Here's Why Alnylam Pharmaceuticals Rallied 32.7% in September

Markets Motley Fool

What happened

Continue Reading Below

Powered by encouraging phase 3 results for an important pipeline drug, shares of clinical-stage biotech Alnlyam Pharmaceuticals (NASDAQ: ALNY) , which focuses on RNAi treatments, gained 33% in September, according to data from S&P Global Market Intelligence

So what

While September turned out to a great month to be a shareholder, Alnylam actually kicked it off with some bummer news. Management announced it was halting all clinical development on Fitusiran -- a  treatment candidate for the blood-clotting disorder hemophilia -- after a patient died during one of its trials. That was an especially troubling update because less than a year ago, Alnylam abandoned its former lead drug candidate, revusiran, over safety concerns.

Traders were able to shrug off that bad news within a few days, after Alnylam and its partner Sanofi (NYSE: SNY) released phase 3 clinical data on a drug called patisiran, which is a hopeful treatment for hereditary ATTR amyloidosis (hATTR) with polyneuropathy. A rare disease, hATTR affects about 50,000 people worldwide, and currently has limited treatment options.  

While the release was light on details, Alnylam did state that the 18-month study showed that patisiran met its primary endpoint with strong safety data. The two companies now plan to submit patisiran for FDA approval in late 2017, with international filings expected to follow in the first half of 2018.

Continue Reading Below

This news was especially positive for shareholders because it shows that Alnylam's RNAi drug-development platform is the real deal. Given the big confidence boost, it is easy to understand why shares skyrocketed. 

Now what

While patisiran looks promising, it is important for investors to realize that the drug won't likely enjoy monopoly status when it launches. Ionis Pharmaceuticals (NASDAQ: IONS) -- another biotech focused on RNAi drug development -- has a drug called inotersen that will be submitted for FDA approval later this year as a hopeful treatment for the same disease state. While patisiran's safety data is expected to give it an edge over inotersen, it would be a mistake to ignore the potential competition completely.

Rival treatments aside, if patisiran wins approval, it will still likely bring in hundreds of millions of dollars in revenue per year. Add in the potential of the rest of the company's pipeline, and there's reason to expect that this stock's bullish moves are just getting started.

10 stocks we like better than Alnylam Pharmaceuticals
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Alnylam Pharmaceuticals wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of September 5, 2017

Brian Feroldi owns shares of Ionis Pharmaceuticals. The Motley Fool owns shares of and recommends Alnylam Pharmaceuticals and Ionis Pharmaceuticals. The Motley Fool has a disclosure policy.