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What Do Alnylam’s Valuations Indicate?

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Bottom line

Alnylam Pharmaceuticals’ (ALNY) interest income grew from $2.1 million in Q1 2017 to $5.8 million in Q1 2018. While the company had incurred other expenses of $2.9 million in Q1 2017, it earned $335,000 in other income in Q1 2018.

The net loss incurred by Alnylam Pharmaceuticals increased from $107.3 million in Q1 2017 to $141.2 million in Q1 2018, which translated into a net loss per share of $1.41 in Q1 2018 compared with a net loss per share of $1.25 in Q1 2017. During this period, the outstanding shares of the company rose from ~86 million in Q1 2017 to 100 million in Q1 2018.

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Equity dilution

Alnylam Pharmaceuticals (ALNY) sold 5 million shares of its common stock through an underwritten public offering at $71.9 per share. Through this offering, the company raised net proceeds of $355.2 million. Further, in November 2017, Alnylam sold 6.4 million common shares through a public offering at a price of $125 per share. Through this offering, Alnylam raised net proceeds of $784.5 million.

In the May 2017 offering, Sanofi Genzyme purchased ~300,000 shares of Alnylam, which took the stake held by Sanofi Genzyme in Alnylam Pharmaceuticals to 11%.

Valuation metrics

The enterprise value of Alnylam Pharmaceuticals is $7.9 billion, and its enterprise-value-to-revenue ratio is 88x. The price-to-sales ratio of the company is 113.6x, and its price-to-book ratio is 5.7x. The debt-to-equity ratio of the company is 1.7x. The company’s current ratio, a measure of how effectively a company can meet its short-term obligations, stands at 14.6x. In comparison, the current ratios of Alnylam’s peers Ionis Pharmaceuticals (IONS), Regeneron Pharmaceuticals (REGN), and Amgen (AMGN) stand at 5.40x, 3.60x, and 3.90x, respectively, which shows that Alnylam Pharmaceuticals is better positioned to meet its short-term obligations as compared to its peers.

In the next part of the series, we’ll take a look at the valuations and the price performance and cash flows of Alnylam Pharmaceuticals.

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