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Why Is Alnylam (ALNY) Down 14.8% Since Last Earnings Report?

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A month has gone by since the last earnings report for Alnylam Pharmaceuticals (ALNY - Free Report) . Shares have lost about 14.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Alnylam due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Alnylam (ALNY - Free Report) Beats on Q2 Earnings, Narrows Sales Guidance

Alnylam incurred a loss of $1.56 per share in the second quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of $1.82. The loss includes stock-based compensation expenses and unrealized gains on equity securities and gainsfroma contractual settlement. Excluding these items, adjusted loss was $1.67 per share, narrower than the adjusted loss of $1.83 in the year-ago quarter.

The company recorded revenues of 103.9 million, which beat the Zacks Consensus Estimate of $99 million. In the year-ago quarter, revenues were $44.7 million. Net product revenues were $77.5 million, up 102.8% year over year, driven by higher sales of Onpattro (patisiran) and the U.S. commercial launch and initial European launch of Givlaari (givosiran). Net revenues from collaborators were $26.4 million due to revenues recognized under collaborations with Regeneron Pharmaceuticals and Vir Biotechnology.

Quarter in Detail

Onpattro is a lipid complex injection, which was approved for the treatment of polyneuropathy of hereditary transthyretin-mediated (hATTR) amyloidosis in 2018. The injection recorded sales of $66.5 million in the second quarter, up 74% year over year driven by patient growth and expansion in new markets.

Givlaari (givosiran) is Alnylam’s second product and was approved for the treatment of acute hepatic porphyria (AHP) in the United States in November last year and Europe in March 2020. In the second quarter, Givlaari received marketing authorization approval in Brazil for the treatment of AHP in adults. It recorded sales of $110 million in the second quarter of 2020. Alnylam said it is witnessing impressive demand for the drugin the United States and launchedit in Germany.

Adjusted research and development expenses (R&D) reduced to $139.2 million from $148.6 million in the year-ago quarter.

Adjusted selling, general and administrative expenses (SG&A) rose to $109.6 million from $97.4 million in the year-ago quarter. The increase was due to increased investments in commercial and medical affairs activity to support the ongoing launches of Onpattro and Givlaari and initial launch preparation activities for lumasiran.

2020 Guidance

Alnylam narrowed its revenue expectations for Onpattro from $280-$315 million to $270-$300 million.

Pipeline & Collaboration Updates

The company is developing inclisiran for hypercholesterolemia in partnership with The Medicines Company, which was acquired by Novartis in January 2020. Alnylam has submitted regulatory applications for inclisiran to the FDA and the EMA. The applications are under review.

The company is also evaluating several other candidates. In April, Alnylam completed a rolling submission of the NDA, seeking approval for lumasiran as a treatment for primary hyperoxaluria type 1 (PH1) in the United States. The company also filed a marketing authorization application (MAA) seeking approval for the candidate in Europe. Both applications are now accepted. The FDA also granted Priority Review tothe NDA and set an action date of Dec 3, 2020. The EMA granted an accelerated assessment for the lumasiran MAA.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

Currently, Alnylam has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Alnylam has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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