Alnylam Pharmaceuticals, Inc. Q2 2026 Earnings Call

Thank you for standing by. My name is Sara and I will be your conference operator today At this time, I would like to welcome everyone to the Alnylam Pharmaceuticals Q2 Earnings Conference call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session. And if you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the conference over to the company. You may begin.

Good morning. I'm Josh Brodsky, vice president of investor relations at An Island. With me today are Yvonne Greenstreet, chief executive officer. Jeff Poulton, chief financial officer, Tolga Tanguler chief commercial officer and Pushkal Garg Chief Research and Development Officer. For those of you participating via conference call, the accompanying slides can be accessed by going to the events section of the investors page of our website, investors dot alnylam.com/events. During today's call. As outlined on slide two. Yvonne will offer introductory remarks and provide some general context. Jeff will review our financials and guidance Tolga will provide an update on our global commercial progress, and Pushkal will discuss our TTR franchise. Our confidence in Triton's CM and upcoming pipeline milestones. Before we open the call for your questions. I would like to remind you that this call will contain remarks concerning our future expectations, plans, and prospects which constitute forward looking statements for the purposes of the safe harbor provision Actual results may differ materially from those indicated by these forward looking statements. As a result of various important risks and uncertainties, including those discussed under the heading Risk Factors. In our most recent periodic report available on our website and on file with the SEC.

We disclaim any obligation to update such statements. And with that, I'll now turn the call over to Yvonne Yvonne. Thanks, Josh.

And thank you, everyone for joining the call today. During the. Second quarter, we demonstrated strong performance across all aspects of the business. Notably, it marked the first time Amvuttra revenues exceeded $1 billion in a single quarter, representing an annual run rate of more than $4 billion. Just 15 months into the attr cardiomyopathy launch, a testament to both the commercial opportunity and our execution. As we reflect on the launch. Several insights reinforce our confidence in the durability of our growth over the years ahead. First, this has been an impressive launch by industry benchmarks. When looking across market share, access, and revenue generation. Second. The fundamentals of our TTR business are strong, and they include compelling clinical profile and label. The strong access that we established at launch, which continues to improve, and our robust and expanding provider network. Third. Patient demand for Amvuttra continues to grow robustly, particularly in the first line setting, which has been our focus as we aspire to market leadership. Given Amvuttra clinical differentiation and desirability as a foundational therapy for newly diagnosed patients, Tolga will discuss how we are now further investing in broadening our future prescriber base and supporting overall category growth.

The latter of which has been accelerating. Finally, our geographic expansion strategy continues to gain momentum. And today we are pleased to announce our collaboration with B1, through which they will have exclusive commercialization and distribution rights for Amvuttra in mainland China and Macau, subject to Amvuttra receiving, marketing authorization Together with B1, we aim to help advance awareness and support diagnosis of attr amyloidosis and, if approved, bring the strength of TTR silencing with Amvuttra to patients in these underserved regions. As Jeff will describe shortly, we are lowering our 2026 revenue guidance today to reflect a better understanding with hindsight of the first few quarters of our U.S. launch Specifically, that early second line demand growth in 2025. Benefited significantly from pent up demand for a new therapy that has since normalized with. That learning and our strong 2026 second quarter performance. Our confidence in Amvuttra growth trajectory has never been stronger. First. Line. New patient starts and now responsible for about 80% of category growth in this accelerating market, and we believe we're making great progress in establishing an Vitra as a foundational therapy. I will now turn to recent developments in the competitive landscape, specifically the negative outcome of the cardio transform study of Eplontersen.

We recognize investor interest in understanding any potential implications of that study's failure for our probability of success, and Triton CM, our phase three. Cardiovascular outcomes trial of an increased. Let me be clear this outcome does not alter our conviction in the Triton CMN study, and as Pushkal was sharing greater detail, our strong confidence is grounded in the established clinical evidence for RNA therapeutics in TTR and the track record of our clinical organization. At the same time, we have a variety of options that our disposal to potentially adapt the study and position it for optimal success. We will carefully review the full Eplontersen data set when it becomes available, and adapt our study plan if appropriate. We have successfully navigated complex TTR development before and believe we are exceptionally well positioned to do so again with. Additionally, in the quarter, we were pleased to announce a series of strategic AI collaborations across the enterprise, including with Inceptive to expand the next frontier in the discovery of RNAi Therapeutics and a collaboration. We are pleased to announce today with a large healthcare system in California aimed at supporting early identification of attr cardiomyopathy in routine care. This build.

On our previously announced partnerships with Vici and Komodo Health. Altogether, this cohesive AI strategy from Discovery and Evidence generation to disease identification, clinical practice and commercial execution reflects our long term conviction that AI will fundamentally reshape how medicines are discovered, developed and ultimately delivered to patients. Finally, we also continue to progress our deep pipeline of investigational medicines, initiating a phase two trial of Arn 6400 in von Willebrand's disease and a phase two trial of my valsartan in down syndrome associated Alzheimer's disease. And we look forward to a series of clinical data readouts in the back half of this year, including presentation of initial phase one results of Arn. HTT02. In patients with Huntington's disease at H. In October. All of this progress builds on momentum towards accelerating innovation and scaling our impact as we look to deliver on our five year vision. Our in 2030 and our strategy is anchored around three pillars. The first pillar is to establish global leadership in TTR while continuing to build a doable franchise. The momentum we have built on attr cardiomyopathy to date, along with recent developments in the competitive landscape, including the cardio transformed phase three topline results and the delay in expected US generic entry for deformities until mid 2031.

Further reinforce the strength of our position and the significant opportunity ahead to establish an ultra as a foundational therapy and realize our TTR leadership ambitions. The. Second pillar is growing through sustainable innovation, where we aim to deliver therapies that not only slow the progression of disease, but prevent, halt or reverse it, and the third pillar is scaling with discipline and agility to enable durable, profitable growth. Alnylam 2030 represents our commitment to becoming the leading science driven, fully integrated, global biopharmaceutical company and to maximize the full potential of RNA therapeutics for patients. With that, let me now turn the call over to Jeff for a review of our second quarter financial results and 2026 guidance. Jeff.

Thanks, Yvonne, and good morning, everyone. This morning, I'll be presenting a summary of second quarter 2020 financial results. In discussing updates to our full year guidance. Let's begin. With the summary of our results for the second quarter Total global. Net product revenues were approximately 1.2 billion, representing 74% growth versus Q2 last year, driven by the continued uptake of in vitro and attr cardiomyopathy The second quarter of 2026 marks the first time we achieved more than 1 billion of TTR revenue. These results reflect a substantial improvement in quarter on quarter growth compared with growth in Q1 this year. Consistent with the phasing expectations we discussed on our year end and Q1 earnings calls earlier this year, Vogel will share more details on our TTR performance in the quarter. In Q2. Collaboration revenue was 47 million or a 23% decrease compared with the same period last year due to lower revenue recognized from our Regeneron collaboration, partially offset by increased revenue from our Roche collaboration driven by higher reimbursable development activities related to the zenith phase three clinical trial of Zombie Serum for. Royalty revenue for the second quarter increased 79% to 72 million, driven by higher leqvio sales by Novartis.

Gross. Margin on product sales was 75%, or 4%, lower than Q2 last year. The decrease in margin was primarily driven by increased royalties on in. As higher revenues in 2026 resulted in an increase in the average royalty rate payable to Sanofi. Our non-GAAP R&D expenses of $377 million increased 38% compared to last year, primarily driven by costs associated with our three ongoing phase three clinical studies, including the zenith phase three. Cardiovascular Outcomes Trial for Zollverein and. The Triton CM and MN studies for an increase in. Beyond the pivotal studies, we also continue to increase investment to support important programs for bleeding disorders. Huntington's disease, and CAA. non-GAAP. G&A expenses of 297 million increased 14% compared to last year, driven primarily by investments in support of the in vitro. Attr cardiomyopathy launch in the US and in key international markets. We achieved. non-GAAP operating income of $318 million, more than triple the amount we achieved last year, driven primarily by the strong top line results that have previously highlighted Finally, we ended the second quarter with cash, cash equivalents and marketable securities of $3.3 billion, compared with 2.9 billion as of year end 2025. The primary driver of the increase in cash.

Year to date is our strong operating performance. Now, turning to our full year 2026 guidance. As Yvonne noted, we are revising our total net product revenue guidance to 4.7 to 5.1 billion, driven fully by an update of our TTR revenue guidance to 4.2 to 4.5 billion, representing a $200 million reduction from our original TTR guidance at the midpoint and still reflects a robust 75% growth year over year. Guiding the. Markets expectations appropriately is important, and we didn't get it right with our original guidance. We own that revised guidance we are sharing today reflects a better understanding of the evolution of second line demand. As our launches progressed. Let me provide some additional color on the basis for this revision. Overall, the Amvuttra cardiomyopathy launch continues to perform ahead of analogs and importantly, we are pleased with uptake in the first line portion of the market, which has been and remains the primary focus of our commercial efforts. Given the importance of this segment to driving long term growth when in vitro was launched in April 2025, the compelling Helios B data and our team's success in establishing access enabled physicians to rapidly transition existing patients who are progressing on stabilizers onto Amvuttra. As a result, second line demand volumes remain consistently robust throughout 2025, which informed our original 2026 guidance.

However, as the launch progressed into 2026 and with the benefit of hindsight, it is now clear that a greater than understood proportion of early second line volume growth was driven by pent up demand from patients who were waiting for a new treatment option Consistent with the trend we highlighted in our Q1 2026 earnings call, growth in second line volumes began to moderate in early 2026 to what we now recognize as a normalized level This normalization of second line demand is the driver of the $200 million reduction in TTR guidance that we are announcing today. Will share more perspective in just a few moments on our confidence in future TTR growth, which is grounded in three key elements. The strength of our current market fundamentals. Positive impact we expect from new investments we're making based on early launch learnings. And lastly, the favorable competitive developments that Yvonne mentioned in her opening remarks. Now. Back to updating our guidance. We are also updating our guidance for collaboration and royalty revenues to a revised range of 575 to 625 million, representing a $150 million increase at the midpoint of the range, driven primarily by strong performance of Leqvio and the resulting royalties from Novartis, as well as higher cost reimbursement from Roche.

Favorably impacting collaboration revenue driven by the pace of enrollment in our Zenith Phase three study with will be remainder of our non-GAAP financial guidance remains unchanged. Let me now turn it over to Tolga to provide more color on our commercial performance in the second quarter. Tolga.

Thanks, Jeff, and good morning. I'm pleased to share our continued progress in bringing online therapies to patients globally. Amata is delivering a category defining attr attr CM. Launch and is on track toward delivering on our Alnylam 2030 ambitions. As you. Yvonne and Jeff mentioned, we have gained valuable insights as the launch has progressed. These learnings have sharpened our understanding of demand dynamics. While also reinforcing our confidence in the fundamental drivers of sustainable growth. Overall, we remain highly confident in our path to achieving TTR leadership. The momentum of the business, coupled with an increasingly favorable competitive landscape, reinforce our conviction in achieving our long term ambitions. Due to marked another quarter of strong commercial execution and growth Specifically, we delivered $1.17 billion in combined net product revenues, up 74% year over year, and 13% over Q1 2026. In just five quarters since our CM launch, we have generated over $4 billion in total revenue, reflecting both a strong base and a clear growth trajectory. Our rare disease portfolio also continues to deliver meaningful impact for patients and consistent performance for our business. In Q2, we generated $142 million in rare disease net revenue, up 11% year over year. Turning to our TTR franchise.

Global TTR net revenues reached $1.03 billion in the second quarter, increasing 13% versus Q1, and 89% year over year. Reflecting the continued strength of the launch and the robust execution of our global teams. In the US, TTR revenues increased 15% versus Q1 and 114% year over year, reflecting robust underlying demand with reported revenue partially held back by changes in inventory days on hand during Q2. Access remained broad, pull through was strong, and adherence continued to exceed 90%. Outside the US TTR revenues increased 7% versus Q1 and 31% year over year Continued attr CM uptake in Japan, the UK and Germany. Along with strong Paul neuropathy performance across our international markets. Drove Q2 growth despite. Facing headwinds related to ongoing CM launches in several countries. Double clicking on our Q2 TTR performance in the US. Underlying demand was exceptionally strong, increasing by $129 million in the quarter. More than doubling the demand growth. Achieving Q1 a portion. Of that, demand was offset by inventory dynamics, which reduced reported growth by $21 million and to a lesser extent by the continued and anticipated modest reduction in net price. As a reminder, our Q1, USA CTR growth was more modest and was impacted by several seasonal phasing dynamics, and we are therefore pleased by the robust reacceleration in demand in Q2 and the continuing strength of the business.

On Ultra's differentiated clinical profile underpins our confidence in the long term growth opportunity We believe that our Mutra stands apart as a first line choice on attributes that matter to physicians and patients It is the first and only product approved in the US for both attr CM and hereditary attr PM It works upstream at the source. Delivering rapid, deep and sustained knockdown of the disease causing protein. In the pivotal Helios study. I met ten out of ten endpoints and demonstrated robust treatment effects in the primary endpoint of all cause mortality and recurring CV events, and secondary endpoints of functional capacity and health related quality of life. Across. All of these endpoints. Consistent treatment effects with or without background stabilizers were observed combined with the. Convenience of. Once quarterly healthcare provided. Administration and real world data that suggests greater than 90% adherence. We believe our Mutra is uniquely positioned to address the needs of the growing attr CM patient population. The first five. Quarters of launch have provided valuable insights that are informing where we increase investment and how we position the business for its next phase of growth. During the initial quarters, following approval. Many of our high volume early adopters transitioned a substantial number of stabilizer treated, progressing patients to Anutra.

While those transitions continue. We are now seeing that portion of demand volume growth. Normalized toward a more sustainable underlying rate, and we continue to. Capture leadership share of second line starts. Today. Approximately 80% of new treatment initiations are first line starts establishing a mutra as first line treatment choice has been a priority since launch, and we continue to strengthen our competitive position What's more, while our strategy has never depended on competitors outcomes. Two favorable developments in the external landscape have cleared a path for us to be even more competitive. In the first line setting. First. We now anticipate tafamidis us loss of exclusivity in 2031. I would. Is already challenging the seven year incumbent for leadership share of new patient starts, and we see a significant opportunity to continue strengthening that position years ahead of January of the stabilizer class Second, based on the cardio Transform study, top line results, we now anticipate one fewer branded attr attr CM competitor in both the first line and stabilizer, progressive segments. Finally. Category growth continues to accelerate, and our competitive first line share, coupled with this clear competitive path to greater first line penetration, aligns well with where we see the largest opportunity with an estimated 80% of patients still untreated and additional physicians and health systems initiating treatment of attr CM.

We expect the robust growth in first line starts to continue. And we're helping to drive that category growth. More specifically, we're accelerating our investments in diagnosis, enabling initiatives, investments to identify patients earlier to expand the treatable population and ultimately to improve patient outcomes. Taken together, these insights provide great confidence in our ability to expand leadership across both attr CM and hereditary attr and deliver on our 2030 ambitions of TTR leadership and a 25% revenue kegger during the period. As we. Share. Today, our differentiated profile has translated into exceptional launch momentum and that experience has sharpened our understanding of what will drive the next phase of growth. First, after five quarters in the market, our Ultra's compelling profile and our focused efforts have driven broad coverage and efficient patient access. With no meaningful reimbursement headwinds. We believe this strong access foundation will continue to support physician confidence and patient adoption as we expand it. Franchise. Second, we continue to deepen adoption among physicians who have already incorporated Amvuttra into. Their practice. Among prescribers, using our. It. Now represents more than 50% of new patient starts under. Underscoring the strong physician preference that develops with experience. And from a Trcm launch through the end of Q2, we have added over 1700 new prescribers.

Third, and perhaps most importantly, we have significant opportunity to expand the breadth of prescribers who have experience with albuterol, which we estimated about a third of the growing pool of TTR prescribers. While we know, we know that experience drives preference, there are many more physicians, including many who are new to the category who have not yet prescribed. To capture that opportunity. We are intensifying our focus and increasing our investment in customer facing activities to expand the breadth of prescribing. We are already seeing early progress from these efforts with accelerated growth in new prescribers. During the second quarter. We believe we are in the early stages of that expansion opportunity. While we're still in the while we're while we're still early in the commercialization journey, we believe our is well positioned to capture the significant opportunity ahead as we bring this differentiated therapy to more patients living with attr CM With that, I will now turn it over to Pushkal Thank you. Tolga, and good morning everyone. As Tolga just highlighted, we believe in vitro has a remarkable clinical profile that supports it being the first line treatment of choice for patients with attr cardiomyopathy. These key attributes are highlighted here with data from the landmark Helios study First and foremost, we've seen substantial benefits with regard to improving clinical outcomes.

Both all cause mortality and cardiovascular events, with reductions of nearly 40% over 48 months. Across these two endpoints. Second, the treatment effects are largest when we intervene early. You can see that in the forest plot on the bottom left, where patients with lower BNP, greater walking ability and younger age have had even greater reductions in the composite endpoint of 47%, 42% and 45%, respectively. And importantly, in data recently presented at ESC, heart failure and shown on the lower right quadrant, we see that the treatment effect is preserved irrespective of background medications, including TTR stabilizers. These attributes, along with the quarterly dosing that supports adherence, in our view, represents an ideal profile for first line agent for patients with attr cardiomyopathy. Now, the strength of these Helios B results, along with our many learnings from our deep experience in TTR amyloidosis, provide us with staunch conviction in the value of our next generation investigational RNA, TTR silencer, which we believe has the potential for even greater improved efficacy by a greater knockdown over 95%, with just two doses per year As you're aware, we continue to advance the question in the Triton Phase three program. Triton CM is a randomized, double blind, event driven outcome study of new versus placebo.

We announced last quarter that we utilized a pre-specified option in our protocol to expand enrollment by about by approximately 500 patients to 1715. Total, further mitigating the potential risk of low event rates while maintaining or potentially even accelerating timelines for this important study. Now, given recent competitor data and given that many patients in Triton CM will be on a background stabilizer, we understand that there have been many questions raised about the feasibility of delivering positive results from this clinical trial. While we still have more to learn about the Eplontersen results, we believe they are likely attributable to a combination of molecule and study specific issues. And as we compare what we know about Nicosan with what's been. Reported about Eplontersen, I want to assure you that we remain highly confident in decreasing and. Triton CM I'll explain more in a moment. But first let me share what what we'll be looking for in the upcoming data presentations of the Cardio transform results. At ESC. To better understand the reasons why the study did not meet. Its primary endpoint. First, we'll be interested to learn more about the population and baseline characteristics of the cardio Transform study, particularly in the two key subgroups of monotherapy and the patients on background stabilizers.

As I noted in Helios B, we saw that treatment effects within Vutara were greatest in early patients, and so a drug signal may be obscured if many advanced patients were enrolled. We already know from published data that the cardio transform study enrolled 17%, in which a class three patients. Nearly double that in Helios B, patients with higher NAC stage and patients with higher B and PS. Importantly, as I'll. Further, in a moment, we believe deep, rapid knockdown of TTR is critical to improving outcomes in ATR cardiomyopathy. Graphs in the primary manuscript for the study. It