Goldman Drops Alnylam From Conviction List, But Continues To See 'Blockbuster Potential'

The FDA recently approved Alnylam Pharmaceuticals, Inc. (NASDAQ: ALNY)'s patisiran for polyneuropathy caused by hereditary transthyretin-mediated amyloidosis in adults.

The genetic, often lethal, disease leads to abnormal buildup of amyloid protein in peripheral nerves, heart and other organs, which results in nerve as well as organ damage.

The Analyst

Goldman Sachs analyst Terence Flynn maintained a Buy rating on Alnylam and lowered the price target from $193 to $155.

The analyst removed Alnylam from Goldman's Americas Conviction List.

The Thesis

The approval was in line with expectations, especially after the Eeuropean Union issued a positive Committee for Medicinal Products for Human Use opinion last month, Flynn said in a Monday note. (See the analyst's track record here.) 

The analyst views the cardio data included in the U.S. label as disappointing, leaving Alnylam at a disadvantage to Pfizer Inc. (NYSE: PFE)'s rival drug candidate Tafamadis.

Full Phase 3 data for Tafamadis is due later this month, Flynn said.

Citing potential headwinds from the patisiran label and likely competition from Pfizer, the analyst lowered the U.S. penetration assumption for patisiran from $2.9 billion to $2.1 billion.

Alnylam shares have lost about 22 percent since they were added to the Conviction List on Dec. 15, 2017 versus a 10-percent gain for the S&P 500 Index, Flynn said. 

Goldman stuck with its Buy rating on Alnylam, as it said competitive risk is already priced into the stock. 

" We ... continue to project blockbuster potential for Patisiran/ALN-TTR-sc02 and believe there is pipeline optionality with data from two additional [Phase 3] assets expected in 2H18-2019," Flynn said. 

The Price Action

Alnylam shares have lost about 23 percent year-to-date.

The stock was trading down 7.36 percent to $90.21 at the time of publication Monday. 

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