​Is The Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) Halt An Oversell Opportunity?

Mark Collins  |

Alnylam Pharmaceuticals, Inc. (ALNY) just announced that it has halted one of its lead development programs. The company has taken a more than 16% hit on the news and looks set to give up further strength as the week draws to a close.

At a glance, the news looks damning for the company and its shareholders, especially as relates to the program in question, and the market response is reflecting this interpretation.

Are things as bad as markets are making out? If not, there may an opportunity to pick up some Alnylam shares in anticipation of a recovery.

So, let's ask that question.

First up, let's outline what's happened.

The drug in question is called fitusiran and Alnylam was investigating it as part of a phase II program designed to establish safety and efficacy in a target indication of hemophilia. As per the latest release, the trial is now halted due to the fact that a patient on the trial died of brain swelling triggered by a blood clot.

The story is that the patient in question started to develop some pain after exercising (in his hip) and then developed a severe headache. He was hospitalized for two weeks and eventually died from cerebral edema.

Obviously, this is not a great thing to happen no a clinical trial. It's sad for all involved, especially the family of the patient that died, but the immediate response is to blame the active trial drug. To put this another way, this is a default action by Alnylam and the halt in and of itself shouldn’t be interpreted as confirmation that fitusiran has caused the death.

With that said, this isn’t the first time these sorts of therapies have come under fire and – to make matters even worse for Alnylam – it's not even the first time one of its own pipeline drugs has raised safety concerns. Most notably, in October last year, the company had to stop a trial of an asset called revusiran, which was under investigation for a condition called hATTR cardiomyopathy, after 18 patients died, 16 of which were on the active arm of the study (i.e. were given the trial drug, as opposed to placebo).

The drug type in question is rooted in RNA interference (RNAi), and it's long been a class of drugs that many believe could make a major difference across a spate of different disease types. Most have failed to successfully complete a development program, however, and many of these assets that have failed have done so rooted in safety concerns.

The thing is, nobody is really sure how these types of drugs interact with the body. That is, we know the particular impact they have on the target RNA, but we don't know how this interference is going to play out in other areas of a patient's composition. This is often he case in biotechnology, so this shouldn’t be read into as implicative of the drug being dangerous, but it does make it difficult to preempt these sorts of safety concerns ahead of a large scale trial.

So, let's get to the initial question. Is this a misinformed oversell?

It would be speculative to say no, since the bottom line is that nobody really knows right now and to be certain we're going to have to wait until the review comes in. With that said, however, the patient population that took part in this trial is large and many were ready to move into a phase III program that would have – eventually – underpinned a registration application.

Further, this isn’t a death rate to anywhere near the same scale that occurred with the above mentioned revusiran trial and – as yet – there's no confirmation that it's anything to do with the drug being administered.

So, bottom line: for the risk averse investor, this one's probably worth staying away from until we get some clarity on what's behind the cerebral edema. For a slightly more risk tolerant operator, however, this could be a decent punt in anticipation of fitusiran being let off the hook and the program continuing on its path towards registration.

Disclosure: The author has no positions in any of the stocks mentioned in this piece.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.


Symbol Name Price Change % Volume
ALNY Alnylam Pharmaceuticals Inc. 92.05 1.59 1.76 365,687 Trade



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