Analyst Conference Summary

conference date: November 9, 2015 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2015 (third quarter 2015, Q3)

Forward-looking statements

Overview: Development stage company continues to make progress with its RNAi therapies.

Basic data (GAAP):

Revenue was $6.3 million, down sequentially from $8.7 million, and down from $11.0 million year-earlier.

Net loss was $76.8 million, down sequentially from loss of $71.8 million, and down from loss of $44.0 million year-earlier.

Diluted EPS was negative $0.91, down sequentially from negative $0.85, and down from negative $0.58 year-earlier.

Guidance:

Cash at year end $1.2 billion. Revenue from collaborators consistent with Q3. R&D expense expected to increase sequentially, but G&A should be flat.

Conference Highlights:

Advancing a very robust RNAi pipeline addressing major unmet medical needs. Expects to have 9 programs in clinical development by the end of year.

Believes the talk about drug pricing is caused by a small group of bad actors in the industry, plus political rhetoric. The deal of rewarding innovators with an exclusivity period benefits society in the long run when the innovative medicines go generic later. Alnylam wants to make the therapies it develops available to all patients who need them.

All revenue was from collaborators: $2.8 million from The Medicines Company, $3 million from Genzyme, and $0.5 million other. Some of this revenue resulted from payments for milestones achieved.

A U.S. District Court granted Alnylam summary judgment in the Tuschi patent dispute.

Cash and equivalents balance at the end of the quarter was $1.34 billion, down sequentially from $1.40 billion. Expects to end 2015 with over $1.2 billion cash. Investment in Regulus figured at $38.6 million; it had been $94.6 million at the end of 2014.

Analyst R&D day will be December 10, 2015.

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.

ALN-PCSsc Phase 1 study reported positive clinical data. Partnered with The Medicines Company, which plans to start a Phase 2 trial before year end. ALN-PCSsc targets PCSK9 to treat hypercholesterolemia (high cholesterol). Results may support quarterly dosing.

Patisiran APOLLO Phase 3 trial for the treatment of ATTR amyloidosis FAP should complete enrollment in 3 to 4 months. If data is positive could file an NDA with the FDA in 2017. Data from the patisiran Phase 2 extension study was reported, including improved nerve fiber density.

Revusiran Phase 3 ENDEAVOR study continued to enroll ATTR amyloidosis FAC (familial amyloidotic cardiomyopathy) patients. A study timeline will be provide next year. Phase 2 extension study data reported sustained TTR knockdown.

ALN-AT3 for hemophilia and rare bleeding disorders continued a Phase 1 study and initiated a Phase 1 extension study. Genzyme elected to opt into the ALN-AT3 program, with goal of commercializing outside of U.S. and Europe. More data will be available at ASH.

ALN-AS1 for acute hepatic porphyrias reported positive clinical data from the initial phase of the ongoing Phase 1 trial. Results support a monthly or perhaps quarterly dosing regimen.

ALN-CC5 for complement-mediated diseases continued dosing in a Phase 1 trial. It will roll into a 1/2 trial.

ALN-AAT for ATT deficiency liver disease had a Phase 1/2 trial initiated.

ALN-GO1 for primary hyperoxaluria is set to start a Phase 1 study in early 2016.

The company had previously reported that the Phase 2 study of revusiran for FAC and senile systemic amyloidosis (SSA) had three patients discontinue due to injection site reactions, but has otherwise been well tolerated. Initial data is expected before the end of 2015. The FDA granted orphan drug status to rivusiran.

ALN-HBV could file a CTA in late 2015 for hepatitis B. The Phase 1 study could begin in early 2016.

Considerable data will be presented on Alnylam programs at ASH in December. The coming months will be very data rich.

See also Alnylam pipeline.

Operating expenses of $84.7 million consisted of: $68.6 million for research and development and $16.0 million for general and administrative expense. Interest income was $1.6 million. Income taxes $0 million.

Headcount increased in the quarter to expand the R&D pipeline.

Q&A:

PS1 program translation of patient types? PS1 porphyria program. ASH asymptomatic patients will transition to recurring PAC patients later next year.

AT3 ASH data? Yes, we will have annualized bleed data by dose and by anti-p. We'll see initial period data when knockdown is partial, and then during peak knockdown. In inhibitor patients, we have a serum sample assessment paper, but not inhibitor patient data.

C5 target level? Nothing has changed regarding serum levels. All the data will be shared, our target is 80% activity.

2016 R&D run rate? Formal guidance will be given in the Q4 call in February. We will definitely see some sort of increase in R&D spend in 2016 vs. Q4 2015.

Revusiran, relation of variables to outcomes? We brought out the FAC natural history study data showing it is a devastating disease, SSA is associated with significant morbidity, median survival is well under five years. The prominent genotype is B1C2i (?), as data matures we will get insight into the relationship between outcomes and mutations.

HBV program liver meeting expectations, timeline? The development candidate is just finishing up, we should file a CTA in December, study could begin in Phase 1. We should see data some time this year. We are also interested in hepatitis delta as a target.

Sanofi decision timeline? We have an amazing relationship with Sanofi, we met with them last week. Alnylam was featured in their R&D on Friday. They opted into hemophilia on a regional basis. On porphyria they could take it globally next year, or just do regional. A number of other programs with Phase 1 readouts in 2016 could also be available for options for them.

Nerve fiber density data? We saw 4.9 mm per cube increase, that is a really remarkable result. That has not been shown before in this disease. It is additional data for TTR knockdown outcomes for regulators to consider. It is an objective measurement by an outside scientist.

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