What’s Next For Alnylam Stock After A 60% Rise In A Week?

Alnylam Pharmaceuticals stock (NASDAQ: ALNY), a pharmaceutical company focused on RNA interference therapeutics for genetically defined diseases, has seen a significant rise of 60% in a week. This can be attributed to positive data from a late-stage clinical trial for its cardiovascular drug,  Amvuttra. In comparison, pharmaceuticals giant Pfizer (NYSE: PFE) saw its stock rise by 1% over the last five days. Note that Amvuttra is already approved by the U.S. FDA for polyneuropathy of hereditary transthyretin-mediated (hATTR) amyloidosis in adults. The recent trial focused on transthyretin amyloid cardiomyopathy (ATTR-CM), a condition characterized by the accumulation of irregular proteins in the heart muscles. If approved for ATTR-CM, Amvuttra will compete with Pfizer’s Vyndaqel and Vyndamax. For patients already treated with Pfizer’s drug, Alnylam’s drug reduced deaths and hospitalizations by 28%. Amvuttra’s peak sales are expected to be between $3.5 billion and $4 billion by 2032. ^[1]

Looking at ALNY stock performance over a slightly longer term, it has seen extremely strong gains of 90% from levels of $130 in early January 2021 to around $245 now, vs. an increase of about 45% for the S&P 500 over this period. However, the increase in ALNY stock has been far from consistent. Returns for the stock were 30% in 2021, 40% in 2022, and -19% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 24% in 2023 — indicating that ALNY underperformed the S&P in 2023.

In fact, consistently beating the S&P 500 — in good times and bad — has been difficult over recent years for individual stocks; for heavyweights in the Health Care sector including UNH and JNJ, and even for the megacap stars GOOG, TSLA, and MSFT. In contrast, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has outperformed the S&P 500 each year over the same period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.

Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could ALNY face a similar situation as it did in 2023 and underperform the S&P over the next 12 months — or will it see a strong jump? Despite its large recent move, ALNY stock may have more room for growth. ALNY stock now trades at 15x trailing revenues, compared to the 22x average over the last three-years. The stock price growth and valuation multiple largely aligns with our forecast four-years ago.

Alnylam’s revenue has surged nearly 4x from $493 million in 2020 to $1.8 billion in 2023 and is estimated to top $2.5 billion in 2025. This can be attributed to market share gains for Amvuttra and continued growth for Givlaari and Oxlumo. With Alnylam pushing for Amvuttra’s regulatory approval for ATTR-CM later this year, the company can look forward to continued strong sales growth in the coming years. Overall, the recent development around Amvuttra is a big positive for Alnylam, and it has boded well with the investors, evident from a 60% rise in a week. From the stock’s perspective, we think it still has room for growth, even after considering the recent move.

While ALNY stock appears to have more room for growth, it is helpful to see how Alnylam’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.

[1] Returns as of 6/27/2024
[2] Cumulative total returns since the end of 2016

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1. Alnylam’s drug cuts risk of death, heart issues in key study, shares jump, Bhanvi Satija, Reuters, June 24, 2024 [↩]