Analyst Conference Summary

conference date: May 7, 2015 @ 1:30 PM Pacific Time
for quarter ending: March 31, 2015 (first quarter 2015, Q1)

Forward-looking statements

Overview: Development stage company continues to make progress with its RNAi therapies, but beware the market capitalization already assumes a great deal of success.

Basic data (GAAP):

Revenue was $18.5 million, up 123% from $8.3 million year-earlier.

Net loss was $50.8 million, improving from $250.9 million year-earlier.

Diluted EPS was negative $0.62, improving from negative $3.70 year-earlier.

Guidance:

Collaborator revenue is expected to decrease during the remainder of 2015. Expects to end the year with greater than $1.2 billion in cash.

Conference Highlights:

All revenue was from collaborators: $5.6 million from Monsanto, $5.5 million from Takeda, $2.0 million from The Medicines Company, $1.8 million from Genzyme, and $3.6 million from reagent licenses. Some of this revenue resulted from payments for milestones achieved.

In January Alnylam sold its common stock at $95 per share, raising $496.4 million in cash. In addition Genzyme also bought $70.7 million of common stock at $95. Genzyme owns about 12% of Alnylam common stock, and has an agreement allowing it to buy shares for cash based on the number of compensation-related shares issued the prior year. In January Genzyme exercised this right, paying $18.3 million at $93 per share.

Alnylam made a new agreement with Isis Pharmaceuticals to extend their alliance.

Cash and equivalents balance at the end of the quarter was $1.45 billion.

Strategic program "Alnylam 2020" provides guidance for the commercialization of RNAi therapies through 2020, assuming the clinical data supports that. Expects to have 3 commercial products by 2020, with a robust follow-up pipeline of 10 clinical programs.

Patisiran Phase 2 open-label extension study showed evidence of possibly halting progression of neuropathy in FAP (Familial Amyloidotic Polyneuropathy). The Phase 3 study ATTR with FAP continued to enroll patients, as did the Phase 3 study of revusiran in ATTR with FAC (Familial Amyloidotic Cardiomyopathy).

A Phase 1 trial of ALN-AT3 provided initial evidence of being able to correct hemophilia. The ongoing study is transitioning to once-monthly dosing. Data will be presented on June 23 at the ISTH Congress.

A Phase 1/2 trial of ALN-CC5 for PNH (paroxysmal nocturnal hemoglobinuria), but in healthy volunteers initially, was started in the quarter.

The Phase 1 trial of ALN-PCSsc progressed from single ascending dose phase to the multi-dose phase, announced today. The target is cholesterol (LDL-C).

In mid 2015 Alnylam plans to initiate a Phase 1 trial of ALN-AS1 for hepatic porphyrias.

See also Alnylam pipeline.

Operating expenses of $70.8 million consisted of: $58.0 million for research and development and $12.7 million for general and administrative expense. Interest income was $1.0 million. Income tax benefit was $0.4 million.

Q&A:

SAP safety and efficacy bar? We think Patisiran is the best in class RNAi therapy for ATTR. Our competitors presented median knockdown data, which we find odd. Our data suggest that the therapy actual halts the progress of the neuropathy, and appears to be safe. The risk/benefit looks excellent.

Path forward for CC5 PNH program? We are busy thinking about the pivotal approach in PNH. Suppression of LDH is the key. Three possiblities: a switch study from a current therapy; a single arm study compared to historical data; or a placebo controlled study. ALN-CC5 data is quite interesting, and we will share it this year. We hope to have the first patient enrolled late in the year, so data would come in 2016.

ALN-AAT trial designs? It will be 1/2, with both healthy volunteers, and then AAT deficiency associated liver disease patients. CTA for AAT to be filed midyear.

AT3 hemophilia program plans? We would hope that Phase 1 will give us enough information about dosing and efficacy that we could consider skipping Phase 2 and going straight to Phase 3. We could also go to open label extension studies from Phase 1.

Hepatitis B program? We have our development candidate, we are doing toxicity studies, a Phase 1 trial could start late this year or early in 2016. We think this is going to be a winning program in the field.

The ALN-PCSsc program is partnered with The Medicine Company and they would determine the clinical path following the Phase 1 trial. The goal is to have a higher probability of increasing patient outcomes by getting to their target LDL level. PCSK9 knockdown could work with a once per quarter injection. It could be a disrupter of the PCSK9 market that is developing this year (if Amgen and Sanofi/Regeneron get approvals).

Sanofi's options in Hemophilia program? We currently are partnered with Genzyme for revusiran and patisiran; they have options across the rest of our genetic medicines pipeline. Following proof-of-principal, in most case end of Phase 1, they decide whether to opt in. In AT3 specifically, if they opt in they can choose a regional collaboration with our retaining U.S. and Europe, and their getting rest of world. After the AS1 Phase 1 they have to decide whether to take AS1 globally, or a co-development program with us on AT3 in Europe and they take rest of world and we take porphyria.

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