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Why Is Alnylam (ALNY) Up 31.2% Since the Last Earnings Report?

A month has gone by since the last earnings report for Alnylam Pharmaceuticals, Inc. ALNY. Shares have added about 31.2% in that time frame, outperforming the market.

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

Alnylam Q1 Loss Wider than Expected, Revenues Up year over year

Alnylam reported a loss of $1.25 per share in the first quarter of 2017, wider than the Zacks Consensus Estimate of a loss of $1.22 and the year-ago loss of $1.21.

Quarterly revenues rose 160.3% to $19.0 million. However, revenues missed the Zacks Consensus Estimate of $28.0 million. Revenues in the quarter included $12.3 million earned under the company's collaboration agreement with Sanofi’s subsidiary, Genzyme, as well as $6.4 million from the company’s alliance with The Medicines Company, and $0.3 million from other sources.

Quarter in Detail

Research and development (R&D) expenses fell 9.7% from the year-ago period to $87 million primarily due to lower expenses related to lower stock-based compensation expenses and external services expenses related to pre-clinical activities.

General and administrative (G&A) expenses increased 82.5% to $38.5 million. The increase was primarily due to higher compensation as headcount was increased to support growth. Further, expenses also increased fto prepare for  potential launch of patisiran.

Guidance

Alnylam expects its cash, cash equivalents and marketable securities (including restricted investments) to be greater than $700 million at the end of the year.

Pipeline

Alnylam has been making progress as far as the development of its candidates is concerned. The company reported positive clinical results with fitusiran for haemophilia in Feb 2017. In Mar 2017, the European Medicines Agency (EMA) granted givosiran (ALN-AS1) PRIME Designation for accelerated assessment for the treatment of porphyria based on positive data from a phase I study.

Additionally, the company along with The Medicines Company also reported positive final clinical data from Orion-1 phase II study on inclisiran for hypercholesterolemia. Inclisiran significantly reduced LDL-C and sustained over time. Subsequent to the quarter, in Apr 2017, The Medicines Company announced an agreement with the FDA on plans for phase III study on inclisiran. The primary endpoint will be change in LDL-C from baseline.

The company expects 2017 to be a pivotal year with its first phase III data read out – APOLLO for its late-stage pipeline candidate patisiran by mid-2017 and expects to submit applications for regulatory approvals in the U.S. and Europe at year-end.

How Have Estimates Been Moving Since Then?

Following the release, investors have witnessed an upward trend in fresh estimates. There have been two revisions higher for the current quarter.

Alnylam Pharmaceuticals, Inc. Price and Consensus

 

VGM Scores

At this time, the stock has a poor Growth Score of 'F', however its momentum is doing a lot better with a 'C'. The stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.

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

Our style scores indicate that the stock is solely suitable for momentum investors.

Outlook

Estimates have been trending upward for the stock. The magnitude of these revisions also looks promising. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.


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