News Column

Alnylam Pharmaceuticals Posts Second Quarter Results

August 14, 2014

Alnylam Pharmaceuticals has reported its consolidated financial results for the second quarter 2014, and company highlights.

In a release on August 7, the company noted that at June 30 Alnylam had cash, cash equivalents and total marketable securities of $955.9 million, as compared to $350.5 million at December 31, 2013. In February 2014, the company sold to Genzyme 8,766,338 shares of its common stock and received a cash payment of $700.0 million.

The non-GAAP net loss for the second quarter of 2014 was $48.0 million, or $0.63 per share on both a basic and diluted basis as compared to a non-GAAP net loss of $18.2 million, or $0.29 per share on both a basic and diluted basis for the same period in the previous year. The non-GAAP net loss for the second quarter of 2014 excludes the $3.9 million reduction to in-process research and development expense related to the purchase of the Sirna RNAi assets from Merck.

The net loss according to accounting principles generally accepted in the U.S. (GAAP) for the second quarter of 2014 was $44.1 million, or $0.58 per share on both a basic and diluted basis (including $7.7 million, or $0.10 per share of non-cash stock-based compensation expense), as compared to a net loss of $18.2 million, or $0.29 per share on both a basic and diluted basis (including $3.4 million, or $0.05 per share of non-cash stock-based compensation expense), for the same period in the previous year.

Revenues were $7.3 million for the second quarter of 2014, as compared to $8.7 million for the same period in the previous year. Revenues for the second quarter of 2014 included $5.5 million of revenues from the company's alliance with Takeda Pharmaceuticals Company Limited, $1.4 million of revenues related to the company's collaboration with Monsanto, and $0.4 million for the company's alliance with The Medicines Company, research reagent licenses, and other sources.

Research and development (R&D) expenses were $44.7 million in the second quarter of 2014, which included $2.6 million of non-cash stock-based compensation, as compared to $24.2 million in the second quarter of 2013, which included $2.2 million of non-cash stock- based compensation.

The increase in R&D expenses in the second quarter of 2014 as compared to the second quarter of 2013 was due primarily to additional expenses related to the significant advancement of certain of the company's clinical and pre-clinical programs. The company expects that R&D expenses will increase slightly for the second half of 2014 as certain of our programs move into late clinical stages.

In the second quarter of 2014, the company recorded a reduction of $3.9 million to in-process research and development expense in connection with the purchase of the Sirna RNAi assets from Merck. Upon the completion of certain technology transfer activities in the second quarter of 2014, the company issued 378,007 shares of common stock to Merck.

In the second quarter of 2014, the company re-measured the expense recorded in the first quarter of 2014 in connection with these shares using the price of the company's common stock on the issuance date. In future periods, there will be no additional charges recorded to in-process research and development related to the purchase of the Sirna RNAi assets from Merck.

General and administrative (G&A) expenses were $11.5 million in the second quarter of 2014, which included $5.1 million of non-cash stock-based compensation, as compared to $5.8 million in the second quarter of 2013, which included $1.2 million of non-cash stock- based compensation.

The increase in G&A expenses in the second quarter of 2014 as compared to the second quarter of 2013 was due primarily to higher non-cash stock-based compensation expense. Excluding non-cash stock- based compensation expense, the company expects that G&A expenses will remain consistent for the second half of 2014.

"During the second quarter and recent period, we continued to execute on our expanded 'Alnylam 5x15' product development strategy and reported on multiple significant clinical and pre-clinical data sets. As we continue enrolling patients in our APOLLO Phase 3 trial with patisiran, we were pleased to report positive initial data from our ongoing Phase 2 open-label extension (OLE) study, showing sustained knockdown of serum TTR protein levels in addition to a favorable tolerability profile. Patients in the OLE study have been treated for up to nine months, and there have been no discontinuations. Enrollment also continues in our ALN-TTRsc Phase 2 study in TTR cardiomyopathy and we remain on track to initiate our Phase 3 trial later this year," said John Maraganore, Ph.D., Chief Executive Officer of Alnylam. "Beyond our efforts in TTR amyloidosis, we were pleased to report positive top-line data with ALN-AT3, an RNAi therapeutic targeting antithrombin (AT) in development for the treatment of hemophilia and rare bleeding disorders, showing that a single, low subcutaneous dose resulted in statistically significant knockdown of AT, with a corresponding increase in peak thrombin generation that was temporally associated and consistent with the degree of target protein knockdown. In aggregate, these latest results from our clinical pipeline highlight what we believe to be the significant potential for RNAi therapeutics as a new class of genetic medicines. We very much look forward to sharing additional updates from our pipeline in the coming weeks and months, as we enter a data-rich back half of the year."

"In addition to advancements in our clinical pipeline, we also made strong progress with our pre-clinical programs. First, we were pleased to select our Development Candidate for ALN-CC5 - an RNAi therapeutic targeting complement C5 for the treatment of complement- mediated diseases - and we remain on track to file our IND for this program in late 2014. Our new pre-clinical results with ALN-PCSsc - an RNAi therapeutic targeting PCSK9 for the treatment of hypercholesterolemia - highlight the potential for once-monthly or possibly once-quarterly subcutaneous dosing which we believe has the potential to be disruptive in a significant emerging market; we expect to file a clinical trial application (CTA) for ALN-PCSsc later this year. In addition, we selected a Development Candidate for our ALN-AAT program - an RNAi therapeutic targeting alpha-1 antitrypsin (AAT) for the treatment of AAT deficiency associated liver disease - with the goal of filing an IND for this program in mid-2015, and we added ALN-HBV - an RNAi therapeutic targeting the hepatitis B viral (HBV) genome for the treatment HBV infection - as a new program with the goal of filing an IND around year-end 2015. All of these programs employ our Enhanced Stabilization Chemistry (ESC) GalNAc-conjugate technology, that enables subcutaneous dosing with increased potency, durability, and a wide therapeutic index, and we are very encouraged by the potent knockdown and durability results emerging from our programs utilizing this improved technology," said Barry Greene, President and Chief Operating Officer of Alnylam. "In addition to these pipeline advancements, we've had a very productive quarter with regard to our intellectual property estate, specifically with our McSwiggen and Manoharan patent families. These and other Alnylam-held patents are critical elements of our strategy to bring important medicines to patients and build value for our shareholders."

"Alnylam continues to maintain a very strong balance sheet, ending the second quarter with $956 million in cash," said Michael Mason, Vice President, Finance and Treasurer of Alnylam. "As previously guided, we remain on track to end 2014 with greater than $825 million in cash. We believe that this balance sheet allows us to invest in a broad pipeline of RNAi therapeutics and to maintain financial independence through to multiple product launches."

Alnylam Pharmaceuticals is a biopharmaceutical company developing novel therapeutics based on RNA interference, or RNAi.

More information and complete details:

www.alnylam.com

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