Executive Summary / Key Takeaways

• Alnylam is executing on its P5x25 strategy, transitioning to a top-tier, sustainably profitable biotech company driven by its differentiated RNAi platform and expanding commercial portfolio.
• The recent U.S. FDA approval of AMVUTTRA for ATTR amyloidosis with cardiomyopathy (ATTR-CM) marks a transformative milestone, significantly expanding the market opportunity for the flagship TTR franchise and accelerating revenue growth.
• Strong commercial performance in Q1 2025, with 28% total product revenue growth and 36% TTR franchise growth, underscores robust demand for existing products and provides a strong foundation for the ATTR-CM launch.
• A deep and expanding pipeline, including late-stage zilebesiran and nucresiran, leverages the company's technological edge in RNAi delivery to target multi-billion dollar opportunities beyond TTR and liver-directed therapies.
• While facing intense competition and execution risks inherent in biotech, Alnylam's reiterated 2025 guidance, projecting over $2 billion in product sales and sustainable non-GAAP operating profitability, signals confidence in its strategic trajectory and commercial execution capabilities.

The Dawn of a New Era: Alnylam's RNAi Revolution Takes Center Stage

Alnylam Pharmaceuticals stands at a pivotal juncture, poised to leverage its pioneering work in RNA interference (RNAi) therapeutics to become a leading force in the biopharmaceutical industry. Since its inception in 2002, the company has been dedicated to harnessing the natural biological pathway of RNAi to silence disease-causing genes upstream of traditional medicines. This revolutionary approach, utilizing small interfering RNA (siRNA), aims to prevent the production of implicated proteins, offering a potentially transformative therapeutic modality across a broad spectrum of diseases.

The company's journey has evolved from a research-focused entity to a multi-product, global commercial enterprise. This evolution is underpinned by a strategic focus on building a deep and sustainable clinical pipeline and a robust research engine. Alnylam's foundational strength lies in its proprietary RNAi technology platform, particularly its sophisticated delivery mechanisms. While initial efforts focused on hepatic delivery using N-acetylgalactosamine (GalNAc) conjugates (used in products like GIVLAARI, OXLUMO, and the TTR franchise) and lipid nanoparticles (LNP, used in ONPATTRO), the company is actively advancing approaches for extrahepatic delivery to tissues such as the central nervous system (CNS), eye, heart, skeletal muscle, and adipose tissue. For CNS and ocular delivery, a C16 conjugate approach is being explored.

These technological advancements offer tangible benefits. For instance, the GalNAc conjugate technology enables subcutaneous administration and potent, durable gene silencing in the liver, leading to infrequent dosing schedules (e.g., quarterly for AMVUTTRA, potentially biannual/annual for nucresiran). Clinical data for nucresiran, a next-generation TTR silencer, demonstrated rapid TTR knockdown exceeding 90% sustained through Day 180, supporting less frequent dosing and potentially improved efficacy. The HELIOS-B study of vutrisiran (AMVUTTRA) in ATTR-CM showcased the power of RNAi to impact cardiovascular outcomes, including a statistically significant 35-36% reduction in all-cause mortality and benefits on functional capacity (KCCQ, 6MWT), highlighting the clinical relevance of deep and sustained TTR knockdown. These quantifiable benefits contribute directly to Alnylam's competitive moat, potentially allowing for differentiated product profiles that enhance market positioning and support premium pricing, ultimately driving financial performance.

Alnylam operates within a highly competitive and rapidly changing biopharmaceutical landscape. Key direct competitors include companies developing RNA-based therapies like Ionis Pharmaceuticals (IONS) with its antisense technology, as well as larger pharmaceutical companies with broad portfolios and significant R&D capabilities such as Regeneron Pharmaceuticals (REGN), Novartis (NVS), and Sanofi (SNY), some of whom are also collaborators. Indirect competition comes from companies developing alternative modalities like gene editing (e.g., CRISPR Therapeutics (CRSP)) or traditional small molecule/antibody therapies (e.g., Pfizer (PFE)).

While competitors like Regeneron demonstrate superior financial metrics such as higher operating margins (REGN TTM Operating Margin: 28.3% vs. ALNY TTM Operating Margin: -4.9%) and return on equity (REGN TTM ROE: 15.4% vs. ALNY TTM ROE: -11.5%), reflecting their scale and established blockbuster franchises, Alnylam's competitive edge lies in its specialized RNAi expertise and delivery technology. This allows Alnylam to potentially achieve better target specificity and more potent gene silencing in specific disease areas compared to some alternative RNA-targeting approaches or traditional therapies. For example, AMVUTTRA's demonstrated mortality benefit in ATTR-CM differentiates it from existing stabilizers. However, Alnylam's R&D intensity remains high (ALNY TTM R&D as % Revenue: 50.2% vs. IONS TTM R&D as % Revenue: 67.3%, REGN TTM R&D as % Revenue: 19.9%), impacting near-term profitability compared to larger, more diversified players. The company strategically leverages partnerships (Roche (RHHBY), Regeneron, Sanofi, Novartis) to access resources, capabilities, and funding, which helps mitigate some of the financial strain and broadens its reach, countering the scale advantage of larger competitors.

Performance Reflecting Strategic Momentum

Alnylam's recent financial performance underscores the growing strength of its commercial portfolio and the increasing impact of its RNAi therapies. In the first quarter of 2025, the company reported total revenues of $594.2 million, a 20% increase compared to $494.3 million in the same period of 2024. This growth was primarily fueled by a significant increase in net product revenues, which rose 28% year-over-year to $468.5 million from $365.2 million.

The TTR franchise, comprising AMVUTTRA and ONPATTRO, remains the core revenue driver, generating $359.5 million in Q1 2025, a robust 36% increase from $264.5 million in Q1 2024. This growth was largely propelled by AMVUTTRA, which saw its revenue surge by 59% to $310.0 million, driven by strong patient uptake in the hereditary polyneuropathy (PN) indication. This performance is particularly notable given the entry of new competition in the hATTR PN market, demonstrating AMVUTTRA's strong brand value proposition and the effectiveness of Alnylam's commercial execution, capturing approximately 70% of new patient starts in the U.S. hATTR PN market in Q1 2025. The increase in AMVUTTRA sales was partially offset by a 29% decrease in ONPATTRO revenue to $49.5 million, primarily due to patient switches to AMVUTTRA.

The Rare franchise, including GIVLAARI and OXLUMO, also contributed to growth, with combined revenues increasing 8% year-over-year to $109.1 million. GIVLAARI revenue grew 15% to $67.0 million due to an increased number of patients, while OXLUMO revenue saw a slight decrease of 1% to $42.1 million, impacted by gross adjustments in European markets and timing of partner orders, despite a roughly 20% increase in patients on therapy.

Collaboration and royalty revenues, while more variable, also play a role. Net revenues from collaborations decreased 16% to $99.2 million in Q1 2025, primarily due to a large $65 million milestone recognized from Roche in Q1 2024 that did not recur, partially offset by a $30 million payment from Vir (VIR) and increased reimbursements from Regeneron in Q1 2025. Royalty revenue, primarily from Novartis's sales of Leqvio, more than doubled to $26.5 million, reflecting increased volume and royalty rates.

From a profitability standpoint, Alnylam achieved a significant milestone, reporting non-GAAP operating income of $75 million in Q1 2025, a substantial improvement from a non-GAAP operating loss of $2 million in Q1 2024. This was driven by the strong top-line growth outpacing the growth in operating expenses.

Total operating costs and expenses increased 7% to $576.1 million. Cost of goods sold increased 29% to $70.2 million, maintaining a consistent percentage of net product revenues (15%), though this is expected to increase as AMVUTTRA sales reach higher royalty tiers. R&D expenses saw a modest 2% increase to $265.1 million, reflecting increased investment in late-stage programs like zilebesiran and nucresiran, partially offset by the wind-down of the HELIOS-B trial. SG&A expenses rose 14% to $239.9 million, driven by increased marketing for TTR therapies and launch preparations for ATTR-CM. Other expense, net, increased significantly to $59.7 million, largely due to changes in the fair value of the development derivative liability tied to the AMVUTTRA ATTR-CM approval.

Liquidity remains solid, with cash, cash equivalents, and marketable securities totaling $2.63 billion as of March 31, 2025. While net cash used in operating activities increased in Q1 2025 ($118.3 million vs. $81.5 million in Q1 2024) due to higher bonus payouts and interest payments, this was partially offset by stronger product sales cash receipts. Management believes current liquidity is sufficient to fund operations for at least the next 12 months and bridge the company to a self-sustainable financial profile.

Outlook and the Promise of ATTR-CM Leadership

The investment narrative for Alnylam in 2025 and beyond is heavily centered on the transformative potential of the ATTR-CM market expansion and the continued maturation of its pipeline. Management has reiterated its full-year 2025 guidance, signaling confidence in achieving significant growth and profitability milestones.

The company projects combined net product sales for its four commercial products to be between $2.05 billion and $2.25 billion, representing a substantial 31% growth at the midpoint compared to 2024. The TTR franchise is expected to be the primary growth engine, with projected sales of $1.6 billion to $1.725 billion, a 36% increase at the midpoint. This guidance explicitly assumes the U.S. approval and launch of AMVUTTRA for ATTR-CM by the PDUFA date in March 2025, as well as subsequent launches in Germany and Japan in the second half of the year. Management anticipates the revenue contribution from the ATTR-CM launch to be a "second half story" in 2025, reflecting the time needed to secure broad patient access through formulary approvals in key health systems, despite encouraging early progress on this front. The Rare franchise is expected to contribute $450 million to $525 million, representing 15% growth.

Collaboration and royalty revenue is guided at $650 million to $750 million, a 16% increase, driven by anticipated higher revenues from the Roche collaboration (including an assumed $300 million milestone for zilebesiran Phase 3 initiation in H2 2025) and continued growth in Leqvio and Qfitlia royalties.

Total non-GAAP R&D and SG&A expenses are projected to be between $2.1 billion and $2.2 billion, a 17% increase at the midpoint, reflecting increased investment in late-stage clinical programs (zilebesiran, nucresiran Phase 3 initiations) and commercial launch activities for ATTR-CM. Despite this increased spending, Alnylam anticipates achieving sustainable non-GAAP operating income profitability in 2025, a key strategic goal.

Beyond 2025, the pipeline offers multiple potential growth drivers leveraging the company's RNAi platform and expanding tissue delivery capabilities. Zilebesiran, in collaboration with Roche, is advancing in Phase 2 (KARDIA-3 results expected H2 2025) towards a Phase 3 cardiovascular outcomes trial expected to start in H2 2025, targeting the large hypertension market. Nucresiran, the next-generation TTR silencer with potential for less frequent dosing, is slated to begin Phase 3 trials in ATTR-CM (TRITON-CM, H1 2025) and hATTR PN (TRITON-PN, late 2025), aiming to build a durable TTR franchise beyond AMVUTTRA. Mivelsiran, targeting APP for Alzheimer's disease and cerebral amyloid angiopathy, is progressing with a Phase 2 AD study expected to start in H2 2025 and an ongoing Phase 2 CAA study, representing a significant opportunity in CNS diseases. The company's goal to double its clinical pipeline to 15 INDs by the end of 2025, expanding into new tissues like muscle and adipose, underscores its commitment to sustainable innovation and future growth.

Risks and Challenges on the Horizon

Despite the promising outlook, Alnylam faces significant risks inherent in the biopharmaceutical industry. The success of its strategy hinges on the successful execution of clinical trials, obtaining regulatory approvals for new indications and pipeline candidates, and achieving commercial success in competitive markets.

Competition is intense across all therapeutic areas. In ATTR amyloidosis, AMVUTTRA competes with existing therapies like Pfizer's VYNDAQEL/VYNDAMAX and BridgeBio's (BBIO) ATTRUBY (oral stabilizers), as well as other RNA-targeting therapies like Ionis/AstraZeneca's (AZN) WAINUA. The market dynamics, including physician and patient preferences for administration route (oral vs. subcutaneous/HCP administered), pricing, reimbursement, and the potential for combination therapies or switches, will heavily influence market share. While AMVUTTRA's mortality data and quarterly HCP-administered dosing are key differentiators, the competitive response, including pricing strategies and clinical data from rivals, poses a material risk to market penetration and revenue forecasts.

Regulatory risks persist. While AMVUTTRA received U.S. approval for ATTR-CM, securing approvals in other key markets like Europe and Japan is not guaranteed and may involve delays or label restrictions. Future pipeline candidates must navigate complex and uncertain regulatory pathways. Unexpected safety findings in ongoing or future trials could lead to clinical holds (as seen with mivelsiran's partial hold), trial delays, or failure to obtain approval.

Dependence on third-party manufacturers and collaborators introduces operational and financial risks. Manufacturing complex RNAi therapeutics requires specialized expertise, and reliance on a limited number of CMOs could lead to supply disruptions. Collaborations, while providing funding and capabilities, also mean Alnylam has limited control over development and commercialization activities for partnered programs, and disputes or termination of agreements could adversely impact revenues and pipeline progress.

Intellectual property litigation is an ongoing risk, particularly concerning foundational RNAi technology and patents covering marketed products. Lawsuits against major players like Pfizer and Moderna (MRNA), while potentially lucrative if successful, are costly, time-consuming, and uncertain. Challenges to patent validity or claims of infringement by third parties could impact exclusivity and market position.

Furthermore, the evolving healthcare policy landscape, including potential impacts from the Inflation Reduction Act (IRA), state-level pricing regulations, and payor policies (e.g., step edits, co-pay accumulators), could exert downward pressure on pricing and reimbursement, affecting profitability. Global political and economic factors, including potential tariffs or changes in trade policy (like the BIOSECURE Act), could also impact supply chains and costs.

Conclusion

Alnylam Pharmaceuticals is executing a bold strategy to become a top-tier biotech, leveraging its differentiated RNAi platform and expanding commercial footprint. The recent U.S. approval of AMVUTTRA for ATTR-CM is a landmark achievement that significantly broadens the market opportunity for its flagship franchise and is expected to accelerate revenue growth, building on the strong performance seen in Q1 2025. Supported by a deep pipeline targeting multi-billion dollar opportunities and a clear path to sustainable non-GAAP operating profitability in 2025, Alnylam appears well-positioned for its next phase of growth. While navigating intense competition, regulatory complexities, and operational risks, the company's technological leadership and established commercial capabilities provide a strong foundation. Investors will be closely watching the ATTR-CM launch trajectory, progress in late-stage pipeline programs like zilebesiran and nucresiran, and the continued expansion of the RNAi platform into new tissues as key indicators of Alnylam's ability to deliver on its strategic vision and create long-term value.