We are raising Alnylam's (ALNY) fair value estimate to $92 per share from $74 to reflect positive phase 3 results evaluating the company’s lead drug patisiran in a type of hereditary amyloidosis neuropathy. Based on the stellar results and clean safety profile, we think the drug will likely receive approval in the U.S. and Europe in 2018, which drives our fair value change and peak sales estimates near $1 billion. Given our already limited expectations for Ionis’ competing amyloidosis drug inotersen due to safety concerns, we do not plan on adjusting our $46 per share fair value estimate for the company. Last month, Ionis’ partner GlaxoSmithKline opted out of inotersen commercialization. Ionis’ resulting increased profit share is offset by our lower expectations for the drug in our model, despite a more convenient administration than Alnylam’s patisiran.
Patisiran’s gene-silencing mechanism showed impressive efficacy across a broad spectrum of patients with hereditary ATTR amyloidosis with polyneuropathy, including those with cardiac involvement, which could set the drug up for a broader label than expected. Hereditary ATTR amyloidosis is a rare disease with high unmet need that has been historically categorized as familial amyloid cardiomyopathy (or FAC, accumulation of amyloid in the heart) and familial amyloid polyneuropathy (or FAP, accumulation of amyloid in the nerves), but today the industry views the disease as more of a spectrum (FAP typically precedes FAC). Alnylam’s phase III Apollo trial met its primary and secondary endpoints and showed no serious side effect imbalances against the placebo arm. Despite patisiran’s less convenient intravenous dosing, which requires the use of steroid pre-treatment, we believe the drug’s clean safety profile makes it an easy winner against Ionis’ inotersen. Alnylam’s next-generation drug ALN-TTRsc02, with subcutaneous dosing every couple of months, decreases the chance that Ionis’ drug will take meaningful market share.
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