Vutrisiran And AMVUTTRA Approvals Will Transform The TTR Franchise

Key Takeaways

• Vutrisiran's approval and AMVUTTRA's anticipated approval in ATTR cardiomyopathy are expected to drive significant revenue and profit growth for Alnylam.
  
• New product launches and partnerships with industry leaders position Alnylam for sustainable innovation and increased financial resilience.
  
• Intensifying competition and payer policy delays could pressure Alnylam's market position and revenue growth, while pricing dynamics and increased royalties could affect profitability.

Catalysts

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

• Vutrisiran's potential approval in ATTR cardiomyopathy is anticipated to establish it as a new standard of care, significantly expanding Alnylam's TTR franchise and expected to drive revenue growth with projected sales of $1.6 billion to $1.725 billion for TTR products in 2025.
  
• Nucresiran's advancement to a Phase III study offers a best-in-class profile with a potential annual or biannual dosing regimen, promising future growth in revenue and profit margins given the absence of royalties payable to Sanofi.
  
• Alnylam's robust R&D pipeline with multiple phase studies scheduled to start, such as for ZILEBESIRAN and ELEBSIRAN, positions the company for sustainable innovation and long-term revenue growth through new product launches.
  
• The anticipated approval of AMVUTTRA for ATTR cardiomyopathy is expected to accelerate growth in the second half of 2025, with disciplined execution anticipated to maintain strong profit margins and boost earnings.
  
• Collaboration and royalty revenues are projected to grow 16% in 2025, driven by partnerships with Roche and Regeneron as well as royalties from Novartis, contributing to overall revenue increase and financial resilience.

Alnylam Pharmaceuticals Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Alnylam Pharmaceuticals's revenue will grow by 28.6% annually over the next 3 years.
• Analysts assume that profit margins will increase from -12.4% today to 17.9% in 3 years time.
• Analysts expect earnings to reach $855.2 million (and earnings per share of $5.97) by about March 2028, up from $-278.2 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $3.4 billion in earnings, and the most bearish expecting $334 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 59.2x on those 2028 earnings, up from -113.7x today. This future PE is greater than the current PE for the US Biotechs industry at 19.6x.
• Analysts expect the number of shares outstanding to grow by 2.34% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.37%, as per the Simply Wall St company report.

Alnylam Pharmaceuticals Future Earnings Per Share Growth

Risks

• Intensifying competition, particularly from new entrants into the market, could put pressure on Alnylam's patient growth and market positioning, affecting future revenue growth.
  
• Delays in securing payer policies and formulary additions post-approval could impact the initial sales trajectory of AMVUTTRA, potentially constraining revenue growth in the near term.
  
• Pricing dynamics, particularly in expanding the AMVUTTRA indication to a larger cardiomyopathy population, could affect net pricing and margin sustainability if premium pricing becomes a challenge against competitors.
  
• The potential increase in royalty rates payable to Sanofi due to growing sales of AMVUTTRA could reduce net margins, affecting overall profitability.
  
• Significant reliance on successful regulatory approvals for pipeline expansions, such as vutrisiran for cardiomyopathy, represents an execution risk that could impact projected revenue growth if timelines are delayed or approvals are not granted.

Valuation

• The analysts have a consensus price target of $304.873 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 $195.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $4.8 billion, earnings will come to $855.2 million, and it would be trading on a PE ratio of 59.2x, assuming you use a discount rate of 6.4%.
• Given the current share price of $244.3, the analyst price target of $304.87 is 19.9% 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.