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Alnylam Pharmaceuticals Reports Third Quarter 2013 Financial Results

  Alnylam Pharmaceuticals Reports Third Quarter 2013 Financial Results

      – Reported Positive Clinical Data with ALN-TTRsc, a Subcutaneously
Administered RNAi Therapeutic Targeting Transthyretin (TTR) for the Treatment
    of TTR-Mediated Amyloidosis (ATTR), Demonstrating Human Translation of
                  GalNAc-siRNA Conjugate Delivery Platform –

 – Advanced Patisiran (ALN-TTR02), an RNAi Therapeutic Targeting TTR for the
                 Treatment of ATTR, Toward Phase III Trial –

– Filed Clinical Trial Application for ALN-AT3, a Subcutaneously Administered
RNAi Therapeutic Targeting Antithrombin (AT) for the Treatment of Hemophilia –

               – Advanced Additional “Alnylam 5x15” Programs –

– Maintained Strong Balance Sheet with $367 Million in Cash and Expects to End
                2013 with Greater than $320 Million in Cash –

Business Wire

CAMBRIDGE, Mass. -- November 6, 2013

Alnylam Pharmaceuticals, Inc. (Nasdaq: ALNY), a leading RNAi therapeutics
company, today reported its consolidated financial results for the third
quarter 2013, and company highlights.

“This was a quarter of remarkable progress at Alnylam. A key highlight was
achievement of positive data from our Phase I clinical trial with ALN-TTRsc in
development for the treatment of familial amyloidotic cardiomyopathy. In this
study, we demonstrated knockdown of serum TTR of up to 94% and showed that
ALN-TTRsc was generally safe and well tolerated, thereby confirming human
translation of our proprietary GalNAc-siRNA conjugate delivery platform. As
such, we believe these data are very important not only for our ALN-TTRsc
program, but for the entirety of our ‘Alnylam 5x15’ pipeline which employs
this now clinically validated delivery approach,” said John Maraganore, Ph.D.,
Chief Executive Officer of Alnylam. “In addition, we were very pleased to
complete enrollment in our Phase II trial with patisiran – the recommended
International Nonproprietary Name for ALN-TTR02 – in development for the
treatment of familial amyloidotic polyneuropathy. We have begun rolling over
eligible patients onto the open-label extension study, which will include a
number of clinical endpoint measurements with initial data expected to be
presented in 2014. We also remain on track to start a Phase III pivotal trial
for patisiran in polyneuropathy patients by the end of 2013. In aggregate, we
believe our recent advances highlight Alnylam’s unique opportunity for
shareholder value creation with a modular and reproducible approach for
development and, ultimately, commercialization of innovative medicines for
genetically defined diseases.”

“In addition to the progress we made with our patisiran and ALN-TTRsc
programs, we advanced multiple additional ‘Alnylam 5x15’ programs this
quarter. Notably, we presented key pre-clinical proof-of-concept data with
ALN-AT3, an RNAi therapeutic for the treatment of hemophilia, in which we
demonstrated that subcutaneous administration of ALN-AT3 can fully normalize
thrombin generation in a non-human primate hemophilia ‘inhibitor’ model. We
also recently filed a Clinical Trial Application for ALN-AT3 and we expect to
initiate a Phase I clinical trial in early 2014,” said Barry Greene, President
and Chief Operating Officer of Alnylam. “In addition, we selected
GalNAc-conjugate Development Candidates for two programs: ALN-AS1, an RNAi
therapeutic targeting aminolevulinate synthase-1 for the treatment of hepatic
porphyrias; and ALN-PCSsc, an RNAi therapeutic targeting PCSK9 in development
for the treatment of hypercholesterolemia. Further, we made progress on
additional ‘5x15’ programs including ALN-CC5, an RNAi therapeutic targeting
complement component C5 for the treatment of complement-mediated diseases, and
ALN-AAT, an RNAi therapeutic targeting alpha-1-antitrypsin (AAT) in
development for the treatment of liver disease associated with AAT deficiency.
All told, we’re very pleased with the progress we’re making in executing on
our ‘Alnylam 5x15’ product strategy, bringing our innovative medicines to
patients.”

Cash, Cash Equivalents and Total Marketable Securities

At September 30, 2013, Alnylam had cash, cash equivalents and total marketable
securities of $367.1 million, as compared to $226.2 million at December 31,
2012.

Net Loss

The net loss according to accounting principles generally accepted in the U.S.
(GAAP) for the third quarter of 2013 was $29.7 million, or $0.48 per share on
both a basic and diluted basis (including $8.8 million, or $0.14 per share of
non-cash stock-based compensation expense), as compared to a net loss of $19.5
million, or $0.38 per share on both a basic and diluted basis (including $3.4
million, or $0.07 per share of non-cash stock-based compensation expense), for
the same period in the previous year.

Revenues

Revenues were $9.0 million for the third quarter of 2013, as compared to $16.8
million for the same period last year. Revenues for the third quarter of 2013
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 $2.1 million for the company’s
alliance with The Medicines Company, research reagent licenses, and other
sources. For the fourth quarter of 2013, we expect net revenues from research
collaborators to remain consistent with the amount recorded for the third
quarter of 2013.

Research and Development Expenses

Research and development (R&D) expenses were $34.5 million in the third
quarter of 2013, which included $6.8 million of non-cash stock-based
compensation, as compared to $22.1 million in the third quarter of 2012, which
included $2.3 million of non-cash stock-based compensation. The increase in
R&D expenses in the third quarter of 2013 as compared to the prior year period
was due primarily to higher clinical development costs related to our
patisiran (ALN-TTR02), ALN-TTRsc and ALN-AT3 programs. In addition,
stock-based compensation expense increased during the three months ended
September 30, 2013 as compared to the three months ended September 30, 2012
due primarily to an increase in the Black-Scholes value of stock options
granted in the third quarter of 2013. Partially offsetting these increases
were license fees due to certain entities related to our drug delivery-related
and platform technologies that were expensed in 2012. For the fourth quarter
of 2013, we expect that research and development expenses will decrease
slightly due to a decrease in stock-based compensation expense expected in the
fourth quarter of 2013 as compared to the third quarter of 2013.

General and Administrative Expenses

General and administrative (G&A) expenses were $6.8 million in the third
quarter of 2013, which included $2.0 million of non-cash stock-based
compensation, as compared to $12.8 million in the third quarter of 2012, which
included $1.1 million of non-cash stock-based compensation. The decrease in
G&A expenses for the third quarter of 2013 as compared to the prior year
period was due primarily to a decrease in consulting and professional services
related to business activities, primarily legal activities related to
litigation that was resolved in November 2012. For the fourth quarter of 2013,
we expect that general and administrative expenses will remain consistent with
the third quarter of 2013.

Investment in Regulus Therapeutics

Equity in loss of joint venture was zero for the third quarter of 2013 and
$1.6 million for the third quarter of 2012. The prior year equity in loss of
joint venture 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 September 30,
2013, the fair market value of the company’s investment in Regulus was $58.0
million as compared to $38.7 million at December 31, 2012.

Interest Income

Interest income was $0.3 million for the third quarter of 2013 and 2012.

Benefit from Income Taxes

The company had a benefit from income taxes of $2.3 million for the third
quarter of 2013 as compared to zero in the third 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.

2013 Financial Guidance

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 solid balance sheet, ending this third
quarter with $367 million in cash,” said Michael Mason, Vice President,
Finance and Treasurer of Alnylam. “We remain on track to end 2013 with greater
than $320 million, which will continue to provide us with a strong balance
sheet to execute on our business plan and advance our RNAi therapeutics
through clinical trials and toward the market.”

Third Quarter 2013 and Recent Significant Corporate Highlights

Key “Alnylam 5x15” Program Highlights

  *Achieved Positive Phase I Results for ALN-TTRsc, a Subcutaneously
    Administered RNAi Therapeutic Targeting Transthyretin (TTR) for the
    Treatment of Familial Amyloidotic Cardiomyopathy (FAC) in Patients with
    TTR-Mediated Amyloidosis (ATTR). Interim results showed that ALN-TTRsc
    administration led to robust, consistent, and statistically significant
    (p<0.01) knockdown of serum TTR – the disease-causing protein in ATTR – of
    up to 94%. In addition, knockdown of TTR was found to be rapid,
    dose-dependent, and durable. Further, ALN-TTRsc was found to be generally
    safe and well tolerated in this study. These human study results are the
    first to be reported for Alnylam’s proprietary GalNAc-siRNA conjugate
    delivery platform, enabling subcutaneous dosing of RNAi therapeutics with
    a wide therapeutic index. These results also demonstrate human translation
    for Alnylam’s GalNAc-siRNA conjugate platform, which is being employed in
    the company’s programs in hemophilia, porphyria, complement-mediated
    diseases, hypercholesterolemia, beta-thalassemia, and alpha-1 antitrypsin
    (AAT) deficiency, amongst others. The company is on track to initiate a
    pilot Phase II FAC trial with ALN-TTRsc by the end of 2013, with results
    expected to be presented in 2014.
  *Completed Enrollment of Phase II Clinical Trial with Patisiran
    (ALN-TTR02), an RNAi Therapeutic Targeting TTR for the Treatment of
    Familial Amyloidotic Polyneuropathy (FAP) in Patients with ATTR. Recent
    interim results from this Phase II study showed that patisiran – the
    recommended International Nonproprietary Name (INN) for ALN-TTR02 –
    achieved up to 93% knockdown of TTR. Patisiran activity was found to be
    rapid, dose dependent, and durable, with similar levels of TTR knockdown
    observed toward both wild-type and mutant protein. In addition, patisiran
    was found to be generally safe and well tolerated in this study. Complete
    results from the Phase II study will be presented at the International
    Symposium on Familial Amyloidotic Polyneuropathy being held November 10 –
    13, 2013 in Rio de Janeiro, Brazil. Alnylam also announced the start of
    its open-label extension (OLE) study with patisiran. The OLE study will
    evaluate the long-term safety and tolerability of patisiran and will also
    measure effects of treatment toward a number of clinical endpoints,
    including a modified Neuropathy Impairment Score called “mNIS+7.” The
    company intends to report clinical data from this study about once per
    year, with initial data in 2014. In addition, the company remains on track
    to start a Phase III pivotal trial for patisiran in FAP patients by the
    end of 2013. The primary endpoint will be the difference in the change
    from baseline in the mNIS+7 score at 18 months between patients receiving
    patisiran as compared with those receiving placebo. Alnylam has obtained
    protocol assistance for the patisiran Phase III study from the Committee
    for Medicinal Products for Human Use (CHMP) of the European Medicines
    Agency (EMA) and has completed its End-of-Phase II meeting with the U.S.
    Food and Drug Administration (FDA).
  *Advanced ALN-AT3, a Subcutaneously Administered RNAi Therapeutic Targeting
    Antithrombin (AT) for the Treatment of Hemophilia and Rare Bleeding
    Disorders (RBD), Toward the Clinic. Alnylam filed a Clinical Trial
    Application (CTA) with the U.K. Medicines and Healthcare products
    Regulatory Agency (MHRA) to initiate a Phase I clinical trial with
    ALN-AT3. In addition, new pre-clinical data with ALN-AT3 were presented at
    the XXIV Congress of the International Society on Thrombosis and
    Haemostasis (ISTH) that was held June 29 – July 4, 2013 in Amsterdam.
    ALN-AT3 was shown to normalize thrombin generation and improve hemostasis
    in hemophilia mice and to fully correct thrombin generation in a non-human
    primate (NHP) hemophilia “inhibitor” model. In addition, the company
    presented results of tolerability studies that support a broad therapeutic
    index for ALN-AT3 in the hemophilia setting. Alnylam plans to initiate a
    Phase I clinical trial with ALN-AT3 in early 2014. In addition, ALN-AT3
    was recently granted Orphan Drug Designation as a therapeutic for the
    treatment of Hemophilia A and Hemophilia B by the FDA.
  *Advanced Development Candidate for ALN-AS1, a Subcutaneously Administered
    RNAi Therapeutic Targeting Aminolevulinate Synthase I (ALAS-1) for the
    Treatment of Hepatic Porphyrias. New pre-clinical research findings,
    presented at the 9^th Annual Meeting of the Oligonucleotide Therapeutics
    Society (OTS) held October 6 – 8, 2013 in Naples, Italy, showed that
    subcutaneous administration of a GalNAc-siRNA targeting ALAS-1 led to
    rapid, dose-dependent, and long-lasting knockdown of the ALAS-1 mRNA and
    complete inhibition of the toxic intermediates that mediate the symptoms
    and pathology of acute intermittent porphyria (AIP). Based on these
    findings, including results in non-human primate studies, the company has
    selected its ALN-AS1 Development Candidate and expects to file an
    Investigational New Drug (IND) or IND equivalent application for this RNAi
    therapeutic in 2014.
  *The Medicines Company and Alnylam Advanced a Development Candidate for
    ALN-PCSsc, a Subcutaneously Administered RNAi Therapeutic Targeting PCSK9
    for the Treatment of Hypercholesterolemia. New data from non-human primate
    studies, presented at the OTS meeting, showed that ALN-PCSsc
    administration results in up to 90% knockdown of PCSK9 and up to 68%
    lowering of LDL cholesterol (LDL-C) in the absence of statins.
    Pre-clinical durability data support the potential for every-two-week
    dosing and possibly every-four-week dosing. Alnylam anticipates submitting
    an IND or IND equivalent application for ALN-PCSsc in late 2014.
  *Published Clinical Trial Data in Leading Medical Journals.

       *Alnylam and collaborators published complete study results from Phase
         I trials with ALN-TTR01 and patisiran (ALN-TTR02) in the New England
         Journal of Medicine. The paper, titled “Safety and Efficacy of RNAi
         Therapy for Transthyretin Amyloidosis” (Coelho et al., N Engl J Med
         2013;369:819-29), shows that RNAi therapeutics targeting TTR achieved
         rapid, dose-dependent, durable, specific, and RNAi-mediated knockdown
         of TTR, the disease-causing protein in ATTR. These results document
         the most robust proof of concept for RNAi therapy in man to date,
         including knockdown of serum TTR protein levels of up to 94% after
         just a single dose of drug.
       *In addition, Alnylam and collaborators published complete study
         results from a Phase I trial with ALN-PCS in The Lancet. The paper,
         titled “Effect of an RNA interference drug on the synthesis of
         proprotein convertase subtilisin/kexin type 9 (PCSK9) and the
         concentration of serum LDL cholesterol in healthy volunteers: a
         randomised, single-blind, placebo-controlled, phase 1 trial,”
         (Fitzgerald, et al., The Lancet, doi:10.1016/S0140-6736(13)61914-5)
         reports the results of a study evaluating single intravenous dose
         administration of ALN-PCS, in the absence of concomitant
         lipid-lowering agents such as statins. Specifically, ALN-PCS
         administration resulted in rapid, dose-dependent knockdown of plasma
         PCSK9 of up to 84% relative to baseline and placebo, with a
         corresponding reduction in serum levels of LDL-C – a clinically
         validated endpoint – of up to 57% relative to baseline and placebo.
         The knockdown of PCSK9 and lowering of LDL-C were also found to be
         durable, with effects lasting for weeks after a single dose. This
         paper documents the first human proof of concept for an RNAi
         therapeutic impacting a clinically validated endpoint.

  *Advanced Additional “Alnylam 5x15” Programs. Alnylam continued to advance
    additional programs as part of its “Alnylam 5x15” product strategy,
    including ALN-CC5, an RNAi therapeutic targeting complement component C5
    for the treatment of complement-mediated diseases; ALN-AAT, an RNAi
    therapeutic targeting alpha-1 antitrypsin (AAT) for the treatment of liver
    disease associated with AAT deficiency; and ALN-TMP, an RNAi therapeutic
    targeting TMPRSS6 for the treatment of beta-thalassemia and iron-overload
    disorders. At the 64^th Annual Meeting of the American Association for the
    Study of Liver Diseases (AASLD, “The Liver Meeting”) held November 1 – 5,
    2013 in Washington, D.C., Alnylam scientists presented new pre-clinical
    data with ALN-AAT. The new results showed that subcutaneous administration
    of a GalNAc-siRNA targeting AAT led to rapid, dose-dependent, and durable
    knockdown of AAT of over 90%, as well as a significant reduction in
    fibrosis and tumor incidence in a transgenic mouse model of mutant AAT
    (“Z-AAT”) protein overexpression.

Business and Organizational Highlights

  *Earned Milestone Payment from Monsanto. Alnylam announced today that it
    has earned a milestone payment under the Monsanto Agreement based upon the
    completion of technology transfer activities.
  *Expanded Organization, Including Key Appointments to Management Team and
    Scientific Advisory Board.

       *Alnylam appointed Michael Placke, Ph.D., DABT, to the position of
         Senior Vice President, Drug Safety and Metabolism. Before joining
         Alnylam, Dr. Placke was President and CEO of Ricerca Biosciences, a
         privately held contract research company, providing integrated
         non-clinical drug development services to biotechnology and
         pharmaceutical companies. Prior to Ricerca, Dr. Placke was Vice
         President of Drug Safety at Wyeth Pharmaceuticals (and at Pfizer
         after it acquired Wyeth), where he had both operational and portfolio
         responsibilities for non-clinical drug safety. Before joining Wyeth
         he was Vice President of Research and Development of a start-up firm
         developing novel respiratory drug therapies. Dr. Placke has
         scientific and executive-level operational experience in developing a
         wide array of drug product modalities including small molecules,
         biologics, vaccines, and specialty drug products.
       *Alnylam also appointed Benny Sorensen, M.D., Ph.D., to the position
         of Medical Director of Clinical Research. Dr. Sorensen has joined
         Alnylam with more than 15 years of experience in clinical and
         academic hemophilia and hemostasis research and management. Before
         joining Alnylam, Dr. Sorensen was a Global Medical Director at Baxter
         Healthcare Corporation, where he was responsible for developing
         clinical, regulatory, commercial, and business development strategies
         for hemophilia products and services. Prior to Baxter he was the
         Director of the Haemostasis Research Unit and Honorary Lecturer at
         Guy’s and St. Thomas’ Hospital & King’s College London School of
         Medicine, where he led the advancement of several clinical trials
         across Phases I, II, and III. Dr. Sorensen has published extensively
         on the topics of hemophilia and hemostasis management.
       *In addition, Alnylam elected Katherine High, M.D., to its Scientific
         Advisory Board. Dr. High is an Investigator at the Howard Hughes
         Medical Institute, the William H. Bennett Professor of Pediatrics at
         the Perelman School of Medicine at the University of Pennsylvania,
         and the Director of the Center for Cellular and Molecular
         Therapeutics at The Children’s Hospital of Philadelphia.

Conference Call Information

Management will provide an update on the company, discuss third quarter 2013
results, and discuss expectations for the future via conference call on
Wednesday, November 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,
www.alnylam.com, 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 94456622. A replay of the
call will be available beginning at 7:30 p.m. ET on Wednesday, November 6,
2013. To access the replay, please dial 855-859-2056 (domestic) or
404-537-3406 (international), and refer to conference ID 94456622.

About RNA Interference (RNAi)

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.

About Alnylam Pharmaceuticals

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
toward genetically defined targets for the treatment of serious,
life-threatening diseases with limited treatment options for patients and
their caregivers. These include: patisiran (ALN-TTR02), an intravenously
delivered RNAi therapeutic targeting transthyretin (TTR) for the treatment of
TTR-mediated amyloidosis (ATTR) in patients with familial amyloidotic
polyneuropathy (FAP); ALN-TTRsc, a subcutaneously delivered RNAi therapeutic
targeting TTR for the treatment of ATTR in patients with familial amyloidotic
cardiomyopathy (FAC); ALN-AT3, an RNAi therapeutic targeting antithrombin (AT)
for the treatment of hemophilia and rare bleeding disorders (RBD); ALN-AS1, an
RNAi therapeutic targeting aminolevulinate synthase-1 (ALAS-1) for the
treatment of porphyria including acute intermittent porphyria (AIP); ALN-CC5,
an RNAi therapeutic targeting complement component C5 for the treatment of
complement-mediated diseases; ALN-PCS, an RNAi therapeutic targeting PCSK9 for
the treatment of hypercholesterolemia; ALN-TMP, an RNAi therapeutic targeting
TMPRSS6 for the treatment of beta-thalassemia and iron-overload disorders;
and, ALN-AAT, an RNAi therapeutic targeting alpha-1-antitrypsin (AAT) for the
treatment of AAT deficiency liver disease, amongst other programs. As part of
its “Alnylam 5x15^TM” 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 Nature, Nature Medicine, Nature
Biotechnology, Cell, the New England Journal of Medicine, and The Lancet.
Founded in 2002, Alnylam maintains headquarters in Cambridge, Massachusetts.
For more information, please visit www.alnylam.com.

About “Alnylam 5x15™”

The “Alnylam 5x15” strategy, launched in January 2011, establishes a path for
development and commercialization of novel RNAi therapeutics toward
genetically defined targets for the treatment of 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: patisiran (ALN-TTR02), an intravenously
delivered RNAi therapeutic targeting transthyretin (TTR) in development for
the treatment of TTR-mediated amyloidosis (ATTR) in patients with familial
amyloidotic polyneuropathy (FAP); ALN-TTRsc, a subcutaneously delivered RNAi
therapeutic targeting TTR in development for the treatment of ATTR in patients
with familial amyloidotic cardiomyopathy (FAC); ALN-AT3, an RNAi therapeutic
targeting antithrombin (AT) in development for the treatment of hemophilia and
rare bleeding disorders (RBD); ALN-AS1, an RNAi therapeutic targeting
aminolevulinate synthase-1 (ALAS-1) in development for the treatment of
porphyria including acute intermittent porphyria (AIP); ALN-CC5, an RNAi
therapeutic targeting complement component C5 in development for the treatment
of complement-mediated diseases; ALN-PCS, an RNAi therapeutic targeting PCSK9
in development for the treatment of hypercholesterolemia; ALN-TMP, an RNAi
therapeutic targeting TMPRSS6 in development for the treatment of
beta-thalassemia and iron-overload disorders; and, ALN-AAT, an RNAi
therapeutic targeting alpha-1-antitrypsin (AAT) in development for the
treatment of AAT deficiency liver disease, amongst 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.

Alnylam Forward-Looking Statements

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 patisiran (ALN-TTR02) and
ALN-TTRsc, ALN-AT3, ALN-AS1, ALN-PCSsc, ALN-CC5, ALN-AAT, and ALN-TMP, its
expectations with respect to the timing, execution, 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-AS1 and ALN-PCSsc, its expectations regarding
reporting of data from its clinical studies, including its patisiran and
ALN-TTRsc studies, its plans to seek a partner for certain ‘Alnylam 5x15’
programs, its plans regarding commercialization of RNAi therapeutics, 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 most recent
quarterly report on Form 10-Q filed with the Securities and Exchange
Commission (SEC) 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.


Alnylam Pharmaceuticals, Inc.
Unaudited Condensed Consolidated Statements of Comprehensive Loss
(In thousands, except per share amounts)
                                                               
                             Three Months Ended        Nine Months Ended
                             Sept 30,                  Sept 30,
                              2013        2012        2013        2012
                                                                    
                                                                    
Net revenues from research   $ 8,991      $ 16,759     $ 36,320     $ 58,230
collaborators
                                                                    
Operating expenses:
Research and development       34,457       22,094       80,851       64,891
^(1)
General and administrative    6,768       12,812      18,819      34,446
^(1)
Total operating expenses      41,225      34,906      99,670      99,337
Loss from operations          (32,234)    (18,147)    (63,350)    (41,107)
Other income (expense):
Equity in loss of joint
venture (Regulus               -            (1,613)      -            (3,641)
Therapeutics Inc.)
Interest income                290          261          784          755
Other (expense) income        (12)        (3)         (18)        167
Total other income            278         (1,355)     766         (2,719)
(expense)
Loss before income taxes       (31,956)     (19,502)     (62,584)     (43,826)
Benefit from income taxes     2,270       -           5,716       -
Net loss                     $ (29,686)   $ (19,502)   $ (56,868)   $ (43,826)
Net loss per common share    $ (0.48)     $ (0.38)     $ (0.93)     $ (0.88)
- basic and diluted
Weighted average common
shares used to compute        62,416      51,542      61,103      49,772
basic and diluted net loss
per common share
                                                                    
Comprehensive loss:
Net loss                     $ (29,686)   $ (19,502)   $ (56,868)   $ (43,826)
Unrealized (loss) gain on
marketable securities, net    (962)       170         11,506      273
of tax
Comprehensive loss           $ (30,648)   $ (19,332)   $ (45,362)   $ (43,553)
                                                                    
(1) Non-cash stock-based
compensation expenses
included in operating
expenses are as follows:
Research and development     $ 6,805      $ 2,271      $ 11,092     $ 6,357
General and administrative     2,040        1,115        4,205        3,281
                                                                      


Alnylam Pharmaceuticals, Inc.
Unaudited Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
                                                              
                                                 September 30,  December 31,
                                                   2013          2012
Cash, cash equivalents and total marketable       $   367,145     $   226,228
securities
Billed and unbilled collaboration receivables         609             104
Prepaid expenses and other current assets             4,776           2,641
Property and equipment, net                           16,974          19,799
Investment in equity securities of Regulus          57,999        38,748
Therapeutics Inc.
Total assets                                     $   447,503    $   287,520
Accounts payable and accrued expenses                 20,137          15,978
Total deferred revenue                                125,337         132,291
Total deferred rent                                   4,447           5,198
Total stockholders’ equity (63.2 million and
52.5 million common shares issued and               297,582       134,053
outstanding at September 30, 2013 and December
31, 2012, respectively)
Total liabilities and stockholders' equity       $   447,503    $   287,520
                                                                  

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.

Contact:

Alnylam Pharmaceuticals, Inc.
Cynthia Clayton, 617-551-8207
Vice President, Investor Relations and
Corporate Communications
or
Michael Mason, 617-551-8327
Vice President, Finance and Treasurer
 
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