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Loss Widens at Alnylam, Sales Fall

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Alnylam Pharmaceuticals Inc.’s (ALNY - Free Report) fourth quarter 2012 loss of $1.20 per share was narrower than the Zacks Consensus Estimate of a loss of $1.70. The loss was however wider than the year-ago loss of 33 cents per share. The wider year-over-year loss was primarily attributable to lower revenues.

In 2012, Alnylam reported a loss of $2.11 per share, wider than the year-ago loss of $1.36 per share. The company’s 2012 loss was narrower than the Zacks Consensus Estimate of a loss of $2.61. In 2012, Alnylam’s total revenue came in at $66.7 million, down 24% year over year. The Zacks Consensus Estimate of $71 million was higher than the company’s full year revenue.

Quarter in Detail

Revenues for the reported quarter fell 58.5% from the prior year to $8.5 million. Revenues were also short of the Zacks Consensus Estimate of $13 million. The sharp decline in revenues during the quarter was primarily due to the absence of collaborative revenue from its alliance with Roche Holding (RHHBY - Free Report) , which ended in the third quarter of 2012.

Revenues in the final quarter of 2012 included $6.9 million from the company’s alliance with a couple of companies, in addition to $1.6 million of expense reimbursement and amortization revenues from Cubist Pharmaceuticals Inc. , among others.

Research and development (R&D) expenses fell approximately 8.5% to $21.7 million. The reduction was primarily due to lower compensation expenses from the company’s corporate restructuring in January last year.

General and administrative (G&A) expenses in the reported quarter decreased approximately 4.7% year over year to $10.2 million. The decrease in G&A expenses was primarily attributable to lower consulting and professional services expenses. Alnylam expects G&A expenses to decline considerably in 2013.

Public Offering

Alnylam raised approximately $174 million from a public offering of shares of its common stock last month. The company intends to utilize the net proceeds from the transactions to develop its pipeline.

2013 Cash Balance Projection

Alnylam expects to end 2013 with cash, cash equivalents and total marketable securities in excess of $320 million.

The company is expecting several study results based on its ribo nucleic acid interference (RNAi) therapeutic candidates in the next two years. We expect investor focus to remain on the successful development of the pipeline.

Alnylam carries a Zacks Rank #4 (Sell). Targacept Inc. is an example of a better positioned pharma stock. It carries a Zacks Rank #1 (Strong Buy).

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