AMVUTTRA And RNAi Pipeline Will Expand ATTR Treatment Options

Key Takeaways

• Expansion in AMVUTTRA and ATTR-CM markets enhances revenue potential and market share, solidifying Alnylam's leadership and confidence in growth.
  
• Strategic focus on sustainable profitability and innovation in RNAi therapies targets significant growth opportunities and long-term revenue expansion.
  
• Regulatory challenges, competitive pressures, and increased costs threaten Alnylam's growth, profit margins, and market share, potentially impacting future revenue and earnings.

Catalysts

Alnylam Pharmaceuticals, Inc. discovers, develops, and commercializes therapeutics based on ribonucleic acid interference.

• Alnylam's expanded indication for AMVUTTRA in ATTR cardiomyopathy, with approvals in the U.S., Brazil, and an expected European approval, is driving confidence in increasing revenue as this launch progresses and more patients are treated with this new indication.
  
• The company's emphasis on sustainable non-GAAP profitability by 2025, coupled with the commercial success and anticipated growth in its TTR franchise, indicates a future increase in earnings and profitability.
  
• Alnylam has a robust and expanding pipeline, including exciting advancements like the RNAi therapeutic Nucresiran, which targets significant multibillion-dollar opportunities and represents potential for long-term revenue growth through innovation.
  
• The strong early performance and increasing demand for Alnylam's TTR franchise, alongside the newfound advantage in the expanding ATTR-CM market, suggest increasing revenues and market share as the company solidifies its leadership position.
  
• Initiatives to enhance patient access and formulary inclusion, as well as strategic value-based agreements with payers, are expected to maintain and grow Alnylam's net margins by improving patient uptake and reducing barriers to treatment initiation in key markets.

Alnylam Pharmaceuticals Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Alnylam Pharmaceuticals's revenue will grow by 30.7% annually over the next 3 years.
• Analysts assume that profit margins will increase from -11.5% today to 19.3% in 3 years time.
• Analysts expect earnings to reach $1.0 billion (and earnings per share of $7.32) by about May 2028, up from $-269.7 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $3.5 billion in earnings, and the most bearish expecting $104.4 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 54.0x on those 2028 earnings, up from -130.4x today. This future PE is greater than the current PE for the US Biotechs industry at 18.3x.
• Analysts expect the number of shares outstanding to grow by 3.08% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.25%, as per the Simply Wall St company report.

Alnylam Pharmaceuticals Future Earnings Per Share Growth

Risks

• The company faces potential uncertainties related to FDA personnel reorganization and evolving biotech industry initiatives, which could impact regulatory approvals and timelines, affecting future revenue projections.
  
• Changes in tariffs and possible new pharmaceutical tariffs, although currently not significant, could lead to increased costs and affect future profit margins, impacting net earnings unless costs are absorbed elsewhere.
  
• With 80% of the global addressable population for treatments remaining untreated, the reliance on continued market expansion and patient diagnosis increases pressure on achieving and maintaining growth targets, particularly impacting revenue goals.
  
• The entry of new competitors in the market and increasing competition could impact Alnylam's ability to maintain pricing power or market share, affecting revenue and profit margins over time.
  
• Elevating R&D expenses to increase pipeline progression and initiate new studies could strain resources if expected returns from these investments do not materialize as planned, potentially impacting future profitability and earnings.

Valuation

• The analysts have a consensus price target of $320.557 for Alnylam Pharmaceuticals based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $500.0, and the most bearish reporting a price target of just $212.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $5.2 billion, earnings will come to $1.0 billion, and it would be trading on a PE ratio of 54.0x, assuming you use a discount rate of 6.3%.
  
• Given the current share price of $269.81, the analyst price target of $320.56 is 15.8% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.