with healthy cash flow for reinvestment in its full pipeline. However, with only one marketed drug, we are maintaining our no-moat rating for the emerging biotech given the lack of diversification in its portfolio and its relatively unproven RNAi technology.Expenses were slightly higher than we had expected at over $222 million, and management increased its guidance for full-year research and development spending. We do not expect the company to be profitable until 2022 because of the considerable amount of ongoing and planned clinical trials. The company has six phase 3 trials either in progress or planned soon in various rare diseases, in addition to several earlier-stage candidates in the pipeline. Partnerships, such as the recently announced collaboration agreement with Regeneron in complement-mediated diseases, will mitigate some of the hefty costs associated with drug development.
The phase 3 results for givosiran in acute hepatic porphyria, released in April, showed a highly statistically significant reduction in attack rate relative to placebo, and Alnylam expects to file for U.S. approval in mid-2019. We weigh this opportunity with an 80% chance of approval and launch in early 2020. Later this year, we expect phase 3 results from lumasiran in primary hyperoxaluria, and we also expect to hear more details on the strategy of the new Regeneron partnership, which will focus on central nervous system and ocular disorders.
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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