Alnylam Pharmaceuticals Stock Forecast: RNAi is broadly considered one of the most promising and briskly advancing areas in biology and drug development today. It offers a potent, clinically corroborated approach for the treatment of a wide range of incapacitating diseases with severely restricted treatment options.
Offering a completely new approach to drug discovery and development, RNA interference (RNAi) studies how genes are regulated in cells. In fact, the 2006 Nobel Prize for Physiology or Medicine was awarded to Craig Mello and Andrew Fire for their work in RNA interference (RNAi).
RNAi therapies offer the potential to block the production of disease-causing proteins, marking a significant leap in disease control and intervention. RNAi Alnylam, which is derived from “Alnilam” – the Arabic word for “string of pearls” – has a deep pipeline of investigational medicines, including 6 programs in late-stage clinical development.
What Does Alnylam Pharmaceuticals Do?
Alnylam Pharmaceuticals, Inc. is a fast growing biopharmaceutical company focused on the discovery, development and commercialization of novel ribonucleic acid (RNA) interference (RNAi) therapeutics to treat patients with debilitating diseases and limited or inadequate treatment options.
It emphasizes on the translation of RNAi as a new class of innovative medicines with a core focus on RNAi therapeutics for the treatment of genetic diseases. The Cambridge, Massachusetts-based company was founded by John Kennedy Clarke, Paul R. Schimmel and Phillip A. Sharp in 2002. In 2016, Forbes included the company on its list of “100 Most Innovative Growth Companies“.
Muthiah (Mano) Manoharan, Ph.D., Senior Vice President of Drug Innovation Chemistry at Alnylam, was recently awarded the 2019 Lifetime Achievement Award from the Oligonucleotide Therapeutics Society (OTS), which is an open, non-profit organization to foster academia and industry-based research and development of oligonucleotide therapeutics.
Is Alnylam Pharmaceuticals A Buy?
Alnylam Pharmaceuticals, Inc. [Nasdaq: ALNY] reported its consolidated financial results for the second quarter in June 2019.
The company had cash and cash equivalents on its balance sheet of approximately $2.0 billion, augmented by brisk ONPATTRO sales.
ONPATTRO is a medicine used for the treatment of polyneuropathy caused by hereditary transthyretin-mediated amyloidosis (hATTR amyloidosis).
Net product revenues from sales of ONPATTRO were $38.2 million in the second quarter of 2019.
Alnylam Chart Analysis: Quickview
- 30-day high of the ALNY stock price: high of $87.10 and low of $73.32.
- 90-day high of $88.00 and low of $69.11.
- 52-week high of $96.08 and low of $60.27.
In May 2019, Alnylam Pharmaceuticals, Inc. [Nasdaq: ALNY] received an upfront collaboration payment from Regeneron of $400 million. In addition, Regeneron purchased $400 million of Alnylam equity at a price per share of $90.00.
Ending the second quarter, Alnylam had cash, cash equivalents and marketable debt securities, and restricted investments, excluding equity securities of $1.97 billion, as compared to $1.13 billion in December 31, 2018.
The GAAP net loss for the second quarter of 2019 was $219.5 million, or $2.02 per share, as compared to a net loss of $163.6 million, or $1.63 per share, for the same period in the previous year.
The non-GAAP net loss for the second quarter of 2019 was $198.3 million, or $1.83 per share, as compared to net loss of $161.9 million, or $1.61 per share, for the same period in the previous year. Analysts were expecting a loss of $1.81.
Research and development (R&D) expenses were $163.9 million in the second quarter of 2019 as compared to $137.6 million in the second quarter of 2018.
2019 Updated Financial Guidance
Alnylam Pharmaceuticals, Inc. [Nasdaq: ALNY] is updating its 2019 annual non-GAAP R&D expenses to be in the range of $550 to $575 million (previously $550 to $590 million).
The company expects its current cash, cash equivalents and marketable debt securities will support company operations for multiple years based upon its current operating plan.
Alnylam Pharmaceuticals, Inc ended 2019-10-22 at $84.780. Analysts estimate the stock of Alnylam to rise around 4.75% during the next three months with a high probability of the price staying between a low of $78.44 to a high of $93.63 at the end of this period.
The RNA interference drug developer has beaten consensus EPS estimates three times in the last four quarters.
Risks of Buying Alnylam Pharmaceuticals
Investors generally equate risk with volatility, though experts pay more attention to debt when weighing in the risk factor.
What Is Alnylam Pharmaceutical’s Net Debt?
Alnylam Pharmaceuticals, Inc. [Nasdaq: ALNY] had US$30.0 million in debt in March 2019, about the same as the year before. But it has cash and cash equivalents on its balance sheet of approximately $2.0 billion, leading to enough cash surplus.
In other words, it has surplus liquid assets in comparison to its liabilities. A lighter debt load means it can easily eliminate its debt without much difficulty.
So How Risky Is Alnylam Pharmaceuticals
Businesses losing money are considered to be riskier. And we are aware of the fact that the biopharmaceutical firm has negative earnings before interest and tax (EBIT), over the last year.
Its accounting loss for the second quarter of 2019 was $219.5 million, or $2.02 per share, as compared to a net loss of $163.6 million, or $1.63 per share, for the same period in the previous year.
However, it has net cash of around US$1.7 billion, which means it is comfortably placed and unlikely to need more capital. Even though its balance sheet seems sufficiently liquid, analysts and investors would love to witness growth in revenue.
Product Risk
It is to be noted that ONPATTRO so far has been the only successful product of Alnylam.
The company as such relies on partnerships with companies like Sanofi [NASDAQ:SNY], Takeda and Monsanto for a larger pie of its revenues.
Moreover, Alnylam has no monopoly over the development of RNAi-based therapeutics. Companies like Ionis, Sarepta Therapeutics and Roche Innovation Center also operate in the same field.
Alnylam Pharmaceuticals Stock Forecast Summary
Alnylam stock has failed to perform as per market expectations this year so far. So what’s the forecast for ALNY now?
One reliable measure that could guide investors in the right direction is the company’s earnings outlook for the coming quarters as well as the sway in expectations.
Based on this, analysts expect the stocks to perform according to market expectations in the near future. The current consensus EPS estimate is -$1.81 on $52.91 million in revenues for the coming quarter. It is -$7.42 on $188.31 million in revenues for the current fiscal year.
Investors should take note that the industry in which the company is operating also has a significant bearing on the company’s stocks. Biomedical and Genetics is expected to do well, which is a good sign for Alnylam stocks.
Also, Alnylam has quite a few important drugs approaching the finish line and emergence of even a single blockbuster drug can send share prices rocketing. However, things can turn out to be messy if the drugs fail to elicit the desired response from the market.
All said and done, Alnylam has a healthy balance sheet and exciting prospects in the pipeline.
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