Alnylam shares soar on narrower 1Q loss, surge in revenue

CAMBRIDGE, Mass. - Alnylam Pharmaceuticals Inc. rose Friday after the biotechnology company posted a smaller-than-expected first-quarter loss and strong revenue growth.

Shares of Alnylam surged $2.39, or 9 percent, to $27.75 in afternoon trading.

The company lost $1.2 million, or 3 cents per share, compared with a loss of $21.6 million, or 58 cents, in the year-ago period. Revenue tripled to $22.2 million from $7.2 million in the prior year.

The results handily beat estimates of analysts polled by Thomson Financial, who expected a loss of 14 cents on revenue of $19.3 million.

Alnylam said its strong first-quarter results were due primarily to the company's partnership with Roche, which began in the third quarter of 2007 and gave the Swiss drug maker access to Alnylam's gene-silencing technology. Alnylam said it received $13.4 million in collaboration revenue during the quarter as part of the alliance.

The company also has partnerships with Novartis, Biogen Idec and the National Institutes of Health.

Rodman & Renshaw analyst Michael G. King, who rates Alnylam "Market Outperform" with a $37 price target, said he expects the company to form another collaboration this year in the arena of RNAi therapeutics — also known as gene-silencing technology.

"In our view, a major partnership with a pharmaceutical company could be a key catalyst for the stock, as significant investor sentiment exists that the company has little in the way of assets to partner," he said in a note to clients.

Cantor Fitzgerald analyst Pamela Bassett also sees Alnylam signing another major deal this year, given increased demand from pharmaceutical companies for Alnylam's RNA interference technology.

"We believe the current pharma environment — stepped-up demand for innovation, in particular, access to intra-cellular targets and condensed development timelines — favors Alnylam's licensing and collaboration focus and will continue to drive demand for Alnylam's RNAi technology," Bassett said.

She has a "Buy" rating and $37 price target on Alnylam shares.

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