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    ALNY
    Earnings call· Dec 2024(Q4 FY24)

    ALNYLAM PHARMACEUTICALS, INC. ALNY

    Feb 13, 2025 Source

    Executive summary

    Alnylam Q4 FY24 — Strong Commercial Growth and Profitability Milestone Achieved

    Alnylam delivered robust commercial and financial performance in Q4 FY24, achieving its first full year of non-GAAP operating profitability. The company is poised for a landmark 2025, driven by the anticipated approval and launch of AMVUTTRA for ATTR cardiomyopathy, which is expected to accelerate TTR franchise growth. Strategic investments in a deep R&D pipeline, including next-generation TTR assets and new Phase I programs, underpin long-term value creation, despite expected near-term gross margin compression.

    Highlights

    5

    • Combined net product revenues reached $1.646 billion for FY24, at the upper end of guidance, representing 33% growth year-over-year.

    • TTR franchise achieved $343 million in global net product revenues in Q4, a 35% increase compared to Q4 2023, and 34% growth for the full year.

    • Non-GAAP operating income for FY24 was $95 million, a significant milestone and $156 million improvement compared to 2023.

    • Cash, cash equivalents, and marketable securities increased to $2.7 billion at year-end 2024 from $2.4 billion at year-end 2023.

    • Nucresiran received Orphan Drug Designation for ATTR amyloidosis and is expected to start a Phase III study in ATTR cardiomyopathy in H1 2025.

    Concerns

    3

    • GIVLAARI Q4 product sales decreased by 9% compared to Q3 2024 due to timing of large orders in the partner market.

    • Gross margin on product sales is expected to decrease in 2025 due to AMVUTTRA's lower margin profile and increasing royalty rates.

    • Payer policies and formulary uptake for AMVUTTRA in ATTR-CM are expected to take several months post-approval, impacting initial launch trajectory.

    Guidance & targets

    7
    CategoryTargetConfidence
    Combined Net Product Sales
    $2.05 billion to $2.25 billion
    high materiality
    High
    Total TTR Product Sales
    $1.6 billion to $1.725 billion
    high materiality
    High
    Total Rare Product Sales
    $450 million to $525 million
    medium materiality
    High
    Constant Exchange Rate Growth for Net Product Revenues
    26% to 39%
    medium materiality
    High
    Collaboration and Royalty Revenue
    $650 million to $750 million
    medium materiality
    High
    Combined Non-GAAP R&D and SG&A Expenses
    $2.1 billion to $2.2 billion
    medium materiality
    High
    Non-GAAP Operating Income
    profitability
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    TTR Franchise (ONPATTRO and AMVUTTRA)
    Strong performance driven by continued increase in patients on therapy and robust AMVUTTRA uptake. U.S. growth was supported by a 34% increase in demand, partially offset by inventory dynamics. International growth also driven by AMVUTTRA patient uptake.
    Full-year 2024 global net product revenues: $1.319 billionFull-year 2024 growth: 34%Q4 2024 U.S. combined sales (ONPATTRO and AMVUTTRA): 10% increase vs Q3 2024Full-year 2024 U.S. combined sales (ONPATTRO and AMVUTTRA): 42% increase vs 2023Full-year 2024 U.S. revenue: $705 millionFull-year 2024 U.S. dollar growth: $200 millionQ4 2024 International growth: 12% vs Q3 2024Q4 2024 International growth: 25% vs Q4 2023
    		$343 million35%——
    Rare Franchise (GIVLAARI and OXLUMO)
    Overall decline QoQ driven by purchase patterns. GIVLAARI decline due to timing of large partner market orders in Q3. OXLUMO showed strong demand growth, particularly in the U.S., despite emerging competition.
    Full-year 2024 global net product revenues: $327 millionFull-year 2024 growth: 29%GIVLAARI Q4 2024 product sales: -9% vs Q3 2024GIVLAARI Q4 2024 product sales: 9% vs Q4 2023GIVLAARI Q4 2024 U.S. growth: 14% vs Q4 2023GIVLAARI Q4 2024 International growth: 1% vs Q4 2023OXLUMO Q4 2024 product sales: 8% vs Q3 2024OXLUMO Q4 2024 product sales: 33% vs Q4 2023OXLUMO Q4 2024 U.S. growth: 77% vs Q4 2023OXLUMO Q4 2024 Rest of World growth: 12% vs Q4 2023
    		$108 million18%-3%—

    Operational metrics

    8
    Non-GAAP Operating Income
    $95 million$156 million improvement vs 2023
    FY24

    Represents a significant milestone for the company, achieving profitability as a key goal of the P5x25 growth strategy.

    Cash, Cash Equivalents and Marketable Securities
    $2.7 billionUp from $2.4 billion at end of 2023
    End of FY24

    Increase primarily driven by improved operating performance and net proceeds from common stock issuance related to employee stock option exercises.

    Gross Margin on Product Sales
    81%3% increase vs 2023
    FY24

    Expected to decrease in 2025 due to AMVUTTRA's lower margin and increasing royalty tiers.

    Gross Margin on Total Revenue
    86%
    FY24

    Includes the impact of collaboration and royalty revenue, which is very high margin (close to 100%).

    Royalty Rate Payable on AMVUTTRA
    21%
    Average across 2024

    Expected to increase to mid- to high 20s over time as the business grows and moves into higher royalty tiers.

    U.S. hATTR-PN Dollar Growth
    $200 millionIncreased vs $180 million in 2023
    FY24

    Reflects leadership position and strength of AMVUTTRA despite new competition.

    Alternative Sites of Care for ATTR-CM
    Over 1,000
    Current

    Goal is to expand these sites for greater than 90% of patients to be within 10 miles of a treatment site.

    Co-pay for Patients
    70%
    Current

    70% of patients currently pay $0 co-pay, expected to remain the same and drive patient uptake.

    Industry KPIs

    3
    MetricValueDetails
    Regulatory approvals filingsPDUFA target action date for vutrisiran sNDA
    Clinical trial efficacy safety data36% reduction in all-cause mortality%
    Collaboration milestone royalty revenue$92 millionUSD

    Deals & partnerships

    3
    NovartisSales milestone for Leqvio$60 million

    Milestone payment received from Novartis for Leqvio sales.

    RocheCollaboration for ZILEBESIRAN

    Collaboration revenue from Roche is expected to be a major driver of collaboration and royalty revenue in 2025.

    RegeneronCollaboration for ZILEBESIRAN

    Modification provided Regeneron an exclusive license to develop, manufacture, and commercialize ZILEBESIRAN as a monotherapy. Collaboration revenue from Regeneron is expected to be a major driver of collaboration and royalty revenue in 2025.

    Risks & headwinds

    2
    Payer policy and formulary uptake for AMVUTTRA in ATTR-CMPost-approval in 2025

    Several months for product to be added to system's formulary and access pathway to be fully optimized.

    Mitigation: Optimizing access pathways at health systems, building broad ecosystem of alternative sites of care, scaling up customer teams, expanding value-based agreements.

    Decreased gross margin on product salesFY25 and beyond

    Expected decrease in 2025; average royalty rate payable on AMVUTTRA expected to increase from 21% to mid- to high 20s.

    Mitigation: Focus on high-margin collaboration and royalty revenue; potential future launch of Nucresiran which has no royalty burden to Sanofi.

    What to watch in Q1 FY25

    5

    AMVUTTRA ATTR-CM Regulatory Approval

    March 23, 2025
    CurrentUnder FDA review
    TargetApproval decision

    Why it matters

    Approval is critical for expanding the TTR franchise and achieving 2025 revenue guidance, setting up long-term growth.

    The PDUFA target action date for the sNDA for vutrisiran is March 23, 2025.

    Q&A highlights

    6

    How long will it take to establish payer policies for AMVUTTRA in ATTR-CM post-approval, and how will this impact the initial launch trajectory?

    Payer policies and formulary uptake will take several months, making the launch a 'second half story' for meaningful uptake. The company is committed to its growth guidance and expects existing value-based agreements to extend to the new indication.

    “But the formulary piece takes a little bit time. So I would expect the uptake really to be meaningful in the second half of the year.”

    asked by Tazeen Ahmad · answered by Tolga Tanguler

    2 min read5 chapters

    Detailed Narrative

    01

    ATTR Cardiomyopathy Launch Readiness

    Alnylam is actively preparing for the potential launch of AMVUTTRA in ATTR cardiomyopathy, with a PDUFA date of March 23, 2025. The company is optimizing access pathways within health systems, where 80% of the patient population is treated, and expanding alternative sites of care to achieve over 90% patient access within 10 miles of a treatment site. Field teams have been scaled up, and efforts are focused on securing formulary approvals and expanding existing value-based agreements to cover the expanded label. Management expects a ramp-up in demand in the second half of 2025 due to the time required for formulary additions.

    02

    TTR Franchise Performance and Market Dynamics

    The TTR franchise demonstrated strong growth in 2024, with U.S. hATTR-PN sales increasing 42% year-over-year, driven by AMVUTTRA patient uptake and switches from ONPATTRO, despite new competition. Management believes AMVUTTRA's profile, including rapid TTR knockdown, demonstrated CV outcomes in HELIOS-B (36% reduction in all-cause mortality), and convenient quarterly subcutaneous dosing, positions it as a disruptive treatment option. The company anticipates continued market growth, with AMVUTTRA potentially becoming a first-line standard of care for both naive and stabilizer-treated patients.

    03

    Pipeline Advancement and Innovation

    Alnylam continues to advance a robust pipeline. Nucresiran, a next-generation TTR asset, showed robust and durable TTR knockdown (>90% at 6 months) in Phase I, supporting annual or biannual dosing, and received Orphan Drug Designation. A Phase III study for Nucresiran in ATTR cardiomyopathy is expected to start in H1 2025. ZILEBESIRAN, for hypertension, completed enrollment in the CARDIO 3 Phase II study, with a Phase III cardiovascular outcomes trial expected to start in H2 2025. ELEBSIRAN, for cerebral amyloid angiopathy and Alzheimer's, is progressing, and four new Phase I programs were initiated in 2024.

    04

    Financial Performance and Profitability

    Alnylam achieved its first full year of non-GAAP operating income profitability in 2024, reaching $95 million, a $156 million improvement year-over-year. This milestone is attributed to strong product sales growth and disciplined capital allocation. The company ended the year with $2.7 billion in cash, cash equivalents, and marketable securities. For 2025, Alnylam projects continued non-GAAP operating income profitability, with growth in R&D and SG&A expenses supporting pipeline advancement and the AMVUTTRA CM launch.

    05

    Gross Margin and Royalty Dynamics

    Gross margin on product sales for FY24 was 81%, an increase of 3% compared to 2023, primarily due to nonrecurring prior year expenses. However, for 2025, gross margin is expected to decrease. This is driven by AMVUTTRA being the lowest margin product due to royalty burden to Sanofi (average 21% in 2024, expected to increase to mid-to-high 20s over time⏳ as sales grow) and its rapid growth. The company notes that collaboration and royalty revenue, which is very high margin (close to 100%), contributes to a higher total revenue margin (86% in 2024).

    AI-generated summary of the company’s earnings call. Not investment advice.