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Alnylam (NASDAQ:ALNY) missed third quarter revenue and EPS estimates, primarily due to lower-than-expected collaboration revenue, but Amvuttra is off to a strong start in the United States with double the monthly patient starts Onpattro was able to achieve in the first half of the year. This is an indication of increased demand for a more convenient product. The company reiterated the full-year revenue guidance range and indicated revenues are trending near the lower end of the range due to the strength of the U.S. dollar which is having a significant negative impact on ex-U.S. net sales this year.
Analysts on the earnings call seemed more concerned about Onpattro’s regulatory position following the APOLLO-B phase 3 data the company reported in the third quarter, but their questions remained unanswered as the company does not comment on ongoing regulatory interactions.
Amvuttra off to a strong start
Amvuttra generated $25.1 million in net sales in its first quarter on the market in the United States. About a third of the sales represent inventory stocking, and the rest are actual sales.
Amvuttra was easier to launch than Onpattro, not only because of the convenience of subcutaneous dosing every three months versus IV infusion every three weeks for Onpattro but because nearly 60% of the 180 new patient starts in the quarter were switches from Onpattro and the other 40% were new patient starts.
In the first four months of launch, new patient start forms for Alnylam’s TTR franchise in the United States have doubled from 30 to 60 per month. It is still early, but the doubling of new patient starts suggests Alnylam was correct in anticipating increased demand for Amvuttra due to the above-mentioned convenience factor.
Launches in Japan and Europe are expected this quarter and should lead to similar growth acceleration in these territories.
It seems likely that Alnylam’s TTR franchise will exit 2022 with an annualized net sales run rate of close to $800 million, and sales will likely exceed $1 billion next year, excluding the potential impact of Onpattro’s label expansion to include ATTR amyloidosis patients with cardiomyopathy.
No upside to guidance due to significant currency headwinds
Despite the strong start of Amvuttra, the company reiterated the full-year revenue guidance range of $870 million to $930 million. Management says revenues are trending closer to the low end of the guidance range due to the strength of the U.S. dollar.
The Y/Y growth rate was held back by 10% this quarter due to the foreign exchange impact. According to my calculations, Onpattro’s revenues were approximately $20 million lower year-to-date due to the strength of the dollar, and Givlaari’s and Oxlumo’s revenues $4 million and $2 million, respectively.
Based on the year-to-date growth trends, I expect full-year net sales to be in the $885-890 million range.
I should also note that while Onpattro and Givlaari are generally living up to expectations, Oxlumo is not. And that is even considering the loading dose situation that has temporarily inflated the early launch numbers (each patient starts with three monthly doses of Oxlumo, followed by once quarterly dosing, meaning Oxlumo’s price per patient in the second year is 33% lower).
I previously believed Givlaari and Oxlumo could each generate approximately half a billion in annual global peak sales. Givlaari seems on track to reach that estimate, but it now looks like Oxlumo will not get there and currently looks like (at best) a $250-300 million a year product in the primary hyperoxaluria type 1 market.
However, Oxlumo has another shot on goal that could make it a mass-market drug – a potential treatment for recurrent kidney stones. But we are yet to see clinical proof of concept results in this indication.
Analysts question Onpattro’s regulatory position
Most of the analyst questions on the third quarter earnings call were related to Onpattro and its regulatory position following the APOLLO-B data. The modest 6-minute walk benefit and the lack of statistically significant differentiation to placebo on the safety side had analysts wonder about the approvability of Onpattro for the treatment of ATTR amyloidosis cardiomyopathy.
Their efforts proved futile as management refused to answer any of the questions due to its policy of not talking about regulatory interactions, although they did reiterate their confidence in Onpattro’s risk-benefit profile.
The additional data the company reported since my previous article did little to change Onpattro’s regulatory or commercial outlook – I think it will have a hard time competing against tafamidis and it should have a short time to do so given the upcoming HELIOS-B data in early 2024 that will likely make Onpattro obsolete. The cannibalization of Onpattro in the polyneuropathy market has already started.
Pipeline updates – Stargardt disease the first casualty of the inflation reduction act?
Alnylam scrapped its plan to initiate a phase 3 trial of vutrisiran (Amvuttra) for the treatment of Stargardt disease due to the company’s ongoing evaluation of the impact of the Inflation Reduction Act on therapies being developed for orphan diseases. This is related to Medicare price negotiation for newly approved products that start from year nine for small molecules and year thirteen for biologics.
The problem here is that Amvuttra is already approved which meant the countdown to year nine had already begun and adding a second indication does not reset the clock and means the effort to develop Amvuttra for Stargardt disease may not be a worthy investment as Alnylam would have only four to five years to generate a return on investment in this indication.
There were no other meaningful pipeline updates, and the most important near-term catalyst, the preliminary phase 1/2 data of ALN-APP in patients with early onset Alzheimer’s disease, was pushed out from late 2022 into early 2023. The change reflects the progression through dose-escalation cohorts at a “measured pace and the rigor” with which the company is screening for appropriate patients for the study that meet the inclusion and exclusion criteria.
ALN-APP is Alnylam’s first central nervous system candidate, and I do not expect to see a treatment benefit at this early stage of development and with very limited follow-up, but it will be important to see if ALN-APP can achieve significant target gene knockdown with no safety issues because achieving this would have positive implications for the whole CNS platform and would allow significant pipeline expansion in the following years. This is not an area where I have high confidence in a positive outcome, but if preclinical data of CNS candidates translate into the clinic as well as the data from Alnylam’s liver-directed candidates, we should see a strong reduction in target gene expression with acceptable safety and tolerability.
Financial overview
Alnylam ended the quarter with $2.3 billion in cash and equivalents, a slight decline from $2.4 billion at the start of the year. But cash burn was higher than this number suggests as the company received approximately $200 million from the exercise of employee option awards and another $135 million from the recent issuance of convertible debt, net of repayment of the Blackstone credit facility.
The company is in good financial shape and increasing revenues in the following quarters should reduce the cash burn. Depending on the trajectory of both, it is possible that Alnylam reaches cash flow breakeven by late 2024 or in the first half of 2025.
Conclusion
Amvuttra is off to a strong start in the United States, doubling the new patient starts of Onpattro in the first four months on the market and we should see similar growth trends in Japan and Europe in the following quarters. Analysts were more interested in Onpattro’s regulatory prospects, but their questions were left unanswered and Amvuttra and the HELIOS-B trial results remain far more important for the long-term future of Alnylam’s TTF franchise.
The company is in good financial shape and well positioned to continue to expand its pipeline in the following years and the key pipeline catalyst in the near term is the phase 1/2 data of ALN-APP in early-onset Alzheimer’s disease in early 2023 as positive results in terms of reduction in target gene expression could mark the start of the significant expansion of the company’s CNS pipeline.
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