Analysts Weigh in on Volatile Biotech Stocks: Alnylam Pharmaceuticals, Inc. (ALNY) and Aurinia Pharmaceuticals (AUPH)

Analysts offer insights into a volatile biotech-verse amid Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) shares dipping on news of a program termination and Aurinia Pharmaceuticals (NASDAQ:AUPH) soaring on back of encouraging pipeline trial results. Whereas Needham urges investors to remain bullish on AUPH despite the hurdle, Canaccord has every reason to remain positive on AUPH.

Alnylam Pharmaceuticals, Inc. 

Alnylam shares are crashing almost 48% today on back of last night’s news that the biotech firm’s revusiran program has been terminated. The program evaluated investigational RNAi therapeutics targeting transthyretin (TTR) for the treatment of hereditary TTR-mediated amyloidosis (hATTR amyloidosis), a life-threatening disease caused by misfolded transthyretin (TTR) proteins that accumulate as amyloid fibrils in multiple organs, but specifically in the peripheral nerves and heart.

An ad hoc review of unblinded Phase 3 ENDEAVOR trial data resulted in the Data Monitoring Committee (DMC) concluding that the benefits of the trial did not outweigh the risk factors when considering an imbalance in deaths. Subsequently, the DMC determined they could not justify continuing the trial.

In reaction, Needham analyst Alan Carr “recommend[s] investors with a long-term view take advantage of weakness” and therefore reiterates a Buy rating on shares of ALNY while lowering the price target from $152 to $137.

As Carr views the termination, certainly the end of the revusiran program raises questions for the analyst when exploring the RNAi efficacy in familial amyloidotic cardiomyopathy (FAC). “Although TTR knockdown is evident, data from Phase 2 OLE trial provided no evidence of clinical benefit at 1 yr assessment in Jul 2016. Efficacy data from the terminated Phase 3 FAC trial and from cardiomyopathy pts in patisiran Phase 3 FAP trial may provide some answers. Both revusiran and patisiran target TTR,” the analyst adds.

Carr asserts, “Based on available information, our bias is that the matter is limited to revusiran and we do not believe overall potential of the RNAi platform is meaningfully impacted. We have removed revusiran and associated revenues from our models.”

Despite the termination, the analyst still recognizes value in the firm’s RNAi platform, with a continuing patisiran Phase 3 APOLLO tiral in familial amyloidotic polyneuropathy (FAP) and a top-line data read-out anticipated by the middle of 2017.

“Phase 2 OLE data are consistent w/ an active drug and we expect a positive outcome on neuropathy endpoints,” Carr concludes.

Additionally, the firm closed its second-quarter of 2016 with $1.28 billion in cash and has guided to reach over $1.0 billion in revenue by the year’s end.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, five-star analyst Alan Carr is ranked #142 out of 4,190 analysts. Carr has a 51% success rate and yields 14.1% in his annual returns. When recommending ALNY, Carr earns 12.7% in average profits on the stock.

TipRanks analytics exhibit ALNY as a Strong Buy. Based on 13 analysts polled in the last 3 months, 10 rate a Buy on ALNY, while 3 maintain a Hold. The 12-month price target stands at $97.36, marking a nearly 174% upside from where the shares last closed.

Aurinia Pharmaceuticals

Canaccord analyst John Newman remains positive on Aurinia on back of the firm’s release of 24-week AURION data that in the analyst’s opinion further bolsters AURA-LV data. The results reveal AUPH pipeline drug voclosporin, a drug which is being evaluated for its ability to treat active lupus nephritis, had a positive 70% Complete Response rate at 24 weeks in n=10 patients, with 8 out of 10 indicating an overall response. In reaction, shares are climbing 27% today.

Seeing voclosporin as both clinically active and safe, the analyst reiterates a Buy rating on AUPH with a price target of $10, which represents a 98% increase from where the shares last closed.

On an interesting note, Newman underscores that “100% of the n=10 patients in AURION were from centers in Mayalsia, suggesting good baseline healthcare can have a strong positive effect on outcomes.”

Ultimately, “We believe that the death imbalance seen in the Phase 2b AURA-LV study was due to enrollment in geographies with poor access to baseline healthcare, and thus much sicker patients. However, we believe chances of success in Phase 3 are favorable, assuming problematic Asian geographies are excluded,” Newman concludes.

Moving forward, the analyst anticipates 48-week data for AURION coupled with more information on a prospective Phase 3 design once AUPH meets with the FDA to discuss its AUR-LV trial results.

As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, analyst John Newman is ranked #4,071 out of 4,193 analysts. Newman has a 35% success rate and faces a loss of 11.5% in his yearly returns. However, when recommending AUPH, Newman gains 15.3% in average profits on the stock.

TipRanks analytics demonstrate AUPH as a Strong Buy. Based on 4 analysts polled in the last 3 months, 100% rate a Buy on AUPH. The consensus price target stands at $9.50, marking a nearly 77% upside from where the stock is currently trading.screen-shot-10-06-16-at-05-16-pm

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