Why Is Alnylam (ALNY) Down 6.8% Since Last Earnings Report?

It has been about a month since the last earnings report for Alnylam Pharmaceuticals (ALNY). Shares have lost about 6.8% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Alnylam due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Alnylam's Q1 Earnings & Sales Beat Estimates

Alnylam incurred a loss of $1.62 per share in the first quarter of 2020, narrower than the Zacks Consensus Estimate of a loss of $1.89 per share. The loss includes stock-based compensation expenses and unrealized gains on equity securities. Excluding these items, adjusted loss was $1.52 per share, wider than adjusted loss of $1.42 in the year-ago quarter.

The company recorded revenues of $99.5 million, which beat the Zacks Consensus Estimate of $91 million. In the year-ago quarter, revenues were $33.3 million. Net product revenues were $71.9 million, up 174% year over year driven by higher sales of Onpattro (patisiran) and U.S. commercial launch of Givlaari (givosiran). Net revenues from collaborators were $27.5 million due to revenues recognized under collaborations with Regeneron Pharmaceuticals and Vir Biotechnology.

Quarter in Detail

Onpattro recorded sales of $66.7 million in the first quarter, up 153.6% year over year driven by patient growth and expansion in new markets. Onpattro revenues rose 20% sequentially as slower growth in the U.S. market was offset by strong growth in international markets.

Givlaari recorded sales of $5.2 million in the first quarter of 2020, its first full quarter post launch. Alnylam said it is witnessing early impressive demand for Givlaari in the United States and expects contribution from international markets in the second quarter as it will launch the product in Germany.

Adjusted operating costs increased 40% year over year to $261.7 million as a result of increased investment to advance its late-stage pipeline and support ongoing launches of Onpattro and Givlaari.

2020 Guidance

Alnylam lowered its product revenue expectations for Onpattro by 5% from $285-$315 million to $270-$300 million due to the potential impact of the coronavirus pandemic. Alnylam expects the most significant impact of the pandemic in the second quarter. It expects sales of Onpattro to decline about 10% sequentially in the second quarter as patient adherence to the regimen will decrease with patients skipping or delaying doses amid coronavirus-related lockdown. However, Alnylam expects improvement in growth in the second half of the year. Net revenues from collaborations are expected in the range of $100 million-$150 million (maintained).

The company also lowered its operating cost guidance for the year. The company expects adjusted operating costs to be in the range of $1 billion-$1.08 billion versus the prior expectation of $1.03 billion-$1.13 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month. The consensus estimate has shifted 44.76% due to these changes.

VGM Scores

At this time, Alnylam has a subpar Growth Score of D, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Alnylam has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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