ALNY - Alnylam Pharmaceuticals: R&D Day Reveals Ambitious Plans

2023-12-18 09:00:00 ET

Summary

• Alnylam plans to significantly expand its clinical pipeline by the end of 2025, with over 15 new candidates entering the clinic.
• The company is targeting obesity and type 2 diabetes with liver, adipose, and muscle-directed candidates.
• Alnylam's next-generation ATTR amyloidosis candidate, ALN-TTRsc04, shows improved potency and convenience with no third-party royalty obligations.
• Pipeline expansion puts Alnylam in a strong position to deliver long-term shareholder value regardless of the outcome of Amvuttra's HELIOS-B trial next year.

Shares of Alnylam Pharmaceuticals ( ALNY ) are trading higher in the last two weeks, largely a consequence of the recent strong biotech rally, but there is probably some impact this week from the R&D day where the company revealed ambitious plans to significantly expand the clinical pipeline by the end of 2025 and plans to expand to additional tissues beyond the currently active programs in the liver and CNS.

The future looks very promising for genetic medicines and Alnylam will be at the forefront of innovation. While the outcome of Amvuttra’s HELIOS-B trial will have a big impact on the stock next year, the significant pipeline expansion should significantly reduce the risk of subpar long-term value creation if Amvuttra fails to deliver good results in the mentioned trial.

More than 15 candidates to enter the clinic by the end of 2025

Alnylam’s pipeline is advancing rapidly and the company expects to have more than 15 new candidates in the clinic by the end of 2025:

• 5 new wholly-owned liver-targeted candidates and 10+ if partnered candidates are included.
• 2 new CNS-targeted candidates and 3+ if partnered ones are included.
• 2 new wholly-owned candidates in new tissues, one targeting the adipose tissue and the other targeting the muscle.

The preclinical results in animals have so far translated very well to humans for RNA interference drugs in the liver, and, recently in the CNS (albeit only with one candidate), and I believe the probability of successfully reducing the expression of the targeted gene in other tissues is well above average for preclinical candidates.

Alnylam is also targeting genetically validated targets which further increases the probability of success in the clinic. But neither guarantees success and we have to see confirmation in humans, not just of efficacy because safety and tolerability are important as well.

Tackling obesity and type 2 diabetes with liver, adipose, and muscle candidates

Obesity is a hot topic in the biotech industry and Alnylam plans to enter this increasingly competitive space by using liver, adipose, and muscle-directed candidates.

ALN-KHK is already in the clinic, although this candidate is targeting type 2 diabetes. Ketohexokinase, or KHK, regulates fructose metabolism and is believed to contribute to hepatic steatosis and insulin resistance. Loss of function mutations in humans have been found to cause fructosuria, a benign and asymptomatic condition and Alnylam expects ALN-KHK to improve glycemic control but also to decrease liver fat.

This candidate has achieved proof-of-mechanism in the phase 1 trial in healthy volunteers as the fructose tolerance test has shown dose-dependent increases.

A phase 2 trial is expected to start in 2024 with the primary endpoint being HbA1C and the results are expected in 2025.

Another diabetes candidate is targeting a yet undisclosed gene currently called gene Y. This is a genetically validated novel insulin sensitizer that is expected to work as a standalone agent and in combination with SGLT2 inhibitors and/or GLP-1 receptor agonists, or GLP-1 RAs, for convenience. It is expected to decrease liver fat and enhance insulin sensitivity. IND submission is expected in 2024 and we may see preliminary data in 2025.

The candidate and target I find very interesting is INHBE for the potential treatment of obesity. The emerging unmet need in obesity, driven by the proliferation of GLP-1 RAs as well as the so-called double Gs (GIP/GLP-1) and triple Gs (GCC/GIP/GLP-1), is the significant loss of lean mass along with fat loss as well as poor adherence to therapy driven by gastrointestinal side effects, and weight rebound following discontinuation of GLP-1 RAs with more fat mass regain than lean mass and body composition end up being worse than before treatment.

Alnylam believes that candidate ALN-INHBE can be synergistic with GLP-1 RAs by enhancing lipolysis to bias weight loss to fat rather than lean mass, by allowing lower GLP-1 RA doses to achieve weight loss, and by preserving of lipolytic state and inhibiting of fat storage after GLP-1 RA therapy. So, a potential win-win-win scenario.

Preclinical data shows robust decreases of INHBE in animals and a development candidate selection is expected in 2024 which suggests we are unlikely to see clinical data until late 2025, or, more likely in 2026.

Two additional development candidates targeting obesity with undisclosed gene targets C and D were also mentioned, with gene C being in adipose tissue and gene D in the muscle.

Gene C variants are associated with a favorable metabolic profile and protection from type 2 diabetes and gene D loss of function carries have substantially increased muscle mass.

These candidates could work well with GLP-1 RAs and there is also the potential for combination use of two or even three of these candidates in the second half of the decade.

Beyond these targets and candidates, some additional candidates are expected to be developed for the treatment of type 2 diabetes.

Overall, these are not near-term value drivers, but the emerging obesity and type 2 diabetes pipeline could drive substantial value creation in the latter part of this decade and the 2030s. In other words, a very long investment horizon is needed to potentially capture the upside in these areas.

Initial positive data of ALN-APP are enough to expand the CNS pipeline

Alnylam’s first CNS candidate ALN-APP generated significant target gene knockdown in the phase 1 trial. This was an important de-risking event for the CNS platform but without much of an impact on Alnylam’s valuation. There are, perhaps, some concerns here as there is a partial clinical hold brought on by the FDA but not by other regulators around the globe and Alnylam is currently forced to enroll patients outside the United States.

But this regulatory setback has not frightened the R&D team and Alnylam now expects to push two new CNS candidates into the clinic by the end of 2025.

Additional data from the ongoing trial of ALN-APP could represent a near- and medium-term upside driver for the company.

Next-generation ATTR amyloidosis candidate brings improved potency, convenience, and no third-party royalty obligations

Alnylam reported impressive phase 1 results of ALN-TTRsc04 in healthy volunteers. The 300mg dose achieved greater than 90% TTR reduction on day 15, a 97% reduction on day 29, and a 93% sustained reduction through day 180. This looks better than the TTR reductions in the 80s seen from trials of Amvuttra and Onpattro.

Alnylam believes this candidate could be dosed subcutaneously once a year versus once quarterly administration for Amvuttra and once every three weeks intravenous administration of Onpattro.

Importantly, ALN-TTRsc04 has no royalty burden to third parties, unlike the lead product Amvuttra where royalties to partner Sanofi start from 15% and go up to 30% of global net sales.

The importance of ALN-TTRsc04 should increase substantially if Amvuttra delivers positive results in the HELIOS-B trial in ATTR amyloidosis cardiomyopathy patients next year, because, if Amvuttra fails, there will be little use for the next-generation candidate outside of the existing but much smaller ATTR amyloidosis polyneuropathy market. This is not to suggest the existing indication is not important because combined net sales of Amvuttra and Onpattro in the polyneuropathy indication are expected to exceed $850 million this year, and likely more than $1.1 billion in 2024, so, calling this a much smaller indication shows the potential in the cardiomyopathy market where Pfizer’s ( PFE ) tafamidis (Vyndaqel) is on track to generate more than $3 billion in net sales this year and continues to grow rapidly.

Other updates

I already covered zilebesiran and the Roche ( RHHBY ) deal when it was announced and do not have much to add here. This is a promising candidate with additional phase 2 data expected next year but with very long development timelines that make it less interesting in the next couple of years.

There are other targets and indications Alnylam will go after, including, but not limited to cholestatic liver disease, glutaric acidemia, bleeding disorders, inflammatory disorders, and pruritus. As you can see, the pipeline is increasingly expanding from rare diseases where Alnylam started to specialty and prevalent diseases.

Alnylam also announced plans to expand into the lung and heart but with longer development timelines compared to adipose tissue and muscle. I am looking forward to hearing more about these efforts.

And while this was not specifically covered on Alnylam’s R&D day, partner Regeneron ( REGN ) held a hematology R&D day of its own where it reported very strong interim phase 3 cohort A data of the combination of Alnylam’s liver-based C5 RNAi candidate cemdisiran and Regeneron’s monoclonal antibody pozelimab in PNH patients.

The theory that better C5 inhibition can be achieved by this combination is getting some early confirmation from these interim data. The combination was able to achieve deeper and more sustained LDH reductions compared to the current market leader – AstraZeneca’s ( AZN ) Ultomiris (ravulizumab) and Regeneron called these data “unprecedented.” 91% of patients taking the cemdisiran/pozelimab combination maintained adequate LDH control from week 8 through week 26 versus 73% of patients who received Ultomiris.

Cohort B is enrolling rapidly with topline results expected in 2026.

Regeneron is also actively enrolling a phase 3 trial in myasthenia gravis and the company revealed plans to start a phase 3 trial of cemdisiran/pozelimab in geographic atrophy in the first half of 2024.

I like this combination and believe it can be a decent-sized asset in the late 2020s and early 2030s by targeting PNH and myasthenia gravis, but I am not sure about what it can do in geographic atrophy. However, I should also mention that Regeneron would be the main beneficiary as it is in charge of commercialization while Alnylam is entitled to receive low double-digit royalties on global net sales.

Conclusion

I was impressed by Alnylam’s ambitious plan to significantly expand its clinical-stage pipeline in the following years and especially by plans to expand beyond the liver and CNS and into adipose tissue, muscle, and eventually heart and lung. However, these efforts will take time and I do not anticipate seeing meaningful value creation from new tissues and areas such as obesity and type 2 diabetes as meaningful clinical data are not expected until 2026, the exception being ALN-KHK with phase 2 data in type 2 diabetes patients expected in 2025.

I remain bullish on Alnylam’s long-term growth prospects, though less so about the near-term prospects if the HELIOS-B trial fails or disappoints next year.

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