Alnylam Pharmaceuticals (ALNY) is a biopharmaceutical company developing novel therapeutics based on RNA interference, or RNAi technology. 2007 was an exciting and a transformative year for the company. The multimillion dollar deal with Roche changed the financial landscape of the company and eased concerns regarding the company's operational cash flow.
The company successfully advanced its first candidate, ALN-RSV01, into phase II trials and combined its technical know-how and intellectual property with that of Isis Pharmaceuticals (ISIS) to launch Regulus Therapeutics. Regulus will seek to develop and commercialize micro RNA therapeutics.
We maintain our Hold rating on Alnylam shares with a target price of $27. For the company, 2007 was an exciting and transformative year. From signing a billion-dollar deal with Roche to the advancement of its first clinical product, ALN-RSV01 into phase II trials and the launch of Regulus Therapeutics (Alnylam's joint venture with Isis Pharmaceuticals), the company was hard at work to validate the RNAi technology.
However, we remind investors that both Sirna and Alnylam are both early stage development companies. With just one candidate in clinical stage development, we are hesitant to project any product related revenues for Alnylam before 2010.
There are far too many development risks before we can assume Alnylam can commercialize anything using the technology. Though the company's balance sheet is in good shape, valuation of the company at current levels remains a bit of a concern. We value Alnylam using relative valuation metrics.
The most comparable peers for Alnylam are Sirna Therapeutics and Isis Pharma. Market cap for Sirna was $923 million when it was bought by Merck (MRK) for $1.1 billion. Market cap for Isis is $1.342 billion. As such, we come up with a $27 price target with a market cap of $1.17 billion.
Varun Parwal contributed to this report.
Read the full analyst report on ALNY.
Read the full analyst report on MRK.
Read the full analyst report on ISIS.
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