Making Sense of Alnylam’s Recent Stock Surge

Making Sense of Alnylam’s Recent Stock Surge May 26, 2016
By Mark Terry, BioSpace.com Breaking News Staff

Cambridge, Massachusetts - Alnylam Pharmaceuticals jumped recently, and analysts are trying to figure out why. Shares are currently trading for $70.07 after being at $52.37 on May 12. Shares have been fairly volatile over the last year, although the trend has been largely downward.

Some of the pop might be related to the company’s May 2 first-quarter financials. The company has quite a bit of cash. “Alnylam continues to maintain a strong balance sheet, ending the first quarter of 2016 with approximately $1.2 billion in cash,” said Michael Mason, the company’s vice president of finance, and treasurer, in a statement. “Our financial strength allows us to continue to invest in a broad pipeline of investigational RNAi therapeutics across our three STArs, aligned with achievement of our ‘Alnylam 2020’ goals.”

The company also has 10 programs in clinical development with two programs in Phase III clinical trials. “A major milestone in the first quarter was completion of enrollment in our APOLLO Phase III trial for patisiran, and we’re on track to view results in mid-2017,” said John Maraganore, Alnylam’s chief executive officer, in a statement. “If positive, we expect to file our first regulatory applications for approval later that same year. We’re also making strong progress in our ENDEAVOUR Phase III trial of revusiran, where we now expect completion of enrollment in late 2016 and data readout in mid-2018.’’

The company also expects to present “important new results” in July for its fitusiran program in hemophilia, with plans to start two Phase III studies afterwards.

It’s also possible that a recent JPMorgan Chase & Co. report on Alnylams’s competitor, Ionis Pharmaceuticals , has more attention turning to Alnylam. And The Motley Fool recently wrote a comparison of the two companies. Both companies focus on drugs that target RNA. Ionis has been working on its platform for more than 20 years, which utilizes antisense to bind a single-stranded oligonucleotide to the RNDA molecule. Alnylam uses RNA interference (RNAi), where a double-stranded RNA molecule is attached to a protein complex.

It seems that Ionis has an edge, partly due to the length of time it’s been grappling with the numerous technical obstacles presented by RNA-based drugs. The Motley Fool points out that Ionis has about 40 drugs in its pipeline, while Alnylam has about 18.

Although The Motley Fool thinks Ionis is a winner in a head-to-head comparison, it noted that Alnylam’s approach may have an edge with its Phase III drugs, “and that’s probably why their pipelines are valued the same despite the size differential. But, it isn’t clear that the extra boost will produce a clinical benefit, and Ionis has a next-generation technology that’s substantially more potent than what’s in its Phase III drugs.”

But The Motley Fool’s Brian Orelli writes, “While Ionis looks like a better investment to me, that’s not to say Alnylam won’t do well from here. With about $1 billion in the bank, the biotech has a nice runway to develop its drugs. There’s certainly no reason an investor can’t have a stake in both—The Motley Fool does.”

Another factor, and an admittedly fuzzy one, is related to Paris-based Sanofi ’s very aggressive pursuit of San Francisco’s Medivation . Sanofi owns about 12 percent of Alnylam stock, but it’s hard to see what the connection between Alnylam’s stock increase and Sanofi’s hostile takeover attempt of Medivation might be. Bloomberg suggests that Sanofi’s quest for Medivation, with the possibility of competition for the company from Celgene and Gilead Sciences , as well as Pfizer , might indicate that merger and acquisition activity in biotechnology might start picking up.

Back to news