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Item 2. Management’s Discussion and Analysis

2022-04-28 compared with 2021-10-28 · 148 added, 142 removed, 145 unchanged (67% of the section changed)

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By harnessing the RNAi pathway, we have developed a new class of innovative medicines, known as RNAi therapeutics.

RNAi therapeutics are comprised of small interfering RNA, or siRNA, and function upstream of conventional medicines by potently silencing messenger RNA, or mRNA, that encode for disease-causing proteins, thus preventing them from being made.

We believe this is a revolutionary approach with the potential to transform the care of patients with genetic and other diseases.

RNAi therapeutics are comprised of small interfering RNA, or siRNA, and function upstream of conventional medicines by potently silencing messenger RNA, or mRNA, that encode for proteins implicated in the cause or pathway of disease, thus preventing them from being made.

We believe this is a revolutionary approach with the potential to transform the care of patients with rare and prevalent diseases.

To date, our efforts to advance this revolutionary approach have yielded the approval of four first-in-class RNAi-based medicines, ONPATTRO ® (patisiran), GIVLAARI ® (givosiran), OXLUMO ® (lumasiran) and Leqvio ® (inclisiran).

Our research and development strategy is to target genetically validated genes that have been implicated in the cause or pathway of human disease.

We utilize a N-acetylgalactosamine (GalNAc) conjugate or lipid nanoparticle (LNP) approach to enable hepatic delivery of siRNAs.

For delivery to the central nervous system, or CNS, and the eye (ocular delivery), we are utilizing alternative conjugate approaches.

We are also advancing approaches for delivery of siRNAs to lung and other tissue types.

Our focus is on clinical indications where there is a high unmet need, early biomarkers for the assessment of clinical activity in Phase 1 clinical studies, and a definable path for drug development, regulatory approval, patient access and commercialization.

We utilize a N-acetylgalactosamine (GalNAc) conjugate approach or lipid nanoparticle (LNP) to enable hepatic delivery of siRNAs.

For delivery to the central nervous system, or CNS, and the eye (ocular delivery), we are utilizing an alternative conjugate approach based on a hexadecyl (C16) moiety as a lipophilic ligand.

We are also advancing approaches for lung, muscle and adipose tissue delivery of siRNAs.

Our focus is on clinical indications where there is a high unmet need, a genetically validated target, early biomarkers for the assessment of clinical activity in Phase 1 clinical studies, and a definable path for drug development, regulatory approval, patient access and commercialization.

In early 2021, we launched our Alnylam P 5 x25 strategy, which focuses on our planned transition to a top five biotech company, as measured by market capitalization, by the end of 2025.

With Alnylam P 5 x25 , we aim to deliver transformative rare and prevalent disease medicines for patients around the world through sustainable innovation, delivering exceptional financial performance and driving profitability.

On October 28, 2021, we announced a leadership transition pursuant to which our current long-time Chief Executive Officer, John M.

Maraganore, Ph.D., will depart on December 31, 2021, and Yvonne L.

Greenstreet, MBChB, MBA, our current President and Chief Operating Officer, will transition to the role of Chief Executive Officer.

We currently have four marketed products and 12 clinical programs, including six in late-stage development, across four Strategic Therapeutic Areas, or “STArs:” Genetic Medicines;

With Alnylam P 5 x25 , we aim to deliver transformative rare and prevalent disease medicines for patients around the world through sustainable innovation, while delivering exceptional financial performance.

We currently have four marketed products and 13 clinical programs, including five in late-stage development, across four Strategic Therapeutic Areas, or “STArs:” Genetic Medicines;

Cardio-Metabolic Diseases;

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Three of our marketed products are within the Genetic Medicines STAr, ONPATTRO, GIVLAARI and OXLUMO.

ONPATTRO is approved in the United States, or U.S., by the United States Food and Drug Administration, or FDA, for the treatment of the polyneuropathy of hereditary transthyretin-mediated amyloidosis, or hATTR amyloidosis, in adults and has also been approved in the European Union, or EU, for the treatment of hATTR amyloidosis in adult patients with stage 1 or stage 2 polyneuropathy, in Japan for the treatment of transthyretin, or TTR, type familial amyloidosis with polyneuropathy, and in several additional countries, including Brazil.

ONPATTRO is approved by the United States Food and Drug Administration, or FDA, for the treatment of the polyneuropathy of hereditary transthyretin-mediated amyloidosis, or hATTR amyloidosis, in adults and has also been approved in the European Union, or EU, for the treatment of hATTR amyloidosis in adult patients with stage 1 or stage 2 polyneuropathy, in Japan for the treatment of transthyretin, or TTR, type familial amyloidosis with polyneuropathy, and in multiple additional countries, including Brazil.

Regulatory filings in other territories are pending and additional filings are planned for 2022 and beyond.

GIVLAARI is approved in the U.S.

by the FDA for the treatment of adults with acute hepatic porphyria, or AHP, in the EU for the treatment of AHP in adults and adolescents aged 12 years and older, and in several additional countries, including Brazil, Canada and Japan.

We have also filed for regulatory approval for givosiran (the non-branded drug name for GIVLAARI) in Switzerland and additional regulatory filings are pending or planned for 2021 and beyond.

for the treatment of adults with acute hepatic porphyria, or AHP, in the EU for the treatment of AHP in adults and adolescents aged 12 years and older, and in several additional countries, including Brazil, Canada, Switzerland and Japan.

We have also filed for regulatory approval for givosiran (the non-branded drug name for GIVLAARI) in Colombia and additional regulatory filings are pending or planned for 2022 and beyond.

In November 2020, we received regulatory approval for OXLUMO in the U.S.

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In June 2021, we received marketing authorization approval for OXLUMO in Brazil for the treatment of PH1 in both children and adult patients.

In March 2022, we announced that the FDA accepted our supplemental New Drug Application for lumasiran (the non-branded drug name for OXLUMO), for the treatment of advanced PH1.

The FDA has set an action date of October 6, 2022, under the Prescription Drug User Fee Act, or PDUFA.

Regulatory filings in other territories are pending and additional filings are planned for 2022 and beyond.

Our fourth product, Leqvio (inclisiran), is being developed and commercialized by our partner Novartis AG, or Novartis, and in December 2020 received marketing authorization from the European Commission, or EC, for the treatment of adults with hypercholesterolemia or mixed dyslipidemia and is in the Cardio-Metabolic Diseases STAr.

With respect to regulatory review by the FDA of the New Drug Application, or NDA, filed with the FDA for inclisiran, the FDA issued a complete response letter in December 2020, due to unresolved facility inspection-related conditions at a third-party manufacturing facility in Europe.

In July 2021, Novartis announced that the resubmission to the FDA for the inclisiran NDA to address the complete response letter was filed with an action date of January 1, 2022 under the Prescription Drug User Fee Act, or PDUFA.

Novartis listed its own site in Schaftenau, Austria, as the manufacturing location for the final finished product within its NDA resubmission.

Novartis reported that the transfer of the manufacturing location for the final finished product to its Schaftenau site was planned and initiated in 2020, prior to the receipt of the complete response letter.

In addition to our marketed products, we have six late-stage investigational programs, advancing toward potential commercialization.

Our fourth product, Leqvio (inclisiran), is being developed and commercialized by our partner Novartis AG, or Novartis, and has received marketing authorization from the European Commission, or EC, for the treatment of adults with hypercholesterolemia or mixed dyslipidemia and is in the Cardio-Metabolic Diseases STAr.

In December 2021, Leqvio was approved by the FDA as an adjunct to diet and maximally tolerated statin therapy for the treatment of adults with heterozygous familial hypercholesterolemia, or HeFH, or clinical atherosclerotic cardiovascular disease, or ASCVD, who require additional lowering of LDL-C.

As of April 2022, Leqvio has been approved in more than 55 countries.

In addition to our marketed products, we have five late-stage investigational programs advancing toward potential commercialization.

These programs include our wholly owned programs:

givosiran (the non-branded name for GIVLAARI) for the treatment of adolescent patients with AHP;

lumasiran for the treatment of PH1 and recurrent renal stones;

lumasiran for the treatment of advanced PH1 and recurrent renal stones;

patisiran (the non-branded drug name for ONPATTRO) for the treatment of transthyretin amyloidosis, or ATTR amyloidosis, with cardiomyopathy;

and vutrisiran for the treatment of ATTR amyloidosis.

In addition, inclisiran (the non-branded name for Leqvio) for the treatment of hypercholesterolemia and atherosclerotic cardiovascular disease, or ASCVD, is being advanced by

our partner Novartis, and fitusiran for the treatment of hemophilia, is being advanced by our partner Sanofi Genzyme, the specialty care global business unit of Sanofi.

In January 2021, we reported positive topline results from our HELIOS-A Phase 3 study of vutrisiran in patients with hATTR amyloidosis with polyneuropathy, and in April 2021, based on the positive HELIOS-A data, we submitted an NDA for vutrisiran, which was accepted by the FDA.

The FDA has set an action date of April 14, 2022 under the PDUFA, and indicated that they were not currently planning an advisory committee meeting as part of the NDA review.

In September 2021, we presented additional 9-month data from the HELIOS-A Phase 3 study of vutrisiran, and submitted a marketing authorisation application, or MAA, in the EU with the European Medicines Agency, or EMA.

In October 2021, we reported positive topline results for 18-month endpoints and safety from the HELIOS-A Phase 3 study of vutrisiran.

Based on our expertise in RNAi therapeutics and broad intellectual property estate, we have formed alliances with leading pharmaceutical and life sciences companies to support our development and commercialization efforts, including Regeneron Pharmaceuticals, Inc., or Regeneron, Novartis (which acquired our partner The Medicines Company, or MDCO, in 2020), Sanofi Genzyme, Vir Biotechnology, Inc., or Vir, and Dicerna Pharmaceuticals, Inc., or Dicerna.

We have incurred significant losses since we commenced operations in 2002 and expect such losses to continue for the foreseeable future.

As of September 30, 2021, we had an accumulated deficit of $5.18 billion.

Historically, we have generated losses principally from costs associated with the establishment of late-stage clinical and commercial capabilities, including global commercial operations, research and development activities, acquiring, filing and expanding intellectual property rights, and selling, general and administrative costs.

While we believe 2019 was our peak net loss year, and believe the funding provided by our strategic financing collaboration with The Blackstone Group Inc., or Blackstone, should enable us to achieve a self-sustainable financial profile without the need for future equity financing, we expect to continue to incur annual net operating losses for the foreseeable future as we expand our efforts to discover, develop and commercialize RNAi therapeutics.

We also anticipate that our operating results will fluctuate for the foreseeable future.

vutrisiran for the treatment of ATTR amyloidosis and Stargardt Disease;

as well as fitusiran for the treatment of hemophilia, which is being advanced by our partner Genzyme Corporation, a Sanofi Company, or Sanofi, and cemdisiran for the treatment of complement-mediated diseases, which we are advancing as a monotherapy in a Phase 2 study, and our partner Regeneron Pharmaceuticals, Inc., or Regeneron, is advancing in a Phase 3 study of cemdisiran and pozelimab combination in myasthenia gravis.

In further support of our Alnylam P 5 x25 strategy and in view of our evolving risk profile, we remain focused on continued evolution of our global infrastructure, including key objectives such as optimizing our global structure for execution in key

markets, enhancing performance consistent with our values, and continuing to strengthen our culture.

We maintain focus on our global compliance program to drive its evolution and enhancement in view of the Alnylam P 5 x25 strategy.

Building from our global Code of Business Conduct and Ethics, our compliance program is designed to empower our employees and those with whom we work to execute on our strategy consistent with our values and in compliance with applicable laws.

Comprised of components such as risk assessment and monitoring;

policies, procedures, and guidance;

training and communications;

dedicated resources;

and systems and processes supporting activities such as third party relationships and investigations and remediation;

our program and related controls are built to enhance our business processes, structures, and controls across our global operations.

In January 2022, we reported positive full results for 18-month secondary endpoints and updated safety data from the HELIOS-A Phase 3 study of vutrisiran in patients with hATTR amyloidosis with polyneuropathy.

Vutrisiran met all 18-month secondary endpoints, including statistically significant improvements in neuropathy impairment, quality of life, gait speed, nutritional status and overall disability, relative to external placebo data from the APOLLO Phase 3 study of patisiran.

Additionally, vutrisiran continued to demonstrate an encouraging safety and tolerability profile.

Previously, in January 2021, we reported positive topline results from our HELIOS-A Phase 3 study of vutrisiran, and in April 2021, based on the positive HELIOS-A data, we submitted an NDA for vutrisiran, which was accepted by the FDA.

The FDA initially set an action date of April 14, 2022 under PDUFA.

In April 2022, we announced that the FDA extended the review timeline of the NDA for vutrisiran to allow for review of newly added information related to a new secondary packaging and labeling facility.

The updated PDUFA goal date to allow for this review is July 14, 2022.

No additional clinical data have been requested by the FDA.

Vutrisiran is also under review by the European Medicines Agency, or EMA, the Brazilian Health Regulatory Agency and the Japanese Pharmaceuticals and Medical Devices Agency, or PMDA.

Based on our expertise in RNAi therapeutics and broad intellectual property estate, we have formed alliances with leading pharmaceutical and life sciences companies to support our development and commercialization efforts, including Regeneron, Novartis (which acquired our partner The Medicines Company, or MDCO, in 2020), Sanofi, Vir Biotechnology, Inc., or Vir, Dicerna Pharmaceuticals, Inc.

(acquired by Novo Nordisk A/S, or Novo Nordisk, in December 2021), or Dicerna, and PeptiDream, Inc., or PeptiDream.

We have incurred significant losses since we commenced operations in 2002 and as of March 31, 2022, we had an accumulated deficit of $5.68 billion.

Historically, we have generated losses principally from costs associated with research and development activities, acquiring, filing and expanding intellectual property rights, and selling, general and administrative costs.

As a result of planned expenditures for research and development activities relating to our research platform, our drug development programs, including clinical trial and manufacturing costs, the establishment of late-stage clinical and commercial capabilities, including global commercial operations, continued management and growth of our patent portfolio, collaborations and general corporate activities, we expect to incur additional operating losses, however we expect 2019 represents our peak net loss year as we transition towards a self-sustainable financial profile.

We anticipate that our operating results will continue to fluctuate for the foreseeable future.

Therefore, period-to-period comparisons should not be relied upon as predictive of the results in future periods.

We currently have programs focused on a number of therapeutic areas and as of September 30, 2021, we are generating net revenue from product sales for three marketed products, ONPATTRO, GIVLAARI and OXLUMO.

We currently have programs focused on a number of therapeutic areas and, as of March 31, 2022, we generate worldwide product revenues from three commercialized products, ONPATTRO, GIVLAARI and OXLUMO, primarily in the U.S., Europe and Japan.

However, our ongoing development efforts may not be successful and we may not be able to commence sales of any other products and/or successfully market and sell ONPATTRO, GIVLAARI, OXLUMO or any other approved products in the future.

A substantial portion of our total revenues in recent years has been derived from collaboration revenues from strategic alliances with Regeneron, Novartis and Vir.

In addition to revenues from the commercial sales of ONPATTRO, GIVLAARI, OXLUMO and potentially from sales of future products, including vutrisiran, we expect our sources of potential funding for the next several years to continue to be derived in part from existing and new strategic alliances, which may include license and other fees, funded research and development, milestone payments and royalties on product sales by our licensees, as well as funding due or available to us under our strategic financing collaboration with Blackstone.

A portion of our total revenues in recent years has been derived from collaboration revenues from strategic alliances with Regeneron, Vir and Novartis.

In addition to revenues from the commercial sales of our approved products and potentially from sales of future products, we expect our sources of potential funding for the next several years to continue to be derived in part from existing and new strategic alliances.

Such alliances include, or may include in the future, license and other fees, funded research and development, milestone payments and royalties on product sales by our licensors, including royalties on sales of Leqvio made by our partner Novartis, as well as proceeds from the sale of equity or debt.

The COVID-19 Pandemic

In March 2020, the World Health Organization declared the outbreak of a novel strain of coronavirus, or COVID-19, as a pandemic, which continues to spread throughout the U.S.

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic.

More recently, other, more infectious, variants of COVID-19 have been identified, which continue to spread throughout the U.S.

and worldwide.

More recently, other, potentially more infectious, variants of COVID-19 have been identified.

We could be materially and adversely affected by the risks, or the public perception of the risks, related to an epidemic, pandemic, outbreak, or other public health crisis, such as the current COVID-19 pandemic.

Since the onset of the global pandemic in 2020 and throughout 2021, we have been closely monitoring the spread of COVID-19 and its variants, and plan to continue taking steps to identify and mitigate the adverse impacts on, and risks to, our business posed by its spread and actions taken by governmental and health authorities to address the COVID-19 pandemic.

Since the onset of the global pandemic in 2020, we have been closely monitoring the spread of COVID-19 and its variants, and plan to continue taking steps to identify and mitigate the adverse impacts on, and risks to, our business posed by its spread and actions taken by governmental and health authorities to address the COVID-19 pandemic.

The spread of COVID-19 caused us to modify our business practices, including implementing a temporary global work from home policy in March 2020 for all employees who were able to perform their duties remotely and temporarily restricting all nonessential business travel, and we expect to continue to take actions as may be required or recommended by government authorities or as we determine are in the best interests of our employees, the patients we serve and other business partners in light of COVID-19 and variants thereof.

Where and to the extent permitted to be open under local regulations, our office sites are operational with appropriate safety precautions based on COVID-19 infection rates, vaccination rates and local guidance, and in October 2021, we formally re-opened our offices in the U.S., following openings in other territories, to those employees who have been fully vaccinated.

Where and to the extent permitted to be open under local regulations, our office sites are operational with appropriate safety precautions based on vaccination rates and local

guidance, and in October 2021, we formally re-opened our offices in the U.S., following openings in other territories, to those employees who have been fully vaccinated or qualified for an approved exemption.

The effects of the COVID-19 pandemic continue to evolve and, at this time, we cannot predict when certain restrictions that remain in place to protect our employees, customers and patients will no longer be needed.

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However, due to the speed and fluidity with which the COVID-19 pandemic continues to evolve, and the emergence of highly contagious variants, we do not yet know the full extent of the impact of COVID-19 on our business operations.

The ultimate extent of the impact of any epidemic, pandemic, outbreak, or other public health crisis on our business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of such epidemic, pandemic, outbreak, or other public health crisis and actions taken to contain or prevent the further spread, including the effectiveness of vaccination

campaigns, among others.

Accordingly, we cannot predict the extent to which our business, financial condition and results of operations will be affected.

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and CNS/Ocular Diseases.

The chart below is a summary of our commercial products and late- and early-stage development programs as of October 2021.

The chart below is a summary of our commercial products and late- and early-stage development programs as of April 2022.

It identifies those programs for which we have received marketing approval, the stage of our programs and our commercial rights to such programs:

During the third quarter of 2021 and recent period, we reported the following updates from our commercially approved products and our late-stage clinical programs:

• We achieved ONPATTRO global net product revenues for the third quarter of 2021 of $120.3 million.

• We achieved GIVLAARI global net product revenues for the third quarter of 2021 of $31.8 million, and continued geographic expansion for GIVLAARI with pricing and reimbursement approvals in Spain, the United Kingdom, France and Japan.

• We achieved OXLUMO global net product revenues for the third quarter of 2021 of $14.9 million, and continued planned geographic expansion for OXLUMO with ongoing pricing and reimbursement discussions in many European countries.

• We earned royalty revenues of $0.5 million from our partner, Novartis, based on Leqvio global net product revenues in the third quarter of 2021.

• Novartis announced a commercial agreement with the NHS in England as part of a collaboration to pioneer a first-of-its-kind population health management approach to address elevated LDL-C in eligible patients with ASCVD across England.

During the first quarter of 2022 and recent period, we reported the following updates from our commercially approved products and our late-stage clinical programs:

• We achieved ONPATTRO global net product revenues for the first quarter of 2022 of $137.0 million.

• We achieved GIVLAARI global net product revenues for the first quarter of 2022 of $35.3 million.

• We achieved OXLUMO global net product revenues for the first quarter of 2022 of $14.6 million.

• Our partner, Novartis, continued the launch of Leqvio in the U.S.

and in other markets, with focus on patient on-boarding, removing access hurdles and driving urgency to treat.

• Leqvio is now approved in more than 55 countries, with most awaiting reimbursement.

Late-Stage Clinical Development

• We continued to advance vutrisiran, a subcutaneously administered investigational RNAi therapeutic in development for the treatment of ATTR amyloidosis:

◦ Reported positive topline results for 18-month endpoints and safety from the HELIOS-A Phase 3 study in hATTR amyloidosis patients with polyneuropathy;

◦ Completed enrollment in the HELIOS-B Phase 3 study in ATTR amyloidosis patients with cardiomyopathy, ahead of schedule;

◦ Submitted an MAA to the EMA, ahead of schedule, and an NDA to ANVISA in Brazil for the treatment of hATTR amyloidosis in adult patients with polyneuropathy.

• We continued to advance lumasiran for the treatment of PH1:

◦ Reported positive topline results from the ILLUMINATE-C Phase 3 study in patients with advanced PH1.

• Our partner, Sanofi Genzyme, continued advancement of the ATLAS Phase 3 program for fitusiran in patients with hemophilia A or B with and without inhibitors:

◦ Announced that a potential filing date for fitusiran has been moved to 2024 due to the introduction of a lower dose cohort in the ongoing phase 3 studies.

• We continued to advance vutrisiran, a subcutaneously administered investigational RNAi therapeutic in development for the treatment of ATTR amyloidosis and Stargardt disease:

◦ Reported positive results for 18-month endpoints and safety from the HELIOS-A Phase 3 study in hATTR amyloidosis patients with polyneuropathy;

◦ Announced that the FDA extended the review timeline of the NDA for vutrisiran to July 14, 2022, to allow for review of newly added information related to the new secondary packaging and labeling facility.

• We continued to advance lumasiran for the treatment of PH1 and in development for the treatment of recurrent kidney stone disease:

◦ Announced FDA acceptance of our supplemental NDA for OXLUMO for the treatment of advanced PH1, with a PDUFA goal date of October 6, 2022;

◦ Submitted a Type II variation for lumasiran to amend the label to further inform on the use of lumasiran in patients with advanced PH1, which is undergoing review by the Committee for Medicinal Products for Human Use with a decision expected by year-end.

There is a risk that any drug discovery or development program may not produce revenue for a variety of reasons, including the possibility that we will not be able to adequately demonstrate the safety and effectiveness of the product candidate.

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Specifically, with respect to our CNS/Ocular Disease pipeline, in April 2019, we entered into a global, strategic collaboration with Regeneron to discover, develop and commercialize RNAi therapeutics for a broad range of diseases by addressing disease targets expressed in the eye and CNS, in addition to a select number of targets expressed in the liver.

With respect to our Cardio-Metabolic pipeline, in March 2013, we entered into an exclusive, worldwide license with MDCO (acquired by Novartis AG in January 2020) pursuant to which MDCO was granted the right to develop, manufacture and commercialize RNAi therapeutics targeting proprotein convertase subtilisin/kexin type 9, or PCSK9, for the treatment of hypercholesterolemia and other human diseases, including inclisiran.

In July 2020, Regeneron exercised its co-development/co-

commercialization option on our first CNS-targeted development candidate, ALN-APP, an investigational RNAi therapeutic in development for the treatment of hereditary cerebral amyloid angiopathy and autosomal dominant Alzheimer’s Disease, which we are leading.

We are also advancing multiple other programs with Regeneron.

With respect to our Cardio-Metabolic pipeline, in March 2013, we entered into an exclusive, worldwide license with MDCO (acquired by Novartis AG in January 2020) pursuant to which MDCO was granted the right to develop, manufacture and commercialize RNAi therapeutics targeting proprotein convertase subtilisin/kexin type 9 for the treatment of hypercholesterolemia and other human diseases, including inclisiran.

In March 2018, we entered into a discovery collaboration with Regeneron to identify RNAi therapeutics for nonalcoholic steatohepatitis, or NASH, and potentially other related diseases, and in November 2018, we and Regeneron entered into a separate, fifty-fifty collaboration to further research, co-develop and commercialize any therapeutic product candidates that emerge from these discovery efforts.

In April 2020, we entered into a development and commercialization collaboration with Dicerna to advance investigational RNAi therapeutics for the treatment of alpha-1 antitrypsin deficiency-associated liver disease, or alpha-1 liver disease.

With respect to our Hepatic Infectious Disease pipeline, in October 2017, we announced an exclusive licensing agreement with Vir for the development and commercialization of RNAi therapeutics for infectious diseases, including chronic hepatitis B virus, or HBV, infection.

In April 2020, we further expanded our broad multi-target existing collaboration for the development and commercialization of RNAi therapeutics for infectious diseases to include up to three additional targets focused on host factors for SARS-CoV-2, including angiotensin converting enzyme-2, and transmembrane protease, serine 2, and potentially a third mutually selected host factor target.

In March 2020, we announced an expansion of our exclusive licensing agreement with Vir to include the development and commercialization of RNAi therapeutics targeting SARS-CoV-2, the virus that causes the disease COVID-19, which we further expanded in April 2020 to include up to three additional targets focused on host factors for SARS-CoV-2, including angiotensin converting enzyme-2, and transmembrane protease, serine 2, and potentially a third mutually selected host factor target.

In July 2021, we notified Vir that we elected to discontinue ALN-COV, in development for the treatment of COVID-19, and all other COVID-19 research and development activities, based on a portfolio prioritization in view of the availability of highly effective vaccines and alternative treatment options.

Following such discontinuation of COVID-19 related activities, we have no further obligations to work on the COVID-related targets and Vir will have no further rights to such targets under our exclusive licensing agreement.

With respect to our Genetic Medicine pipeline, we formed a broad strategic alliance with Sanofi Genzyme in 2014.

In January 2018, we and Sanofi Genzyme amended our 2014 collaboration and entered into the Exclusive License Agreement, referred to as the Exclusive TTR License, under which we have the exclusive right to pursue the further global development and commercialization of all TTR products, including ONPATTRO, vutrisiran and any back-up products, and the ALN-AT3 Global License Terms, referred to as the AT3 License Terms, under which Sanofi Genzyme has the exclusive right to pursue the further global development and commercialization of fitusiran and any back-up products.

In April 2019, we and Sanofi Genzyme agreed to further amend the 2014 Sanofi Genzyme collaboration to conclude the research and option phase and to amend and restate the AT3 License Terms to modify certain of the business terms.

Following such discontinuation of COVID-19 related activities, we have no further obligations to work on the COVID-related targets and Vir has no further rights to such targets under our exclusive licensing agreement.

With respect to our Genetic Medicine pipeline, we formed a broad strategic alliance with Sanofi in 2014.

In January 2018, we and Sanofi amended our 2014 collaboration and entered into the Exclusive License Agreement, referred to as the Exclusive TTR License, under which we have the exclusive right to pursue the further global development and commercialization of all TTR products, including ONPATTRO, vutrisiran and any back-up products, and the ALN-AT3 Global License Terms, referred to as the AT3 License Terms, under which Sanofi has the exclusive right to pursue the further global development and commercialization of fitusiran and any back-up products.

In April 2019, we and Sanofi agreed to further amend the 2014 Sanofi collaboration to conclude the research and option phase and to amend and restate the AT3 License Terms to modify certain of the business terms.

We intend to continue to evaluate and explore partnership opportunities through collaboration and licensing arrangements, and may enter into new collaborations to advance certain products or disease areas.

For example, in January 2022, we announced that we and Novartis agreed to collaborate on the discovery and development of an siRNA-based targeted therapy to restore functional liver cells in patients with end-stage liver diseases.

We also have entered into license agreements to obtain rights to intellectual property in the field of RNAi.

In addition, because delivery of RNAi therapeutics has historically been an important objective of our research activities, we have entered into various collaboration and licensing arrangements with other companies and academic institutions to gain access to delivery technologies, including various LNP delivery technologies, and we may enter into such agreements in the future to gain access to products or technologies.

For example, in 2021, we entered into a license and collaboration agreement with PeptiDream to discover and develop peptide-siRNA conjugates leveraging PeptiDream's proprietary Peptide Discovery Platform System technology.

Critical Accounting Policies and Estimates

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The following data summarizes the results of our operations:

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands, except percentages) 2021 2020 $ Change % Change 2021 2020 $ Change % Change

Three Months Ended March 31,

(In thousands, except percentages) 2022 2021 $ Change % Change

Total revenues $ 213,259 $ 177,566 $ 35,693 20 %

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Loss from operations $ (146,732) $ (186,254) $ 39,522 (21) %

Total other (expense) income, net $ (22,559) $ (27,253) $ 4,694 (17) % $ (77,751) $ 22,215 $ (99,966) (450) %

Net loss $ (240,341) $ (200,291) $ (40,050) 20 %

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Total revenues consist of the following:

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands, except percentages) 2021 2020 $ Change % Change 2021 2020 $ Change % Change

Three Months Ended March 31,

(In thousands, except percentages) 2022 2021 $ Change % Change

Net product revenues $ 186,872 $ 135,769 $ 51,103 38 %

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25,945 41,797 (15,852) (38) %

Royalty revenue 453 — 453 N/A 800 — 800 N/A

Royalty revenue 442 — 442 N/A

Total $ 213,259 $ 177,566 $ 35,693 20 %

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Net product revenues consist of the following, by product and region:

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands, except percentages) 2021 2020 $ Change % Change 2021 2020 $ Change % Change

Three Months Ended March 31,

(In thousands, except percentages) 2022 2021 $ Change % Change

United States $ 62,307 $ 49,471 $ 12,836 26 %

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Europe 9,688 6,873 2,815 41 %

Rest of World (primarily Japan) 1,893 — 1,893 N/A 2,173 — 2,173 N/A

Rest of World 1,914 38 1,876 4,937 %

Total $ 35,277 $ 24,673 $ 10,604 43 %

United States $ 5,236 $ — $ 5,236 N/A $ 13,156 $ — $ 13,156 N/A

Europe 9,658 — 9,658 N/A 27,225 — 27,225 N/A

Total $ 14,894 $ — $ 14,894 N/A $ 40,381 $ — $ 40,381 N/A

United States $ 5,412 $ 1,408 $ 4,004 284 %

Europe 8,158 7,737 421 5 %

Rest of World 1,016 — 1,016 N/A

Total $ 14,586 $ 9,145 $ 5,441 59 %

Total net product revenues $ 186,872 $ 135,769 $ 51,103 38 %

Net product revenues increased during the three and nine months ended September 30, 2021, as compared to the same periods in the prior year, as a result of the continued, global expansion of ONPATTRO and GIVLAARI into additional major markets and increased patients on therapy, in addition to sales generated from our third commercial product, OXLUMO, following regulatory approvals in the fourth quarter of 2020.

We expect net product revenues to increase for the twelve-month period ending December 31, 2021, as compared to the same period in 2020, as we continue to add new patients onto our approved, commercial products, as well as launch our approved products into additional markets, assuming regulatory approvals.

Net revenues from collaborations

Net product revenues increased during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, as a result of increased patients on ONPATTRO, GIVLAARI, and OXLUMO therapies, offset by an unfavorable impact from foreign exchange rates on our international revenues.

We expect net product revenues to increase during 2022, as compared to 2021, as we continue to add new patients onto our commercial products as well as launch our approved products into additional markets, assuming regulatory approvals.

Please read Note 3 to our condensed consolidated financial statements included in Part I, Item 1, “Financial Statements (Unaudited),” of this Quarterly Report on Form 10-Q for balances and activity in each product revenue allowance and reserve category for the three months ended March 31, 2022 and 2021.

Net Revenues from Collaborations and Royalty Revenue

Net revenues from collaborations consist of the following:

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands, except percentages) 2021 2020 $ Change % Change 2021 2020 $ Change % Change

Three Months Ended March 31,

(In thousands, except percentages) 2022 2021 $ Change % Change

Regeneron Pharmaceuticals $ 12,412 $ 30,343 $ (17,931) (59) %

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Total $ 25,945 $ 41,797 $ (15,852) (38) %

Net revenues from collaborations decreased during the three months ended September 30, 2021, as compared to the same period in the prior year, primarily due to a decrease in revenue recognized in connection with our collaboration agreement with Vir.

Net revenues from collaborations increased during the nine months ended September 30, 2021, as compared to the same period in the prior year, primarily due to an increase in revenue recognized in connection with our collaboration agreements with Regeneron as a result of increased activities under the C5 collaboration.

We expect net revenues from collaborations to increase for the twelve-month period ending December 31, 2021, as compared to the same period in 2020, primarily due to increased activities under our collaborations with Regeneron and Novartis.

Royalty revenue

We earn royalty revenue from global net sales of Leqvio by our collaborator, Novartis.

We expect royalty revenue to increase for the remainder of 2021 as Novartis continues to execute on its launch of Leqvio in Europe and potentially other geographies, assuming regulatory approvals.

Net revenues from collaborations decreased during the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, primarily due to a decrease in revenue recognized in connection with our collaboration agreement with Regeneron, attributed to reduce manufacturing activities.

We earn royalty revenue from global net sales of Leqvio by our partner, Novartis.

In December 2020, Leqvio received marketing authorization from the EC for the treatment of adults with hypercholesterolemia or mixed dyslipidemia, and in December 2021, Leqvio was approved by the FDA for the treatment of adults with HeFH or ASCVD.

During the quarter ended March 31, 2022, we recorded $0.4 million in royalty revenue.

Recognition of our combined net revenues from collaborations and royalty revenue is dependent on a variety of factors including the level of work reimbursed by partners, achievement of milestones under our collaboration agreements, and royalties associated with sales of Leqvio.

As a result, there may be variability in revenue recognized from collaborations and royalties in 2022.

Operating Costs and Expenses

Operating costs and expenses consist of the following:

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands, except percentages) 2021 2020 $ Change % Change 2021 2020 $ Change % Change

Three Months Ended March 31,

(In thousands, except percentages) 2022 2021 $ Change % Change

Cost of goods sold $ 23,457 $ 23,023 $ 434 2 %

Cost of collaborations and royalties 4,572 971 3,601 N/A 21,110 2,635 18,475 N/A

Cost of collaborations and royalties 12,170 8,039 4,131 51 %

Research and development 169,893 185,899 (16,006) (9) %

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Cost of goods sold .

Cost of goods sold increased during the three and nine months ended September 30, 2021, as compared to the same periods in the prior year, due to the increase in third-party royalties and sales of capitalized inventory.

Cost of goods sold as a percentage of net product revenues decreased to 12.6% for the three months ended March 31, 2022, as compared to 17.0% for the three months ended March 31, 2021, primarily due to decreased royalties paid to third parties and decreased intangible amortization as a result of third party patent expiry.

We anticipate variability in our cost of goods sold as a percentage of net product revenues due to the timing of manufacturing runs and utilization and the depletion of zero-cost inventories, as well as future product launches.

We expect cost of goods sold will increase for the twelve-month period ending December 31, 2021, as compared to the same period in 2020, primarily as a result of an expected increase in net product sales as well as the sale of capitalized inventory.

We expect cost of goods sold will increase during 2022, as compared to 2021, primarily as a result of an expected increase in net product sales as well as the sale of capitalized inventory.

Cost of collaborations and royalties

Cost of collaborations and royalties includes costs we incur in connection with providing commercial drug supplies, such as GalNAc, for collaborators, in addition to royalties we owe to third parties on the net sales of licensed products by Novartis.

We expect cost of collaborations and royalties will increase for the twelve-month period ending December 31, 2021, as compared to the same period in 2020, as we continue to supply material to Novartis to support the manufacturing of Leqvio as Novartis executes on the product launch in Europe and prepares for other potential market approvals.

Cost of collaborations and royalties increased during the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, primarily due to an increase in GalNAc material supply to Novartis to support its continued, global launch of Leqvio, as well as its ongoing clinical trials.

We expect cost of collaborations and royalties to remain relatively consistent during 2022, as compared to 2021, due to consistency in planned GalNAc material to be supplied to Novartis to support the manufacturing of Leqvio.

Research and development .

Research and development expenses consist of the following:

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands, except percentages) 2021 2020 $ Change % Change 2021 2020 $ Change % Change

Clinical trial and manufacturing $ 75,639 $ 54,705 $ 20,934 38 % $ 217,683 $ 155,757 $ 61,926 40 %

Three Months Ended March 31,

(In thousands, except percentages) 2022 2021 $ Change % Change

Clinical research and outside services $ 76,880 $ 87,411 $ (10,531) (12) %

Compensation and related 51,300 48,372 2,928 6 %

External services 27,982 17,512 10,470 60 % 58,734 53,450 5,284 10 %

Facilities-related 19,928 18,256 1,672 9 % 59,932 51,658 8,274 16 %

Stock-based compensation 11,617 24,375 (12,758) (52) %

Lab supplies, materials and other 11,275 9,625 1,650 17 % 32,952 32,071 881 3 %

License Fees 163 — 163 N/A 1,380 2,413 (1,033) (43) %

Occupancy and all other costs 30,096 25,741 4,355 17 %

Total $ 169,893 $ 185,899 $ (16,006) (9) %

For the three and nine months ended September 30, 2021, the increase in research and development expenses, as compared to the same period in the prior year, was primarily related to increased expenses associated with activities related to the advancement of our early- and late-stage programs.

During the three and nine months ended September 30, 2021 and 2020, in connection with advancing activities under our collaboration agreements, we incurred research and development expenses, primarily related to external development and clinical expenses, including manufacturing of clinical product.

Research and development expenses decreased during the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, primarily due to the following:

• Decreased clinical manufacturing activity;

• Decreased stock-based compensation expense primarily due to the accounting for certain performance-based awards.

During the three months ended March 31, 2022 and 2021, in connection with advancing activities under our collaboration agreements, we incurred research and development expenses, primarily related to external development and clinical expenses, including manufacturing of clinical product.

The following table summarizes research and development expenses incurred, for which we recognize net revenue, that are directly attributable to our collaboration agreements, by collaboration partner:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2022 2021

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Vir Biotechnology 298 2,543

Other 235 1,076 2,039 3,242

Total $ 11,725 $ 20,596

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Selling, general and administrative expenses consist of the following:

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands, except percentages) 2021 2020 $ Change % Change 2021 2020 $ Change % Change

Three Months Ended March 31,

(In thousands, except percentages) 2022 2021 $ Change % Change

Compensation and related $ 60,283 $ 56,072 $ 4,211 8 %

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Stock-based compensation 17,676 31,315 (13,639) (44) %

Facilities-related 10,343 11,299 (956) (8) % 33,944 32,695 1,249 4 %

Other 13,085 39,072 (25,987) (67) % 36,653 60,559 (23,906) (39) %

Occupancy and all other costs 32,051 22,766 9,285 41 %

Total $ 154,471 $ 146,859 $ 7,612 5 %

For the three months ended September 30, 2021, the decrease in selling, general and administrative expenses, as compared to the same periods in the prior year, was primarily due to a change in an estimate of contingent liabilities related to our arbitration with Ionis Pharmaceuticals, Inc.

For the nine months ended September 30, 2021, the increase in selling, general and administrative expenses, as compared to the same periods in the prior year, was primarily related to increases in compensation and related expenses and stock-based compensation expense as a result of increased headcount to support our Alnylam P 5 x25 strategy, offset by a change in an estimate of contingent liabilities related to our arbitration with Ionis Pharmaceuticals, Inc.

We expect that research and development expenses combined with selling, general and administrative expenses will increase for the twelve-month period ending December 31, 2021, as compared to the same period in 2020, as we continue to develop our pipeline, advance our product candidates, including partnered programs, into later-stage development, prepare regulatory submissions and build-out of our global commercial infrastructure and field team to support ONPATTRO, GIVLAARI, OXLUMO and potentially additional product launches, including vutrisiran.

Selling, general and administrative expenses increased during the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, primarily due to the following:

• Increased legal expenses, charitable contributions and other expenses to support our strategic growth.

• Decreased stock-based compensation expense primarily due to the accounting for certain performance-based awards.

We expect that research and development expenses combined with selling, general and administrative expenses will increase during 2022, as compared to 2021, as we continue to advance and develop our platform and pipeline, advance our product candidates, including partnered programs, into later-stage development, prepare regulatory submissions and continue to build-out our global commercial and compliance infrastructure and field team to support ONPATTRO, GIVLAARI, OXLUMO and potentially additional product launches, including vutrisiran.

However, we expect that certain expenses will be variable depending on the timing of manufacturing batches, clinical trial enrollment and results, regulatory review of our product candidates and programs, and stock-based compensation expenses due to our determination regarding the probability of vesting for performance-based awards.

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Other (expense) income consists of the following:

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands, except percentages) 2021 2020 $ Change % Change 2021 2020 $ Change % Change

Three Months Ended March 31,

(In thousands, except percentages) 2022 2021 $ Change % Change

Interest expense $ (42,362) $ (32,515) $ (9,847) 30 %

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Other (expense) income, net

Realized and unrealized gains (losses) on marketable equity securities 18,691 (3,017) 21,708 (720) % 61,273 66,626 (5,353) (8) %

Change in fair value of development derivative liability 3,188 (1,229) 4,417 N/A (19,655) (1,229) (18,426) N/A

Realized and unrealized (losses) gains on marketable equity securities (31,161) 47,016 (78,177) (166) %

Change in fair value of development derivative liability (13,782) (18,253) 4,471 (24) %

Other (6,331) (9,719) 3,388 (35) %

Total $ (92,624) $ (13,021) $ (79,603) 611 %

For the three months ended September 30, 2021, total other expense, net, decreased, as compared to the same period in the prior year, primarily due to realized and unrealized gains on marketable equity securities offset by increases in interest expense associated with the sale of future royalties and the drawdown of our credit facility beginning in December 2020.

For the nine months ended September 30, 2021, total other expense, net, increased, as compared to total other income, net, in the same period in the prior year, primarily due to increases in interest expense associated with the sale of future royalties and the drawdown of our credit facility beginning in December 2020.

We expect total other expense, net, will increase for the twelve-month period ending December 31, 2021, as compared to the same period in 2020, as we continue to incur interest expense on our long-term debt and sale of future royalties.

Total other expense increased during the three months ended March 31, 2022, as compared to the three months ended March 31, 2021, primarily due to realized and unrealized losses on our marketable equity securities holdings.

Liquidity and Capital Resources

The following table summarizes our cash flow activities:

Nine Months Ended September 30,

Three Months Ended March 31,

(In thousands) 2022 2021

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Net cash used in operating activities (171,193) (235,660)

Net cash provided by (used in) investing activities 140,105 (337,630)

Net cash (used in) provided by investing activities (147,419) 71,352

Net cash provided by financing activities 34,956 51,177

Effect of exchange rate changes on cash, cash equivalents and restricted cash (2,238) (3,910)

Net increase (decrease) in cash, cash equivalents and restricted cash 597,412 (50,472)

Net decrease in cash, cash equivalents and restricted cash (285,894) (117,041)

Cash, cash equivalents and restricted cash, beginning of period

2 unchanged sentences

$ 536,259 $ 382,005

Since we commenced operations in 2002, we have generated significant losses.

As of September 30, 2021, we had an accumulated deficit of $5.18 billion.

As of September 30, 2021, we had cash, cash equivalents and marketable securities of $2.33 billion, compared to $1.87 billion as of December 31, 2020.

Operating activities

Net cash used in operating activities was relatively consistent during the nine months ended September 30, 2021, compared to the same period in 2020, as stronger cash receipts from increased product sales were largely offset by cash disbursements related to working capital receipts and payments.

Net cash used in operating activities decreased during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to decreased cash disbursements related to working capital payments and stronger cash receipts from increased product sales.

Investing activities

Net cash provided by investing activities increased during the nine months ended September 30, 2021, compared to the same period in the prior year, reflecting timing differences related to purchases, sales, and maturities of debt securities and changes in our portfolio-mix.

Net cash used in investing activities increased during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to increased purchases of marketable debt securities.

Financing activities

Net cash provided by financing activities increased during the nine months ended September 30, 2021, compared to the same period in the prior year, primarily due to proceeds of $250.0 million in connection with the second drawdown on our credit agreement, received in June 2021.

Operating Capital Requirements

We currently have programs focused on a number of therapeutic areas and, as of September 30, 2021, have received regulatory approval and commercially launched three products:

Net cash provided by financing activities decreased during the three months ended March 31, 2022, compared to the three months ended March 31, 2021, primarily due to a decrease of $19.9 million in net proceeds from the issuance of common stock in connection with stock option exercises and other types of equity.

Additional Capital Requirements

We currently have programs focused on a number of therapeutic areas and, as of March 31, 2022, have received regulatory approval and commercially launched three products:

ONPATTRO, GIVLAARI and OXLUMO.

In early 2021, we announced our Alnylam P 5 x25 strategy, which is aimed at our planned transition to a top 5 biotech in market capitalization.

However, our ongoing development efforts may not be successful and we may not be able to commence sales of any other products in the future.

In addition, we anticipate that we will continue to generate losses as a result of planned expenditures for research and development activities relating to our research platform, our drug development programs, including clinical trial and manufacturing costs, the establishment of late-stage clinical, manufacturing and commercial capabilities, including global operations, continued management and growth of our intellectual property including our patent portfolio, collaborations and general corporate activities.

Based on our current operating plan, we believe that our cash, cash equivalents and marketable securities as of September 30, 2021, together with the cash we expect to generate from product sales and under our current alliances, in addition to our strategic financing collaboration with The Blackstone Group Inc.

and certain of its affiliates, will be sufficient to enable us to advance our long-term strategic goals for at least the next 12 months from the filing of this Quarterly Report on Form 10-Q.

However, our ongoing development efforts may not be successful and we may not be able to commence sales of any other products, including vutrisiran, or successfully expand the indication for our approved products, including OXLUMO, ONPATTRO (and vutrisiran,

if approved), in the future.

In addition, we anticipate that we will continue to generate losses as a result of planned expenditures for research and development activities relating to our research platform, our drug development programs, including clinical trial and manufacturing costs, the establishment of late-stage clinical, manufacturing, commercial and compliance capabilities, including global operations, continued management and growth of our intellectual property including our patent portfolio, collaborations and general corporate activities

Our expected working and other capital requirements are described in our 2021 Annual Report on Form 10-K in “Part II, Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.” As of March 31, 2022, other than the changes disclosed in the “Notes to Condensed Consolidated Financial Statements” and “Liquidity and Capital Resources” section in this Quarterly Report on Form 10-Q, there have been no other material changes to our expected working and other capital requirements as described in our 2021 Annual Report on Form 10-K.

Based on our current operating plan, we believe that our cash, cash equivalents and marketable securities as of March 31, 2022, together with the cash we expect to generate from product sales and under our current alliances, including milestones and royalties on Leqvio sales, will be sufficient to enable us to advance our long-term strategic goals for at least the next 12 months from the filing of this Quarterly Report on Form 10-Q.

However, due to numerous factors described in more detail under the caption Part II, Item 1A, "Risk Factors" of this Quarterly Report on Form 10-Q, we may require significant additional funds earlier than we currently expect in order to continue to commercialize ONPATTRO, GIVLAARI and OXLUMO, and to develop, conduct clinical trials for, manufacture and, if approved, commercialize additional product candidates, including vutrisiran.

Contractual Obligations and Commitments

The disclosure of our contractual obligations and commitments is set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations” in our Annual Report on Form 10-K for the year ended December 31, 2020.

There have been no material changes in our contractual obligations and commitments since December 31, 2020.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis