What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-10-27 compared with 2022-07-28 · 103 added, 94 removed, 203 unchanged (49% of the section changed)

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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 five marketed products and over a dozen clinical programs, including five in late-stage development, across four Strategic Therapeutic Areas, or “STArs:” Genetic Medicines;

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

Cardio-Metabolic Diseases;

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

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.

ONPATTRO is approved by the United States Food and Drug Administration, or the 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.

In August 2022, we reported positive results from the APOLLO-B Phase 3 study of patisiran (the non-branded name of ONPATTRO) in patients with ATTR amyloidosis with cardiomyopathy and announced that we plan to submit a supplemental New Drug Application, or sNDA, for ONPATTRO as a potential treatment for ATTR amyloidosis with cardiomyopathy for review by the FDA in late 2022.

GIVLAARI is approved in the U.S.

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.

Regulatory filings for givosiran (the non-branded drug name for GIVLAARI) are pending or planned during the remainder of 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.

In October 2022, we announced that the FDA approved our sNDA for lumasiran (the non-branded drug name for OXLUMO), for the treatment of PH1 to lower urinary oxalate and plasma oxalate levels in pediatric and adult patients.

Regulatory filings in other territories are pending and additional filings are planned during the remainder of 2022 and beyond.

In June 2022, we received regulatory approval for AMVUTTRA in the U.S.

for the treatment of the polyneuropathy of hATTR amyloidosis in adults.

We have also filed for regulatory approval for vutrisiran (the non-branded name of AMVUTTRA) with the European Medicines Agency, or EMA, the Brazilian Health Regulatory Agency and the Japanese Pharmaceuticals and Medical Devices Agency, or PMDA.

Additional regulatory filings are planned for 2022 and beyond.

In September 2022, the European Commission, or EC, granted marketing authorization for AMVUTTRA for the treatment of hATTR amyloidosis in adult patients with stage 1 or stage 2 polyneuropathy.

We have also filed for regulatory approval for vutrisiran (the non-branded name of AMVUTTRA) with the Brazilian Health Regulatory Agency and the Japanese Pharmaceuticals and Medical Devices Agency, or the PMDA.

Additional regulatory filings are planned during the remainder of 2022 and beyond.

Our fifth product, Leqvio (inclisiran), is in the Cardio-Metabolic Diseases STAr.

Leqvio 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 from 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 the end of June 2022, Leqvio has been approved in 60 countries.

Leqvio is being developed and commercialized by our partner Novartis AG, or Novartis, and has received marketing authorization from the EC for the treatment of adults with hypercholesterolemia or mixed dyslipidemia and from 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 the end of September 2022, Leqvio has been approved in more than 60 countries.

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

These programs include our wholly owned programs:

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;

vutrisiran for the treatment of ATTR amyloidosis with cardiomyopathy and Stargardt Disease;

lumasiran for the treatment of recurrent renal stones;

patisiran for the treatment of transthyretin amyloidosis, or ATTR amyloidosis, with cardiomyopathy;

vutrisiran for the

treatment of ATTR amyloidosis with cardiomyopathy;

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 cemdisiran in combination with pozelimab in Phase 3 studies in myasthenia gravis and paroxysmal nocturnal hemoglobinuria.

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 cemdisiran in combination with pozelimab in Phase 3 studies in myasthenia gravis and paroxysmal nocturnal hemoglobinuria.

As part of our Alnylam P 5 x25 strategy, we are focused on developing transformative prevalent disease medicines.

In addition to Leqvio, we are advancing zilebesiran, an investigational, subcutaneously administered RNAi therapeutic targeting angiotensinogen, or AGT, in development for the treatment of hypertension.

In November 2021, we reported positive interim data from the ongoing Phase 1 study of zilebesiran, and initiated the KARDIA Phase 2 clinical studies for zilebesiran.

KARDIA-1 is designed to evaluate zilebesiran as a monotherapy across different doses administered quarterly and biannually.

KARDIA-2 will evaluate the safety and efficacy of zilebesiran administered biannually as a concomitant therapy in patients whose blood pressure is not adequately controlled by standard of care antihypertensive medications.

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.

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(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 June 30, 2022, we had an accumulated deficit of $5.96 billion.

We have incurred significant losses since we commenced operations in 2002 and as of September 30, 2022, we had an accumulated deficit of $6.36 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.

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 operating 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 July 15, 2022, we generate worldwide product revenues from four commercialized products, ONPATTRO, GIVLAARI, OXLUMO and AMVUTTRA, 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, AMVUTTRA or any other approved products in the future.

We currently have programs focused on a number of therapeutic areas and, as of September 30, 2022, we generate worldwide product revenues from four commercialized products, ONPATTRO, GIVLAARI, OXLUMO and AMVUTTRA, 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 our approved products or any other products approved in the future.

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

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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.

Convertible Senior Notes

In September 2022, we issued $1.04 billion aggregate principal amount of 1.00% Convertible Senior Notes due 2027, or Notes.

The Notes will mature on September 15, 2027, unless earlier converted, redeemed or repurchased.

The Notes will bear interest from September 15, 2022 at a rate of 1.00% per year payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2023.

Before June 15, 2027, noteholders will have the right to convert their Notes in certain circumstances and during specified periods.

From and after June 15, 2027, the Notes will be convertible at the option of the noteholders at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date.

We will settle any conversions of Notes by paying or delivering, as applicable, cash shares of our common stock, par value $0.01 per share, or Common Stock, or a combination of cash and shares of Common Stock, at our election.

In connection with the issuance of the Notes, we paid $118.6 million, including expenses, to enter into privately negotiated capped call transactions with certain initial purchasers of the Notes or their respective affiliates and certain other financial institutions, or capped call transactions.

The capped call transactions are expected generally to reduce the potential dilution upon conversion of the Notes in the event that the market price per share of our common stock, as measured under the terms of the capped call transactions, is greater than the strike price of the capped call transactions, which initially corresponds to the conversion price of the Notes, and is subject to anti-dilution adjustments generally similar to those applicable to the conversion rate of the Notes.

The cap price of the capped call transactions will initially be $424.00 per share, which represents a premium of approximately 100% based on the last reported sale price of our common stock of $212.00 per share on September 12, 2022, and is subject to certain adjustments under the terms of the capped call transactions.

If, however, the market price per share of our common stock, as measured under the terms of the capped call transactions, exceeds the cap price of the capped call transactions, there would nevertheless be dilution upon conversion of the Notes to the extent that such market price exceeds the cap price of the capped call transactions.

We used approximately $762.0 million of the net proceeds from the offering to repay borrowings, inclusive of prepayment premiums, under our credit agreement with Blackstone, and intend to use the remainder of the net proceeds for general corporate purposes.

The COVID-19 Pandemic

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.

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, 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 ongoing 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 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 ongoing COVID-19 pandemic has continued to ebb and flow, with different jurisdictions having higher levels of infections than others and new variants of the virus (such as the Omicron-lineage variants) emerging and spreading more easily and quickly than other variants 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.

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 and booster vaccination campaigns, among others.

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

We remain focused on maintaining a strong balance sheet, liquidity and financial flexibility and continue to monitor developments as we deal with the disruptions and uncertainties from a business and financial perspective relating to COVID-19 and variants thereof.

We will continue to work diligently with our partners and stakeholders to support patient access to our approved medicines, advance our product candidates under regulatory review as well as in our clinical studies to the extent safe to do so for patients, caregivers and healthcare practitioners, and ensure the continuity of our manufacturing and supply chain.

The ongoing COVID-19 pandemic is evolving, and to date has led to the implementation of various responses, including government-imposed quarantines, travel restrictions, and other public health safety measures.

We have and will continue to closely monitor 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 ongoing COVID-19 pandemic.

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.

The extent to which COVID-19 ultimately impacts our business, results of operations or financial condition will depend on future developments, which, despite progress in vaccination efforts, remain highly uncertain and cannot be predicted with confidence, such as the duration of the COVID-19 pandemic, new strains of the virus, including any future variants that may emerge, which may impact rates of infection and vaccination efforts, developments or perceptions regarding the safety of vaccines, new information that may emerge concerning the severity of COVID-19, and any additional preventative and protective actions taken to contain the pandemic or treat its impact, among others.

The estimates of the impact on the Company’s business may change based on new information that may emerge concerning COVID-19 and the actions to contain it or treat its impact and the economic impact on local, regional, national and international markets.

For additional information related to the actual or potential impacts of COVID-19 on our business, please read Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q.

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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 July 2022.

The chart below is a summary of our commercial products and late- and early-stage development programs as of October 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 second quarter of 2022 and recent period, we reported the following updates from our commercially approved products and our late-stage clinical programs:

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

TTR Franchise:

ONPATTRO & AMVUTTRA

• We achieved ONPATTRO global net product revenues for the second quarter of 2022 of $153.4 million.

• Received 133 Start Forms in the U.S.

for AMVUTTRA from launch through July 22, 2022.

• We achieved GIVLAARI global net product revenues for the second quarter of 2022 of $45.2 million.

• We achieved OXLUMO global net product revenues for the second quarter of 2022 of $14.9 million.

• We achieved global net product revenues for ONPATTRO and AMVUTTRA for the third quarter of 2022 of $145.0 million and $25.2 million, respectively.

• We achieved GIVLAARI global net product revenues for the third quarter of 2022 of $45.7 million.

• We achieved OXLUMO global net product revenues for the third quarter of 2022 of $16.4 million.

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

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Late-Stage Clinical Development

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

◦ Received FDA approval of AMVUTTRA for the treatment of the polyneuropathy of hATTR amyloidosis in adults;

◦ Received a positive opinion from the CHMP of the EMA recommending approval of vutrisiran for the treatment of hATTR amyloidosis in adult patients with stage 1 or stage 2 polyneuropathy.

• We continued to advance patisiran, in development for the treatment of ATTR amyloidosis:

◦ Reported positive results from the APOLLO-B Phase 3 study in patients with ATTR amyloidosis with cardiomyopathy, and announced that we remain on track to submit an sNDA for review by the FDA by year-end.

• We continued to advance vutrisiran, in development for the treatment of ATTR amyloidosis:

◦ Received marketing authorization for AMVUTTRA for the treatment of hATTR amyloidosis in adults with stage 1 or stage 2 polyneuropathy in Europe and the UK, as well as approval for TTR type familial amyloidosis with polyneuropathy in Japan;

◦ Announced that we do not plan to conduct the optional interim analysis for the HELIOS-B Phase 3 study in patients with ATTR amyloidosis with cardiomyopathy, and that the study remains on track for topline results in early 2024.

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

◦ Presented new results from the ILLUMINATE-A Phase 3 study in patients with PH1;

◦ Presented new results from the 12-month analysis of the ILLUMINATE-B Phase 3 open-label pediatric study in patients less than six years of age with PH1;

◦ Presented new results from the ILLUMINATE-C Phase 3 study in patients with advanced PH1.

◦ Based on the successful outcome of the ILLUMINATE-C study in children and adults with advanced PH1, received approval from the FDA of an sNDA for OXLUMO, expanding the indication for the treatment of PH1 to lower urinary oxalate and plasma oxalate levels in pediatric and adult patients, and received approval from the EMA of a Type II variation to include the ILLUMINATE-C data in the label.

• We continued to advance cemdisiran for the treatment of complement-mediated diseases, in collaboration with our partner, Regeneron:

◦ Reported positive topline results from the Phase 2 study in patients with immunoglobulin A nephropathy, or IgAN;

◦ Announced that we are working with Regeneron to finalize plans for the Phase 3 clinical development of cemdisiran in IgAN, with the potential to initiate a program by late 2022.

• Our partner, Sanofi, presented positive data from the ATLAS Phase 3 study evaluating the efficacy and safety of once-monthly fitusiran (80 mg) in adults and adolescents with severe hemophilia A or B who were previously treated with prior factor or bypassing agent, or BPA, prophylaxis:

◦ The study met the primary endpoint and demonstrated fitusiran prophylaxis significantly reduced bleeding episodes compared to prior factor or BPA prophylaxis.

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.

◦ Reported positive results from the Phase 2 study in patients with immunoglobulin A nephropathy, or IgAN;

◦ Announced that we are working with Regeneron to finalize plans for the Phase 3 clinical development of cemdisiran in IgAN.

Moreover, there are uncertainties specific to any new field of drug discovery, including RNAi.

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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.

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.

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The following data summarizes the results of our operations:

Three Months Ended June 30, Six Months Ended June 30,

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

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

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Loss from operations $ (258,040) $ (181,677) $ (76,363) 42 % $ (596,458) $ (514,091) $ (82,367) 16 %

Total other expense, net $ (147,903) $ (22,559) $ (125,344) 556 % $ (323,514) $ (77,751) $ (245,763) 316 %

Net loss $ (405,920) $ (204,514) $ (201,406) 98 % $ (923,663) $ (594,364) $ (329,299) 55 %

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Total revenues consist of the following:

Three Months Ended June 30, Six Months Ended June 30,

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

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

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

Three Months Ended June 30, Six Months Ended June 30,

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

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

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Total 144,950 120,317 24,633 20 % 435,387 336,107 99,280 30 %

United States 25,060 — 25,060 N/A 25,060 — 25,060 N/A

Europe 169 — 169 N/A 169 — 169 N/A

Total 25,229 — 25,229 N/A 25,229 — 25,229 N/A

United States 31,169 22,372 8,797 39 % 84,505 62,502 22,003 35 %

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Total net product revenues $ 232,267 $ 167,044 $ 65,223 39 % $ 632,654 $ 463,624 $ 169,030 36 %

Net product revenues increased during the three and six months ended June 30, 2022, compared to the same periods in 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, including AMVUTTRA which was recently approved, as well as launch these products into additional markets, assuming regulatory approvals.

Net product revenues increased during the three and nine months ended September 30, 2022, compared to the same periods in 2021, as a result of increased patients on ONPATTRO, AMVUTTRA, 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 these products into additional markets, assuming regulatory approvals.

Net Revenues from Collaborations and Royalty Revenue

Net revenues from collaborations consist of the following:

Three Months Ended June 30, Six Months Ended June 30,

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

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

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Total $ 29,297 $ 20,136 $ 9,161 45 % $ 64,267 $ 121,328 $ (57,061) (47) %

Net revenues from collaborations decreased during the three and six months ended June 30, 2022, as compared to the same periods in 2021, primarily due to a decrease in revenue recognized in connection with our collaboration agreement with Regeneron, attributed to reduced research and manufacturing activities and timing of reimbursable activities.

Net revenues from collaborations increased during the three months ended September 30, 2022, as compared to the same period in 2021, primarily due to an increase in revenue recognized in connection with our collaboration agreement with Regeneron, attributed to an increase in reimbursable activities under our research services arrangement in addition to an increase in revenue recognized associated with our clinical trial activities.

Net revenues from collaborations decreased during the nine months ended September 30, 2022, as compared to the same periods in 2021, primarily due to a decrease in revenue recognized in connection with our collaboration agreement with Regeneron, attributed to reduced research and manufacturing activities and timing of reimbursable 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 June 30, 2022, we recorded $2.3 million in royalty revenue.

During the quarter ended September 30, 2022, we recorded $2.7 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.

We expect net revenues from collaboration and royalty revenue to decrease in 2022, as compared to 2021, primarily due to the timing of reimbursable activities in our collaboration with Regeneron.

Operating Costs and Expenses

Operating costs and expenses consist of the following:

Three Months Ended June 30, Six Months Ended June 30,

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

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

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Cost of goods sold .

Cost of goods sold as a percentage of net product revenues decreased to 15.9% and 14.4% for the three and six months ended June 30, 2022, respectively, as compared to 18.8% and 18.0% for the three and six months ended June 30, 2021, respectively, primarily due to fully amortized intangible assets.

Cost of goods sold as a percentage of net product revenues decreased to 15.7% and 14.9% for the three and nine months ended September 30, 2022, respectively, as compared to 16.8% and 17.6% for the three and nine months ended September 30, 2021, respectively, primarily due to fully amortized intangible assets and reduced royalties as a result of the expiry of third-party intellectual property.

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 launch our approved products into additional markets, assuming regulatory approvals.

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Cost of collaborations and royalties.

Cost of collaborations and royalties decreased during the three months ended June 30, 2022 and increased during the six months ended June 30, 2022, as compared to the same periods in 2021.

Fluctuations year over year are primarily due to timing and demand of 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.

Cost of collaborations and royalties increased during the three and nine months ended September 30, 2022, as compared to the same periods in 2021, primarily due to timing and demand of GalNAc material supply to our collaboration partners to support certain product manufacturing and 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 our collaboration partners.

Research and development .

Research and development expenses consist of the following:

Three Months Ended June 30, Six Months Ended June 30,

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

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

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Total $ 245,371 $ 194,572 $ 50,799 26 % $ 620,976 $ 563,106 $ 57,870 10 %

For the three and six months ended June 30, 2022, the increases in research and development expenses, as compared to the same periods in the prior year, were primarily due to the following:

• Increased early development and study activities;

• Increased compensation and related expenses as a result of increased headcount to support our development activities.

For the six months ended June 30, 2022, these increases were offset by decreased stock-based compensation expense primarily due to the accounting for certain performance-based awards in the prior period.

During the three and six months ended June 30, 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.

For the three and nine months ended September 30, 2022, the increases in research and development expenses, as compared to the same periods in the prior year, were primarily due to the following:

• Increased stock-based compensation expense primarily due to the accounting for certain performance-based awards;

• Increased compensation and related expenses as a result of increased headcount to support our R&D pipeline and development expenses associated with the KARDIA-1 and KARDIA-2 zilebesiran phase 2 studies.

• Decreased clinical research and outside services due to a decrease in clinical batches manufactured.

During the three and nine months ended September 30, 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 the manufacture 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 June 30, Six Months Ended June 30,

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

(In thousands) 2022 2021 2022 2021

4 unchanged sentences

Selling, general and administrative expenses consist of the following:

Three Months Ended June 30, Six Months Ended June 30,

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

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

4 unchanged sentences

Total $ 235,859 $ 142,075 $ 93,784 66 % $ 560,314 $ 434,257 $ 126,057 29 %

For the three months ended June 30, 2022, the increase in selling, general and administrative expenses, as compared to the same period in the prior year, was primarily due to increased compensation and related expenses as a result of increased headcount and increased other expenses to support our commercial portfolio.

For the six months ended June 30, 2022, the increase in selling, general and administrative expenses, as compared to the same period in the prior year, was primarily due to the following:

For the three and nine months ended September 30, 2022, the increases in selling, general and administrative expenses, as compared to the same periods in the prior year, were primarily due to the following:

• Increased stock-based compensation expense primarily due to the accounting for certain performance-based awards;

• Increased compensation and related expenses as a result of increased headcount;

• Increased legal expenses, charitable contributions and other expenses to support our commercial portfolio.

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

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 the initial launch of AMVUTTRA, as well as launch these products into additional markets, assuming regulatory approvals.

• Increased consulting and professional services expenses to support our commercial portfolio.

and EU, as well as launch these products into additional markets, assuming regulatory approvals.

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.

1 unchanged sentence

Other (expense) income consists of the following:

Three Months Ended June 30, Six Months Ended June 30,

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

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

5 unchanged sentences

Other (5,119) (4,389) (730) 17 % (20,720) (14,248) (6,472) 45 %

Loss on the extinguishment of debt (76,586) — (76,586) N/A (76,586) — (76,586) N/A

Total $ (147,903) $ (22,559) $ (125,344) 556 % $ (323,514) $ (77,751) $ (245,763) 316 %

Total other expense increased during the three and six months ended June 30, 2022, as compared to the same periods in 2021, primarily due to increased loss as a result of a mark-to-market adjustment related to the development derivative liability and increased interest expenses due to additional draws on our term loan facility.

For the six months ended June 30, 2022, additional increases, compared to the same period in 2021, were primarily due to realized and unrealized losses on our marketable equity securities holdings.

Total other expense increased during the three and nine months ended September 30, 2022, as compared to the same periods in 2021, primarily due to a $76.6 million loss on the extinguishment of the Blackstone credit agreement, increased loss as a result of a mark-to-market adjustment related to the development derivative liability and increased realized and unrealized losses on our marketable equity securities holdings.

Liquidity and Capital Resources

The following table summarizes our cash flow activities:

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands) 2022 2021

4 unchanged sentences

Net cash used in operating activities (409,296) (491,552)

Net cash (used in) provided by investing activities (4,626) 228,376

Net cash provided by investing activities 309,265 140,105

Net cash provided by financing activities 362,316 954,827

Effect of exchange rate changes on cash, cash equivalents and restricted cash (9,049) (5,968)

Net decrease in cash, cash equivalents and restricted cash (244,418) 249,019

Net increase in cash, cash equivalents and restricted cash 253,236 597,412

Cash, cash equivalents and restricted cash, beginning of period

3 unchanged sentences

Operating activities

Net cash used in operating activities decreased during the six months ended June 30, 2022, compared to the same periods ended June 30, 2021, primarily due to decreased cash disbursements related to working capital payments and stronger cash receipts from increased product sales.

Net cash used in operating activities decreased during the nine months ended September 30, 2022, compared to the same periods ended September 30, 2021, primarily due to decreased cash disbursements related to working capital payments and stronger cash receipts from increased product sales.

Investing activities

Net cash used in investing activities increased during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due to net activities related to our marketable debt securities.

Net cash used in investing activities increased during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to net activities related to our marketable debt securities.

Financing activities

Net cash provided by financing activities decreased during the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily due proceeds of $250.0 million in connection with the second drawdown on our credit agreement, received in June 2021 and a decrease of $79.2 million in net proceeds from the issuance of common stock in connection with stock option exercises and other types of equity.

Net cash provided by financing activities decreased during the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily due to greater cash received in 2021, including $500.0 million received from our sale of one-half of our royalty interest under the Novartis agreement in September 2021 and $250.0 million received in connection with the second drawdown on our credit agreement in June 2021, offset by $136.2 million received from the issuance of convertible debt, net of repayment of credit facility and purchase of capped call transactions in September 2022.

Additional Capital Requirements

We currently have programs focused on a number of therapeutic areas and, as of June 30, 2022, have received regulatory approval and commercially launched four products:

ONPATTRO, GIVLAARI, OXLUMO and AMVUTTRA.

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

We currently have programs focused on a number of therapeutic areas and, as of September 30, 2022, have received regulatory approval and commercially launched four products.

However, our ongoing development efforts may not be successful and we may not be able to commence sales of any other products or successfully expand the indications for our approved products, including ONPATTRO, AMVUTTRA and OXLUMO 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 June 30, 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 June 30, 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, OXLUMO and AMVUTTRA, and to develop, conduct clinical trials for, manufacture and, if approved, commercialize additional product candidates.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.” As of September 30, 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 equity and debt securities as of September 30, 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 our approved products, and to develop, conduct clinical trials for, manufacture and, if approved, commercialize additional product candidates.

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