Alnylam Pharmaceuticals Reports First Quarter 2013 Financial Results
Alnylam Pharmaceuticals, Inc.
. (Nasdaq: ALNY), a leading RNAi therapeutics company, today reported its consolidated financial results for the first quarter 2013, and company highlights.
“This quarter we continued to execute on our ‘Alnylam 5x15’ product strategy, where we are advancing RNAi therapeutics toward genetically defined targets for diseases with limited treatment options for patients and their caregivers. With ALN-TTR02, we continued enrollment in our ongoing Phase II study and now expect to report initial results in late June. In addition, we remain on track to start our Phase III trial in familial amyloidotic polyneuropathy patients later this year. Further, we were very pleased this quarter to have initiated a Phase I clinical trial for ALN-TTRsc, a subcutaneously administered RNAi therapeutic for the treatment of transthyretin-mediated amyloidosis. Importantly, ALN-TTRsc represents Alnylam’s first RNAi therapeutic utilizing our proprietary GalNAc conjugate delivery platform to enter the clinic, as well as the industry’s first systemic RNAi therapeutic to be delivered subcutaneously,” said John Maraganore, Ph.D., Chief Executive Officer of Alnylam. “In addition, we continue to advance ALN-AT3, an RNAi therapeutic targeting antithrombin for the treatment of hemophilia and other rare bleeding disorders, and plan to present new pre-clinical data in July. Finally, we advanced ALN-AS1, an RNAi therapeutic targeting aminolevulinate synthase 1 for the treatment of porphyria, as a new ‘Alnylam 5x15’ program, and intend to report key pre-clinical data in May. In sum, the first quarter was a notable period of pipeline execution that now positions the company for a very data-rich period in the months to come, including an R&D Day we plan to host on July 11 in New York City.”
“In addition to the exciting clinical advancements we made in the past quarter, we also made excellent progress on the business and operational front. Specifically, we completed a very successful public offering of stock that strengthens our balance sheet for execution on our ‘Alnylam 5x15’ product strategy and continued retention of product rights in core programs that we aim to directly commercialize. Indeed, we continue to believe that Alnylam’s direct advancement of certain programs through clinical trials and to the market represents the best path for the patients we serve and the optimal value creation strategy for our shareholders,” said Barry Greene, President and Chief Operating Officer of Alnylam. “We are also pleased to have formed a strategic global alliance with The Medicines Company to advance ALN-PCS, an RNAi therapeutic targeting PCSK9 for the treatment of hypercholesterolemia. In aggregate, these recent business achievements strengthen our efforts in bringing innovative medicines to patients who currently have limited treatment options.”
At March 31, 2013, Alnylam had cash, cash equivalents and total marketable securities of $400.8 million, as compared to $226.2 million at December 31, 2012. In January 2013, the company sold an aggregate of 9,200,000 shares of its common stock through an underwritten public offering at a price to the public of $20.13 per share. As a result of the offering, the company received aggregate net proceeds of $173.6 million, after deducting underwriting discounts and commissions and other estimated offering expenses of $11.6 million.
The net loss according to accounting principles generally accepted in the U.S. (GAAP) for the first quarter of 2013 was $9.0 million, or $0.15 per share on both a basic and diluted basis (including $3.1 million, or $0.05 per share of non-cash stock-based compensation expense), as compared to a net loss of $11.4 million, or $0.25 per share on both a basic and diluted basis (including $3.2 million, or $0.07 per share of non-cash stock-based compensation expense), for the same period in the previous year.
Revenues were $18.6 million for the first quarter of 2013, as compared to $20.6 million for the first quarter of 2012. Revenues for the first quarter of 2013 included $9.7 million of collaboration revenues related to the company’s former alliance with Cubist, $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 $2.0 million for the company’s alliance with The Medicines Company, research reagent licenses, and other sources. In the first quarter of 2013, the company recognized the remaining revenue under its agreement with Cubist due to the termination of this agreement and the end of the company’s performance obligations thereunder. The company expects net revenues from research collaborators to decrease for the remainder of 2013 due to the recognition of the remaining Cubist agreement revenue during the first quarter of 2013.
Research and development (R&D) expenses were $22.2 million in the first quarter of 2013, which included $2.1 million of non-cash stock-based compensation, as compared to $21.1 million in the first quarter of 2012, which included $2.1 million of non-cash stock-based compensation. The increase in R&D expenses in the first quarter of 2013 as compared to the first quarter of the prior year was due primarily to additional expenses related to the advancement of the company’s ALN-TTR02, ALN-TTRsc, and ALN-AT3 programs. This increase was partially offset by a one-time charge, related to the company’s January 2012 strategic corporate restructuring, including employee severance, benefits, and other related costs, that was recorded during the first quarter of 2012.
General and administrative (G&A) expenses were $6.3 million in the first quarter of 2013, which included $1.0 million of non-cash stock-based compensation, as compared to $10.4 million in the first quarter of 2012, which included $1.1 million of non-cash stock-based compensation. The decrease in G&A expenses in the first quarter of 2013 as compared to the first quarter of the prior year was due primarily to a decrease in consulting and professional services related to business activities, primarily legal activities. Also included in the first quarter of 2012 is a one-time charge related to the company’s January 2012 strategic corporate restructuring, including employee severance, benefits, and other related costs. For the remainder of 2013, the company expects that general and administrative expenses will remain consistent with the first quarter.
Equity in loss of joint venture was zero for the first quarter of 2013 and $0.9 million for the first quarter of 2012. This was related to the company’s share of the net losses incurred by Regulus. The company no longer uses the equity method to account for its investment in Regulus because it no longer has significant influence over the operating and financial policies of Regulus. The company now accounts for its investment in Regulus at fair value by adjusting the value to reflect fluctuations in Regulus’ stock price each reporting period. At March 31, 2013, the fair market value of the company’s investment in Regulus was $47.7 million as compared to $38.7 million at December 31, 2012.
Interest income was $0.2 million for the first quarter of 2013 and 2012.
The company had a benefit from income taxes of $0.6 million for the first quarter of 2013 as compared to zero in the first quarter of 2012. The income tax benefit is associated with the corresponding increase in the value of the company’s investment in Regulus that the company recorded in other comprehensive income, net of tax.
The company expects that its cash, cash equivalents and total marketable securities balance will be greater than $320 million at December 31, 2013.
“Alnylam continues to maintain a very solid balance sheet, ending this first quarter with $401 million in cash,” said Michael Mason, Vice President, Finance and Treasurer of Alnylam. “In the quarter, we further strengthened our balance sheet with a public offering that resulted in net proceeds of approximately $174 million which will enable us to advance our ‘Alnylam 5x15’ product development and commercialization strategy. As for cash guidance this year, we expect to end 2013 with greater than $320 million.”
Management will provide an update on the company, discuss first quarter 2013 results, and discuss expectations for the future via conference call on Monday, May 6, 2013 at 4:30 p.m. ET. A corporate slide presentation will also be available on the News & Investors page of the company’s website, , to accompany the conference call. To access the call, please dial 877-312-7507 (domestic) or 631-813-4828 (international) five minutes prior to the start time and refer to conference ID 46570755. A replay of the call will be available beginning at 7:30 p.m. ET on Monday, May 6, 2013. To access the replay, please dial 855-859-2056 (domestic) or 404-537-3406 (international), and refer to conference ID 46570755.
RNAi (RNA interference) is a revolution in biology, representing a breakthrough in understanding how genes are turned on and off in cells, and a completely new approach to drug discovery and development. Its discovery has been heralded as “a major scientific breakthrough that happens once every decade or so,” and represents one of the most promising and rapidly advancing frontiers in biology and drug discovery today which was awarded the 2006 Nobel Prize for Physiology or Medicine. RNAi is a natural process of gene silencing that occurs in organisms ranging from plants to mammals. By harnessing the natural biological process of RNAi occurring in our cells, the creation of a major new class of medicines, known as RNAi therapeutics, is on the horizon. Small interfering RNA (siRNA), the molecules that mediate RNAi and comprise Alnylam’s RNAi therapeutic platform, target the cause of diseases by potently silencing specific mRNAs, thereby preventing disease-causing proteins from being made. RNAi therapeutics have the potential to treat disease and help patients in a fundamentally new way.
Alnylam is a biopharmaceutical company developing novel therapeutics based on RNA interference, or RNAi. The company is leading the translation of RNAi as a new class of innovative medicines with a core focus on RNAi therapeutics for the treatment of genetically defined diseases, including ALN-TTR for the treatment of transthyretin-mediated amyloidosis (ATTR), ALN-AT3 for the treatment of hemophilia and rare bleeding disorders (RBD), ALN-AS1 for the treatment of acute intermittent porphyria, ALN-PCS for the treatment of hypercholesterolemia, and ALN-TMP for the treatment of beta-thalassemia and iron-overload disorders. As part of its “Alnylam 5x15” strategy, the company expects to have five RNAi therapeutic products for genetically defined diseases in clinical development, including programs in advanced stages, on its own or with a partner by the end of 2015. Alnylam has additional partnered programs in clinical or development stages, including ALN-RSV01 for the treatment of respiratory syncytial virus (RSV) infection and ALN-VSP for the treatment of liver cancers. The company’s leadership position on RNAi therapeutics and intellectual property have enabled it to form major alliances with leading companies including Merck, Medtronic, Novartis, Biogen Idec, Roche, Takeda, Kyowa Hakko Kirin, Cubist, Ascletis, Monsanto, Genzyme, and The Medicines Company. In addition, Alnylam holds an equity position in Regulus Therapeutics Inc., a company focused on discovery, development, and commercialization of microRNA therapeutics. Alnylam has also formed Alnylam Biotherapeutics, a division of the company focused on the development of RNAi technologies for applications in biologics manufacturing, including recombinant proteins and monoclonal antibodies. Alnylam’s VaxiRNA™ platform applies RNAi technology to improve the manufacturing processes for vaccines; GlaxoSmithKline is a collaborator in this effort. Alnylam scientists and collaborators have published their research on RNAi therapeutics in over 100 peer-reviewed papers, including many in the world’s top scientific journals such as , , , and . Founded in 2002, Alnylam maintains headquarters in Cambridge, Massachusetts. For more information, please visit .
The “Alnylam 5x15” strategy, launched in January 2011, establishes a path for development and commercialization of novel RNAi therapeutics to address genetically defined diseases with high unmet medical need. Products arising from this initiative share several key characteristics including: a genetically defined target and disease; the potential to have a major impact in a high unmet need population; the ability to leverage the existing Alnylam RNAi delivery platform; the opportunity to monitor an early biomarker in Phase I clinical trials for human proof of concept; and the existence of clinically relevant endpoints for the filing of a new drug application (NDA) with a focused patient database and possible accelerated paths for commercialization. By the end of 2015, the company expects to have five such RNAi therapeutic programs in clinical development, including programs in advanced stages, on its own or with a partner. The “Alnylam 5x15” programs include ALN-TTR for the treatment of transthyretin-mediated amyloidosis (ATTR), ALN-AT3 for the treatment of hemophilia and rare bleeding disorders (RBD), ALN-AS1 for the treatment of acute intermittent porphyria (AIP), ALN-PCS for the treatment of hypercholesterolemia, ALN-TMP for the treatment of beta-thalassemia and iron-overload disorders, and other programs. Alnylam intends to focus on developing and commercializing certain programs from this product strategy itself in North and South America, Europe, and other parts of the world; these include ALN-TTR, ALN-AT3, and ALN-AS1; the company will seek global development and commercial alliances for other programs.
Various statements in this release concerning Alnylam’s future expectations, plans and prospects, including without limitation, Alnylam’s expectations regarding its “Alnylam 5x15” product strategy, Alnylam’s views with respect to the potential for RNAi therapeutics, including ALN-TTR02, ALN-TTRsc, ALN-AT3, ALN-AS1, ALN-TMP, ALN-AAT, ALN-VSP, ALN-PCS02, and ALN-PCSsc, its expectations with respect to the timing and success of its clinical and pre-clinical trials, the expected timing of regulatory filings, including its plan to file IND or IND equivalent applications and initiate clinical trials for ALN-AT3 and ALN-AS1, its expectations regarding reporting of data from its clinical studies, including its ALN-TTR02 and ALN-TTRsc studies, and its pre-clinical studies, including its ALN-AT3 and ALN-AS1 studies, its plans to seek a partner for its ALN-TMP and ALN-AAT programs, and other “Alnylam 5x15” programs, its expectations regarding the receipt of upfront and potential milestone and royalty payments under its agreement with The Medicines Company, its expectations regarding the potential market opportunity for ALN-AS1, its views with regard to the strength, enforceability, and validity of its intellectual property estate, and its expected cash position as of December 31, 2013, constitute forward-looking statements for the purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including, without limitation, Alnylam’s ability to manage operating expenses, Alnylam’s ability to discover and develop novel drug candidates and delivery approaches, successfully demonstrate the efficacy and safety of its drug candidates, the pre-clinical and clinical results for its product candidates, which may not support further development of product candidates, actions of regulatory agencies, which may affect the initiation, timing and progress of clinical trials, obtaining, maintaining and protecting intellectual property, Alnylam’s ability to enforce its patents against infringers and defend its patent portfolio against challenges from third parties, obtaining regulatory approval for products, competition from others using technology similar to Alnylam’s and others developing products for similar uses, Alnylam’s ability to obtain additional funding to support its business activities and establish and maintain strategic business alliances and new business initiatives, Alnylam’s dependence on third parties for development, manufacture, marketing, sales and distribution of products, the outcome of litigation, and unexpected expenditures, as well as those risks more fully discussed in the “Risk Factors” filed with Alnylam’s current report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 19, 2013 and in other filings that Alnylam makes with the SEC. In addition, any forward-looking statements represent Alnylam’s views only as of today and should not be relied upon as representing its views as of any subsequent date. Alnylam explicitly disclaims any obligation to update any forward-looking statements.
This selected financial information should be read in conjunction with the consolidated financial statements and notes thereto included in Alnylam’s Annual Report on Form 10-K which includes the audited financial statements for the year ended December 31, 2012.