Cardiomyopathy Launches And Pipeline Expansion Will Sustain Momentum Into 2025

Key Takeaways

• Growing market adoption and global expansion of core RNAi therapies, alongside efficient payer access, are driving sustained revenue growth and operational leverage.
  
• Advancing pipeline assets and leadership in rare disease innovation position the company to benefit from ongoing healthcare sector trends and precision medicine expansion.
  
• Heavy reliance on a single franchise, margin compression, and regulatory risks threaten revenue growth and profitability despite ongoing investments in pipeline expansion and commercialization.

Catalysts

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

• The rapid and robust uptake of AMVUTTRA for ATTR-CM in its first full quarter post-approval-combined with near-universal first-line payer access and minimal patient out-of-pocket costs-indicates a much larger addressable market for Alnylam's RNAi therapies as diagnostics and disease awareness improve, supporting sustained double-digit revenue growth.
  
• International expansion for AMVUTTRA in major markets (Germany, Japan, Brazil, EU) is only just starting and is expected to contribute meaningful incremental revenue in the second half of the year and beyond, with global rollouts benefiting from favorable reimbursement dynamics for high-impact orphan drugs.
  
• Advancements in Alnylam's pipeline (e.g., fast-tracked nucresiran for ATTR-CM, mivelsiran in Alzheimer's, new programs in diabetes and bleeding disorders) demonstrate increasing R&D efficiency and accelerate time-to-market, potentially driving future step-function increases in both revenue and operational leverage as more assets advance or launch.
  
• The strong track record of rapid health system integration and scalable commercial execution, with SG&A and R&D investments offset by exceptional sales growth, points to the start of meaningful operational leverage-improving net margins as product revenues outpace fixed cost escalation.
  
• Broader long-term trends of increasing rare disease prevalence and expanding healthcare/pharma spend-amplified by Alnylam's leadership in RNAi technology-position the company to benefit disproportionately from continued innovation in precision medicine, supporting enduring earnings growth and potentially leading to upward re-rating of the company's stock.

Alnylam Pharmaceuticals Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Alnylam Pharmaceuticals's revenue will grow by 41.8% annually over the next 3 years.
• Analysts assume that profit margins will increase from -13.0% today to 26.8% in 3 years time.
• Analysts expect earnings to reach $1.9 billion (and earnings per share of $13.46) by about September 2028, up from $-319.1 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $4.3 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 37.8x on those 2028 earnings, up from -183.8x today. This future PE is greater than the current PE for the US Biotechs industry at 15.5x.
• Analysts expect the number of shares outstanding to grow by 1.63% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.

Alnylam Pharmaceuticals Future Earnings Per Share Growth

Risks

• Ongoing net price reductions and increasing gross-to-net adjustments for AMVUTTRA, driven by factors such as Medicare Part D rebate obligations, higher 340B channel utilization, and potential payer pressures, may lead to lower realized revenues per prescription over time, weighing on overall revenue growth and compressing net margins.
  
• Sustained high levels of R&D and SG&A spending to support pipeline development and expand commercial operations-while necessary for future launches-could exceed top-line growth if new programs do not achieve commercial success, leading to prolonged pressure on net margins or delays in achieving sustained profitability.
  
• Heavy revenue reliance on the TTR franchise (particularly AMVUTTRA) exposes Alnylam to revenue concentration risk; setbacks in launch trajectory, negative trial outcomes, or competitive encroachment in TTR amyloidosis could disproportionately impact earnings and share price.
  
• Declining gross margins due to increased royalty obligations on AMVUTTRA sales-highlighted by a reduction from 84% to 79% year-over-year and expectations for further decreases as sales ramp-may limit near-term profit expansion even in the face of robust revenue growth.
  
• Long-term revenue forecasts assume continued broad payer reimbursement and minimal access restrictions; should regulatory or payer environments tighten in the future (including expanded price controls, cost containment, or increased prior authorizations/step-edits), revenue growth and margins could be materially constrained.

Valuation

• The analysts have a consensus price target of $426.26 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 $583.0, and the most bearish reporting a price target of just $236.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $7.0 billion, earnings will come to $1.9 billion, and it would be trading on a PE ratio of 37.8x, assuming you use a discount rate of 6.8%.
• Given the current share price of $447.43, the analyst price target of $426.26 is 5.0% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
• 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.