Edinburgh Worldwide enlightenment: Alnylam

As with any investment, your capital is at risk.

Earlier this year, Edinburgh Worldwide co-manager Douglas Brodie travelled to Alnylam’s Boston headquarters to meet with Kevin Fitzgerald, chief scientific officer, and Jeff Poulton, chief financial officer. He witnessed first-hand the evolution of what we consider today’s most powerful proprietary drug development platform, as it transitions from its focus on rare diseases to much broader applications.

Rare disease breakthrough

In June 2024, Alnylam announced stellar results of a trial for a drug called vutrusian (now marketed as Amvuttra), used to treat transthyretin amyloidosis cardiomyopathy (ATTR-CM) – a rare disease that causes irregular proteins to build up in the heart potentially resulting in heart failure.

The trial showed a 30 per cent reduction in patient mortality rates. We viewed these results as an important validation of our long-held thesis about Alnylam's ability to develop a platform of therapies based on its unique approach to RNA interference (RNAi) – the natural process through which cells control the number of proteins they produce.

Capturing a $64bn market

The market for ATTR-CM treatments represents one of medicine’s most compelling opportunities. It is a condition affecting hundreds of thousands globally that was underdiagnosed and untreated until recently. Market research suggests the broader ATTR-CM treatment market could reach $64bn by 2033, up from $4.3bn in 2024.

While our earlier analysis identified Amvuttra’s potential to capture $2-4bn in annual sales, recent studies reveal an even more compelling picture. Leading sell-side analysts now model peak sales of $8-12bn for Amvuttra, driven by robust pricing, better diagnosis rates, meaningful impact on survival. As such, Amvuttra is becoming considered the standard treatment for new diagnoses.

We’ve updated our models based on these enlarged forecasts, yet these could still prove conservative.

The drug’s superiority over Pfizer’s Tafamidis, which currently generates $5.5bn annually, is increasingly evident in real-world use. Crucially, with Tafamidis facing patent expiry concerns in 2028-2029, Amvuttra is attractively positioned to capture the lion’s share of this rapidly expanding market.

In short, Amvuttra could be a defining asset for Alnylam, that sustains growth well into the 2030s.

The best job in biotech

The recent meeting, however, revealed the true breadth and scale of the unfolding commercial opportunity.

With access to Alnylam’s revolutionary RNAi platform, unprecedented genomic insights, and a corporation growing rapidly in ambition and relevance, it’s hard not to think that Kevin Fitzgerald sits at the epicentre of a biology revolution – with possibly the best job in biotech.

The meeting focused on three key areas:

• First, Alnylam’s ability to compress development timelines, from early research to clinical testing, versus the industry standards.
• Second, their impressive record of achieving positive Phase 3 trial results from over 60 per cent of their applications, far exceeding industry norms where overall clinical success rates hover around 5-10 per cent.
• Third, their therapeutic ambitions are expanding beyond rare diseases to large market opportunities.

Fitzgerald left a lasting impression on us with his confident assertion: “People just don’t understand how good we have become at doing this, and the speed at which we can now move.”  And it’s not corporate bravado – we believe Alnylam has genuine competitive advantages that are apparent to those willing to look beyond biotech’s notorious short-termism.

More than rare diseases

Beyond ATTR-CM, Alnylam’s pipeline now spans other major areas, including cardiovascular health, neurological conditions, and metabolic disorders – representing multi-billion-dollar opportunities far exceeding the current rare disease franchise.

Particularly exciting are developments in Alzheimer’s disease, where Alnylam is using RNAi treatment Mivelsiran to target amyloid proteins – potentially addressing the disease’s mechanism before plaques can build up in the patient’s brain.

Alnylam is also tacking cardiovascular conditions, such as high blood pressure. Their Zilbisiran hypertension programme, developed in partnership with Roche, aims to provide a treatment for the 62 million patients today with uncontrolled hypertension, where traditional medications fail to manage daily blood pressure variations.

With positive mid-stage results already announced, this program alone could represent another multi-billion-dollar opportunity.

Significant upside potential

Following the commercial success of Amvuttra, Alnylam’s share price has rallied, increasing roughly 85 per cent since end June 2024. Subsequently, we’ve recycled a portion of the holding, primarily to manage portfolio concentration.

Valuation awareness is a critical component of our process. Mindful of the sharp price moves, we used our meeting in Boston with Alnylam’s senior management as a prompt for a valuation reassessment.

Our analysis of Alnylam’s opportunity can be split into three components: existing commercial assets, visible clinical pipeline, and platform value.

The existing commercial assets, dominated by Amvuttra, essentially justify the current share price. Then, considering the diverse pipeline and growing platform value, we believe our long-term time horizon and familiarity with Alnylam provide an edge.

Many sell-side analysts will discount such businesses using industry-standard success metrics, based on the average probability of developing effective drugs. Given Alnylam’s sector-leading approval and time-to-market rates, we are more bullish than the market.

This analysis suggests compelling upside from current levels, with a credible path for Anlylam to be worth multiples of its current value.

Looking forward

Amid a sea of biotech boom-bust cycles, Alnylam’s platform approach promises something increasingly rare: predictable, scalable innovation.

While the opportunity is compelling, we acknowledge the risk of future price volatility. Setbacks at key stages, such as regulatory approval, or unexpected clinical data for its Alzheimer's and hypertension programmes, could impact valuation in the future. Yet, the platform’s diversity provides multiple shots on goal.

Recognising this, we confidently hold Alnylam among our largest positions.

Our recent meeting reinforced our conviction that Amvuttra’s commercial success represents just the beginning of a much larger transformation story. We believe that Alnylam is positioned to leverage its proven platform into one of medicine’s biggest opportunities.

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