Alnylam stock skidded Monday after the Food and Drug Administration rejected its drug, Onpattro, as a treatment for patients with a heart disease.
The rejection was unexpected. Alnylam Pharmaceuticals tested Onpattro in patients with transthyretin amyloid cardiomyopathy, which causes plaque to build up on the heart. The condition can lead to heart failure. Onpattro is already approved as a treatment for a related nerve disorder.
Onpattro met the primary goal of a final-phase study. Last month, an FDA committee voted 9-3, saying the benefits of Onpattro outweigh its risks in patients with cardiomyopathy. The FDA doesn't have to follow the committee's recommendation, but it does consider the vote in its approval decision.
"Not for the first time, the FDA does not follow the panel recommendation," RBC Capital Markets analyst Luca Issi said in a report. "But we can't think about many examples where the primary (test goal) is hit, the advisory committee votes in favor and the FDA still denies approval."
On today's stock market, Alnylam stock toppled 4.9% to close at 168.32.
Alnylam Stock: Insufficient Evidence
Alnylam noted the FDA didn't cite any clinical safety, study conduct, drug quality or manufacturing issues in its rejection letter. It simply states Alnylam didn't provide sufficient evidence to support Onpattro's clinical benefit for patients with cardiomyopathy.
In testing, patients who received Onpattro for a year could walk a median of 14.7 meters farther over six minutes than those who received a placebo, Alnylam said in September. The benefit was "modest" at best, RBC's Issi said.
Importantly, the rejection doesn't have an impact on Onpattro as a treatment for polyneuropathy due to transthyretin amyloidosis. But Alnylam is no longer seeking approval for Onpattro in cardiomyopathy treatment. Instead, it will focus on another drug called Amvuttra. Alnylam is currently studying Amvuttra — under the test name vutrisiran — in patients with cardiomyopathy.
Issi kept his outperform rating and 270 price target on Alnylam stock, however. He expects a delay of a year to a year-and-a-half for Alnylam in cardiomyopathy treatment. The study of Amvuttra is called Helios-B. That study involves twice as many patients and is running for three times longer than Apollo-B, the earlier study of Onpattro in cardiomyopathy treatment. He expects those results in early 2024.
"We believe the decision to discontinue further development of Onpattro for cardiomyopathy is prudent, as we believe the potential approval path would require an outcomes (study) and we see this void filled by vutrisiran in the near term," William Blair analyst Myles Minter said in a report.
He kept his outperform rating on Alnylam stock, though shares toppled to their lowest point since August 2022.
'One Of The Most Binary' Stories
Leerink Partners analyst Mani Foroohar noted Alnylam expects Amvuttra to cannibalize some of the sales of Onpattro. For 2024, the company expects $200 million to $225 million in sales from Onpattro. He cut his price target on Alnylam stock to 125 from 134, and reiterated his market perform rating.
The news Monday makes Alnylam stock "one of the most binary 2024 trades in our coverage."
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
