Surprise Rejection by the FDA Deals a Blow to Alnylam Pharmaceuticals

In a surprising turn of events, the Food and Drug Administration (FDA) has rejected the approval application submitted by biotech company Alnylam Pharmaceuticals. This news has caused a 7% drop in the company's stock price, which now stands at $164.62 in morning trading.

Expanded Approval for Onpattro Denied

Alnylam had sought expanded approval for its drug, Onpattro, this time targeting patients suffering from transthyretin amyloidosis (ATTR) who also develop cardiomyopathy, a debilitating heart condition. In 2018, the FDA had granted approval for Onpattro's use in patients with hereditary forms of ATTR who experience polyneuropathy, a nerve disorder.

FDA Not Satisfied with Clinical Effectiveness

In a press release issued on Monday morning, Alnylam revealed that the FDA was not convinced of the clinical meaningfulness of Onpattro's efficacy. This unexpected rejection comes as a blow to the company, as an approval in the cardiomyopathy indication could have led to a significant boost in sales. Alnylam recorded sales of $1 billion in 2022.

Efficacy Concerns Surrounding Onpattro

While there are more patients suffering from ATTR with cardiomyopathy than those with polyneuropathy, concerns about Onpattro's efficacy in this indication have been a cause for hesitation. Analysts had already expressed muted expectations for the drug's commercial success.

Outside Advisory Committee's Vote

The potential approval in the new indication seemed likely, considering that an outside advisory committee convened by the FDA last month voted nine to three in favor of granting approval. However, even those who voted positively raised questions regarding the clinical significance of Onpattro's effect.

Raymond James analyst Gary Nachman noted that, during the late September meeting, there was a consensus view among the advisors that the observed benefit in the study was minimal, and the level of clinical meaningfulness remained uncertain. In light of this, Nachman rates Alnylam stock at Outperform with a price target of $208.

Alnylam Disappointed Over FDA's Rejection of Drug Approval

Alnylam, the leading biopharmaceutical company, expressed surprise over the FDA's rejection of its drug, Onpattro, for the treatment of cardiomyopathy of ATTR. During an investor call, Alnylam CEO Yvonne Greenstreet stated that the advisory committee had actually voted in favor of approving the drug. The misalignment between the committee's decision and the FDA's verdict was a disappointment for the company.

However, Alnylam remains determined and has announced that it will focus its efforts on testing two other medications for the same indication. One of these drugs, vutrisiran, is currently undergoing Phase 3 clinical trials. This drug has already obtained approval under the name Avuttra for the treatment of polyneuropathy.

Although the FDA generally follows the recommendations of its advisory committees, it is not obligated to do so. Analysts have noted that the FDA seemed to be grappling with the data supporting Onpattro for its new indication. It remains uncertain whether the FDA will ultimately approve Onpattro, but if it does, it is likely to grant a limited indication based on the risk/benefit assessment.

Alnylam's upcoming focus is on the outcome of the vutrisiran trial for cardiomyopathy of ATTR, expected to be released in the first half of next year. Analyst Salveen Richter from Goldman Sachs considers this trial to be a significant factor in determining the company's long-term value. Success in this trial could potentially offset the setback caused by the FDA's rejection.

In conclusion, despite Alnylam's disappointment, the company remains resilient and is dedicated to pursuing alternative options for the treatment of cardiomyopathy of ATTR. With the upcoming trial results of vutrisiran holding great promise, Alnylam's prospects continue to be optimistic.

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