What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-13 compared with 2024-02-15 · 465 added, 417 removed, 893 unchanged (50% of the section changed)

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Consolidated Statements of Operations and Comprehensive Loss for the Years Ended December 31, 202 4 , 202 3 and 202 2

Consolidated Statements of Stockholders’ (Deficit) Equity for the Years Ended December 31, 2023, 2022 and 2021

Consolidated Statements of Stockholders’ Equity (Deficit) for the Years Ended December 31, 2024, 2023 and 202 2

Consolidated Statements of Cash Flows for the Years Ended December 31, 202 4 , 202 3 and 202 2

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We have audited the accompanying consolidated balance sheets of Alnylam Pharmaceuticals, Inc.

and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, of stockholders’ (deficit) equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes (collectively referred to as the “consolidated financial statements”).

and its subsidiaries (the "Company") as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, of stockholders’ equity (deficit) and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the "consolidated financial statements").

We also have audited the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or

complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

The communication of critical audit matters does not alter in any way our opinion on the consolidated

financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Liability Related to Sale of Future Royalties and Commercial Milestones

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Operating lease right-of-use assets 191,148 199,732

Deferred tax assets

116,863 10,101

Restricted investments 68,593 49,391

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Total assets $ 4,239,983 $ 3,829,880

LIABILITIES AND STOCKHOLDERS’ DEFICIT

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

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Accrued expenses 887,472 713,013

Operating lease liability 41,510 41,967

Operating lease liabilities

41,886 41,510

Deferred revenue 55,481 102,753

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Total current liabilities 1,186,272 967,786

Operating lease liability, net of current portion 243,101 261,339

Operating lease liabilities, net of current portion

229,541 243,101

Deferred revenue, net of current portion — 188,175

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Commitments and contingencies (Note 13)

Stockholders’ deficit:

Stockholders’ equity (deficit):

Preferred stock, $ 0.01 par value per share, 5,000 shares authorized and no shares issued and outstanding as of December 31, 2024 and December 31, 2023

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Accumulated deficit ( 7,287,748 ) ( 7,009,591 )

Total stockholders’ deficit

Total stockholders’ equity (deficit)

67,088 ( 220,644 )

Total liabilities and stockholders’ deficit

Total liabilities and stockholders’ equity (deficit)

$ 4,239,983 $ 3,829,880

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(In thousands, except per share amounts)

Year Ended December 31,

Years Ended December 31,

2024 2023 2022

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Loss before income taxes ( 377,375 ) ( 433,517 ) ( 1,126,993 )

Provision for income taxes ( 6,725 ) ( 4,163 ) ( 680 )

Benefit from (provision for) income taxes 99,218 ( 6,725 ) ( 4,163 )

Net loss $ ( 278,157 ) $ ( 440,242 ) $ ( 1,131,156 )

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Other comprehensive income (loss):

Unrealized gain (loss) on marketable securities 11,018 ( 7,840 ) ( 1,978 )

Foreign currency translation gain (loss) 11,922 ( 5,274 ) 11,398

Unrealized (loss) gain on marketable securities ( 4 ) 11,018 ( 7,840 )

Foreign currency translation (loss) gain ( 9,643 ) 11,922 ( 5,274 )

Defined benefit pension plans, net of tax ( 1,496 ) ( 1,661 ) 1,719

Total other comprehensive income (loss) 21,279 ( 11,395 ) 10,363

Total other comprehensive (loss) income ( 11,143 ) 21,279 ( 11,395 )

Comprehensive loss $ ( 289,300 ) $ ( 418,963 ) $ ( 1,142,551 )

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ALNYLAM PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY

(In thousands, except share amounts)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands)

Common Stock Additional

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Stockholders’

(Deficit) Equity

Equity (Deficit)

Shares Amount

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Stock-based compensation expense — — 237,399 — — 237,399

Other comprehensive gain — — — 10,363 — 10,363

Purchase of capped calls related to convertible debt — — ( 118,611 ) — — ( 118,611 )

Other comprehensive loss — — — ( 11,395 ) — ( 11,395 )

Net loss — — — — ( 1,131,156 ) ( 1,131,156 )

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Stock-based compensation expense — — 225,865 — — 225,865

Purchase of capped calls related to convertible debt — — ( 118,611 ) — — ( 118,611 )

Other comprehensive loss — — — ( 11,395 ) — ( 11,395 )

Other comprehensive income — — — 21,279 — 21,279

Net loss — — — — ( 440,242 ) ( 440,242 )

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Stock-based compensation expense — — 275,317 — — 275,317

Other comprehensive gain — — — 21,279 — 21,279

Other comprehensive loss — — — ( 11,143 ) — ( 11,143 )

Net loss — — — — ( 278,157 ) ( 278,157 )

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(In thousands)

Year Ended December 31,

Years Ended December 31,

2024 2023 2022

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Net loss $ ( 278,157 ) $ ( 440,242 ) $ ( 1,131,156 )

Non-cash adjustments to reconcile net loss to net cash used in operating activities:

Non-cash adjustments to reconcile net loss to net cash (used in) provided by operating activities:

Depreciation and amortization 56,670 54,054 44,468

Amortization and interest accretion related to operating leases 42,977 41,082 42,127

Non-cash interest expense on liability related to the sale of future royalties 127,133 106,554 104,200

Stock-based compensation 272,084 221,680 230,649

Realized and unrealized loss (gain) on marketable equity securities 16,944 33,312 ( 55,695 )

Realized and unrealized losses on marketable equity securities 3,022 16,944 33,312

Loss on extinguishment of debt — — 76,586

Change in fair value of development derivative liability 170,770 90,997 94,659

Deferred income taxes ( 106,762 ) ( 713 ) ( 1,433 )

Other ( 38,988 ) ( 2,379 ) ( 177 )

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Accounts payable, accrued expenses and other liabilities 91,093 80,840 191,769

Operating lease liability ( 46,502 ) ( 43,171 ) ( 40,352 )

Deferred revenue ( 235,446 ) 55,022 ( 65,911 )

Net cash provided by (used in) operating activities 104,156 ( 541,274 ) ( 641,693 )

Net cash (used in) provided by operating activities ( 8,312 ) 104,156 ( 541,274 )

Cash flows from investing activities:

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Purchases of capped calls related to convertible debt — — ( 118,611 )

Proceeds from the sale of future royalties — — 500,000

Proceeds from development derivative 24,667 31,000 19,600

(Repayment of) proceeds from term loan facility — ( 762,107 ) 500,000

Other financing activities — — ( 18,750 )

(Repayment of) proceeds from development derivative liability, net ( 8,792 ) 24,667 31,000

Repayment of term loan facility — — ( 762,107 )

Net cash provided by financing activities 294,159 172,131 425,753

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 15,239 ) 6,391 ( 7,430 )

Net (decrease) increase in cash, cash equivalents and restricted cash ( 53,672 ) 46,403 323,107

Net increase (decrease) in cash, cash equivalents and restricted cash 153,768 ( 53,672 ) 46,403

Cash, cash equivalents and restricted cash, beginning of period 814,884 868,556 822,153

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Cash paid for interest $ 67,578 $ 32,118 $ 45,235

Cash paid for income taxes $ 14,360 $ 6,021 $ 2,654

Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 9,309 $ 2,570 $ 1,013

Supplemental disclosure of noncash investing activities:

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Alnylam Pharmaceuticals, Inc.

(also referred to as Alnylam, we, our or us) commenced operations on June 14, 2002 as a biopharmaceutical company seeking to develop and commercialize novel therapeutics based on ribonucleic acid interference, or RNAi.

(also referred to as Alnylam, the Company, we, our or us) commenced operations on June 14, 2002 as a biopharmaceutical company seeking to develop and commercialize novel therapeutics based on ribonucleic acid interference, or RNAi.

We are committed to the advancement of our company strategy of building a multi-product, global, commercial biopharmaceutical company with a deep and sustainable clinical pipeline of RNAi therapeutics for future growth and a robust, organic research engine for sustainable innovation and great potential for patient impact.

Since inception, we have focused on discovering, developing and commercializing RNAi therapeutics by establishing and maintaining a strong intellectual property position in the RNAi field, establishing strategic alliances with leading pharmaceutical and life sciences companies, generating revenues through licensing agreements, and ultimately developing and commercializing RNAi therapeutics globally, either independently or with our strategic partners.

Since inception, we have focused on discovering, developing and commercializing RNAi therapeutics by establishing and maintaining a strong intellectual property position in the RNAi field, establishing strategic collaborations with leading pharmaceutical and life sciences companies, generating revenues through licensing agreements, and ultimately developing and commercializing RNAi therapeutics globally, either independently or with our strategic collaborators.

We have devoted substantially all of our efforts to business planning, research, development, manufacturing and commercial efforts, acquiring, filing and expanding intellectual property rights, recruiting management and technical staff, and raising capital.

In early 2021, we launched our Alnylam P 5 x25 strategy, which focuses on our planned transition to a top-tier biotech company 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, while delivering exceptional financial performance and driving profitability.

As of December 31, 2023, we have five marketed products, including one collaborated product, and multiple late-stage investigational programs advancing towards potential commercialization.

With Alnylam P 5 x25 , we aim to deliver transformative therapies across a broad range of disease areas and indications for patients around the world through sustainable innovation, while delivering exceptional financial performance.

As of December 31, 2024, we have five marketed products, including one product commercialized by a collaborator, and multiple late-stage investigational programs advancing towards potential commercialization.

We currently generate worldwide product revenues from four commercialized products, ONPATTRO, AMVUTTRA, GIVLAARI and OXLUMO, primarily in the United States, or U.S., and Europe.

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All intercompany accounts and transactions have been eliminated.

Certain prior period amounts in the consolidated financial statements have been reclassified to conform to the current period presentation.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

In our consolidated financial statements, we use estimates and assumptions related to our inventory valuation and related reserves, liability related to the sale of future royalties, development derivative liability, income taxes, deferred tax asset valuation allowances, revenue recognition, research and development expenses, and stock-based compensation.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

In our consolidated financial statements, we use estimates and assumptions related to our inventory valuation and related reserves, clinical accruals, liability related to the sale of future royalties, development derivative liability, income taxes, deferred tax asset valuation allowances, revenue recognition, research and development expenses, and stock-based compensation expense.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable.

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Changes in estimates are reflected in reported results in the period in which they become known.

Based on our current operating plan, we believe that our cash, cash equivalents and marketable securities as of December 31, 2023 will be sufficient to satisfy our working capital and operating needs for at least the next 12 months from the filing of this Annual Report on Form 10-K.

Based on our current operating plan, we believe that our cash, cash equivalents and marketable securities as of December 31, 2024 will be sufficient to satisfy our near-term capital and operating needs for at least the next 12 months from the filing date of this Annual Report on Form 10-K.

Concentrations of Credit Risk and Significant Customers

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During the years ended December 31, 2024, 2023 and 2022, our revenues were generated primarily from product sales to customers and collaborations with strategic partners.

For the years ended December 31, 2023, 2022 and 2021, our gross accounts receivable balance was comprised of payments primarily due from customers for product sales and our strategic partners.

As of December 31, 2024 and 2023, our gross accounts receivable balance was comprised of payments primarily due from customers for product sales and our collaborators.

ALNYLAM PHARMACEUTICALS, INC.

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The following table summarizes customers that represent 10% or greater of our consolidated total gross revenues:

Year Ended December 31,

Years Ended December 31,

2024 2023 2022

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Distributor A 16 % 16 %

Distributor B * 10 %

__________________________________________

* Represents less than 10%

Fair Value Measurements

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Investments in Marketable Securities and Cash Equivalents

We invest our excess cash balances in marketable debt securities and classify our investments as either held-to-maturity or available-for-sale based on facts and circumstances present at the time we purchased the securities.

As of December 31, 2023 and 2022, we classified all of our investments in debt securities as available-for-sale and as current assets as they represent the investment of funds available for current operations.

We invest our excess cash balances in marketable debt securities and classify our investments as either trading, held-to-maturity or available-for-sale based on facts and circumstances present at the time we purchased the securities.

As of December 31, 2024 and 2023, we classified all of our investments in debt securities as available-for-sale and as current assets on the consolidated balance sheets as they represent the investment of funds available for current operations.

We report available-for-sale debt securities at fair value at each balance sheet date, for which fair value measurement data is obtained from independent pricing services, and include any unrealized holding gains and losses (the adjustment to fair value) in accumulated other comprehensive loss.

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We measure marketable equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of an investee), which have readily available prices, at fair value with changes in fair value recognized in other expense, net on our consolidated statements of operations and comprehensive loss.

Accounts Receivable

We record accounts receivable net of customer allowances for distribution services, prompt payment discounts and chargebacks based on contractual terms.

Accounts Receivable, Net

We record accounts receivable net of prompt payment discounts and chargebacks based on contractual terms.

As of December 31, 2024 and 2023, based on our estimation of expected write-offs, we determined an allowance for doubtful accounts was not material.

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Accounts receivable, net on our consolidated balance sheets also includes billed and unbilled collaboration receivables and royalty receivables.

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Inventory is measured at the lower of cost or estimated net realizable value and classified based on the anticipation of when it will be consumed either within our normal operating cycle (short-term) or beyond (long-term).

We use a standard cost basis, which approximates cost determined on a first-in, first-out basis.

Inventory costs include all raw materials, direct conversion costs and overhead.

Inventory costs include all raw materials, direct conversion

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

costs and overhead.

Raw and intermediate materials that may be used for either research and development or commercial purposes are classified as inventory until the material is consumed or otherwise allocated for research and development.

If the material is used for research and development, it is expensed as research and development once that determination is made.

If the material is used for research and development, it is recorded as research and development expenses once that determination is made.

We capitalize inventory costs that are expected to be sold commercially once we determine it is probable that the inventory costs will be recovered through commercial sale based on the review of several factors, including (i) the likelihood that all required regulatory approvals will be received, considering any special filing status, (ii) the expected timing of validation (if not yet completed) of manufacturing processes in the associated facility, (iii) the expected expiration of the inventory, (iv) logistical or commercial constraints that may impede the timely distribution and sale of the product, including transport requirements and reimbursement status, (v) current market factors, including competitive landscape and pricing, (vi) threatened or anticipated litigation challenges, (vii) history of approvals of similar products or formulations, and (viii) FDA (or other appropriate regulatory agencies) correspondence regarding the safety and efficacy of the product.

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We periodically review inventory levels to identify what may expire prior to expected sale or has a cost basis in excess of its estimated realizable value and write down such inventories as appropriate.

Property, Plant and Equipment

Property, Plant and Equipment, Net

Property, plant and equipment are stated at cost, net of accumulated depreciation.

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Asset Category Useful Life

Laboratory equipment 5

Laboratory equipment 5 years

Computer equipment and software 3 - 10 years

Furniture and fixtures 5

Furniture and fixtures 5 years

Leasehold improvements Shorter of asset life or lease term

Manufacturing Equipment 7-15 years

Manufacturing equipment

Buildings 40 years

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All of our leases are classified as operating leases.

W e record operating lease assets and lease liabilities in our consolidated balance sheets.

Operating lease assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the leasing arrangement.

Operating lease assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

Operating lease right-of-use assets represent our right to use an underlying asset for the lease term and operating lease liabilities represent our obligation to make lease payments arising from the leasing arrangement.

Operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

As most of our leases do not provide an implicit rate, in determining the operating lease liabilities, we use an estimate of our incremental borrowing rate based on the information available at commencement.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Short-term leases, or leases that have a lease term of 12

Operating lease right-of-use assets are measured as the lease liability plus initial direct costs and prepaid lease payments less lease incentives.

Single lease cost is recognized on a straight-line basis over the lease term.

We do not separate non-lease components from lease components for all classes of underlying assets.

Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets, and the respective lease cost is recognized in the consolidated statements of operations and comprehensive loss on a straight-line basis over the term of the lease.

Clinical Accruals

We record accrued liabilities related to products we have received or services that we have incurred, specifically related to ongoing preclinical studies and clinical trials, for which service providers have not yet billed us, or when billing terms under these contracts do not coincide with the timing of when the work is performed, on our consolidated balance sheets.

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

months or less at commencement date, are excluded from this treatment and are recognized on a straight-line basis over the term of the lease.

Clinical Accruals

We record accrued liabilities related to products we have received or services that we have incurred, specifically related to ongoing pre-clinical studies and clinical trials, for which service providers have not yet billed us, or when billing terms under these contracts do not coincide with the timing of when the work is performed, as of our period-end.

These costs primarily relate to third-party clinical management costs, laboratory and analysis costs, toxicology studies and investigator fees.

The assessment of these costs is a subjective process, requiring judgment based on our knowledge of the research and development programs, services performed for the period, experience with related activities and the expected duration of the third-party service contract, where applicable.

Upon settlement, these costs may differ materially from the amounts accrued in our consolidated financial statements.

Our historical accrual estimates have not been materially different from our actual costs.

primarily relate to third-party clinical management costs, laboratory and analysis costs, toxicology studies and investigator fees.

The assessment of these costs requires judgment based on our knowledge of the research and development programs, services performed for the period, experience with related activities and the expected duration of the third-party service contract, where applicable.

Revenue Recognition

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We record reserves for rebates in the same period the related product revenue is recognized, resulting in a reduction of product revenues and a current liability that is included in accrued expenses on our consolidated balance sheet.

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

estimate for rebates is based on statutory discount rates, expected utilization or an estimated number of patients on treatment, as applicable.

Our estimate for rebates is based on statutory discount rates, expected utilization or an estimated number of patients on treatment, as applicable.

Trade discounts and allowances :

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We estimate the amount of product that will be returned based on our sales history.

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Other incentives:

Other incentives include co-payment assistance we provide to patients with commercial insurance that have coverage and reside in states that allow co-payment assistance.

We estimate the average co-payment assistance amounts for our products based on expected customer demographics and record any such amounts within accrued expenses on our consolidated balance sheet.

Other incentives include customer discounts, fees, and co-payment assistance we provide to patients with commercial insurance that have coverage and reside in states that allow co-payment assistance.

We estimate discounts and fees based on contract terms and other relevant factors, and we estimate the average co-payment assistance amounts for our products based on expected customer demographics.

We record any such amounts within accrued expenses on our consolidated balance sheets.

Net Revenues from Collaborations

We earn revenue in connection with collaboration agreements which allow our collaborators to utilize our technology platforms and develop product candidates.

We earn revenue in connection with collaboration agreements that allow our collaborators to utilize our technology platforms and develop product candidates.

Our significant collaboration agreements are detailed in Note 4, Net Revenues from Collaborations.

For each collaborators, we discuss our revenue recognition, including our significant performance obligations under each agreement.

For each collaborator, we discuss our revenue recognition, including our significant performance obligations under each agreement.

At contract inception, we assess whether the collaboration arrangements are within the scope of ASC 606 or ASC Topic 808, Collaborative Arrangements , or ASC 808, to determine whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities.

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Cost of Goods Sold

Cost of goods sold includes the cost of producing and distributing inventories that are related to product revenues during the respective period (including salary-related and stock-based compensation expenses for employees involved with production and distribution, freight and indirect overhead costs), third-party royalties payable on our net product revenues and amortization of intangible assets associated with the sale of our products.

Cost of goods sold includes the cost of producing and distributing inventories that are related to product revenues during the respective period (including salaries and related costs, stock-based compensation expenses and benefits for employees involved with production and distribution, supplies, external services, freight and indirect overhead costs), third-party royalties payable on our net product revenues and amortization of intangible assets associated with the sale of our products.

Cost of goods sold may also include costs related to excess or obsolete inventory adjustment charges, abnormal costs, unabsorbed manufacturing and overhead costs, and manufacturing variances.

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cost of Collaborations and Royalties

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Deferred tax assets and liabilities are measured using enacted rates in effect for the year in which these temporary differences are expected to be recovered or settled.

Valuation allowances are provided if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Valuation allowances

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

are provided if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Uncertain tax positions, for which management’s assessment is that there is a more than 50% probability of sustaining the position upon challenge by a taxing authority based upon its technical merits, are subject to certain recognition and measurement criteria.

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We record research and development expenses as incurred.

Included in research and development expenses are wages, stock-based compensation expenses, benefits and other operating costs, facilities, supplies, external services, clinical trial and manufacturing costs, certain costs related to our collaboration arrangements, and overhead directly related to our research and development operations, as well as costs to acquire technology licenses.

Included in research and development expenses are salaries and related costs, stock-based compensation expenses, benefits and other operating costs, facilities, supplies, external services, clinical trial and manufacturing costs, certain costs related to our collaboration arrangements, and overhead directly related to our research and development operations, as well as costs to acquire technology licenses.

We have entered into several license agreements for rights to utilize certain technologies.

The terms of the licenses may provide for upfront payments, annual maintenance payments, milestone payments based upon certain specified events being achieved and royalties on product sales.

We charge costs to acquire and maintain licensed technology that has not reached technological feasibility and does not have alternative future use to research and development expense as incurred.

During the years ended December 31, 2023, 2022 and 2021, we charged to research and development expense costs associated with license fees of $ 5.8 million, $ 7.3 million and $ 16.8 million, respectively.

We charge costs to acquire and maintain licensed technology that has not reached technological feasibility and does not have alternative future use to research and development expenses as incurred.

Stock-Based Compensation

We recognize stock-based compensation expense for grants under our stock incentive plans and employee stock purchase plan.

We account for all stock-based awards granted to employees at their fair value and recognize compensation expense over the vesting period of the award.

We account for all stock-based awards granted to employees at their fair value and recognize compensation expense over each employee’s requisite service period, which is generally the vesting period of the award.

Determining the amount of stock-based compensation to be recorded requires us to develop estimates of fair values of stock awards as of the grant date.

We calculate the grant date fair values of stock options using the Black-Scholes valuation model, which requires the input of subjective assumptions, including but not limited to expected stock price volatility over the term of the awards and the expected term of stock options.

We calculate the grant date fair values of stock options using the Black-Scholes valuation model, which requires us to make assumptions, including but not limited to expected stock price volatility over the term of the awards and the expected term of stock options.

The fair value of restricted stock awards granted to employees is based upon the quoted closing market price per share on the date of grant.

We have performance conditions included in certain of our restricted stock awards that are based upon the achievement of pre-specified clinical development, regulatory, commercial and/or financial performance events.

As the outcome of each event has inherent risk and uncertainties, and a positive outcome may not be known until the event is achieved, we begin to recognize the value of the performance-based restricted stock awards when we determine the achievement of each performance condition is deemed probable, a determination which requires significant judgment by management.

At the probable date, we record a cumulative expense catch-up, with remaining expense amortized over the remaining service period.

As the outcome of each event has inherent risk and uncertainties, and a positive outcome may not be known until the event is achieved, we begin to recognize the grant-date fair value of the performance-based restricted stock awards when we determine the achievement of each performance condition is deemed probable, a determination which requires significant judgment by management.

On the date the performance condition is deemed probable, we record a cumulative expense catch-up, with remaining expense amortized over the remaining service period.

Advertising Expenses

We expense the costs of advertising as incurred.

Advertising expenses were $ 29.7 million, $ 12.4 million and $ 11.7 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Liability Related to the Sale of Future Royalties

We account for the liability related to the sale of future royalties as a debt financing, as we have significant continuing involvement in the generation of the cash flows.

Interest on the liability related to the sale of future royalties will be recognized using the effective interest rate method over the life of the related royalty stream.

The liability related to the sale of future royalties and the related interest expense are based on our current estimates of future royalties and commercial milestones expected to be paid over the life of the arrangement, which we determine by using third-party forecasts of Leqvio’s global net revenue.

We will periodically assess the expected payments and to the extent the amount or timing of our future estimated payments is materially different than our previous estimates, we will account for any such change by adjusting the liability related to the sale of future royalties and prospectively recognizing the related non-cash interest expense.

We account for the liability related to the sale of future royalties as a debt financing.

Interest on the liability related to the sale of future royalties is recognized using the effective interest rate method over the life of the related royalty stream.

We periodically assess the expected payments and to the extent the amount or timing of our future estimated payments is materially different than our previous estimates, we account for any such change by prospectively adjusting the effective interest rate and related non-cash interest expense.

Development Derivative Liability

Development derivative liability is recorded at fair value based on the probability-weighted present value of the estimated cash flows pursuant to contractual terms of the funding agreement within accrued expenses or other liabilities on our consolidated balance sheets, depending on expected timing of our payments.

The liability is remeasured quarterly with any change in fair value recorded in other expense, net on the consolidated statements of operations and comprehensive loss.

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Development Derivative Liability

Development derivative liability is recorded at fair value based on the probability weighted present value of the estimated cash flows pursuant to contractual terms of the funding agreement.

The liability is remeasured quarterly with any change in fair value recorded in other expense on the consolidated statements of operations and comprehensive loss.

Comprehensive Loss

Comprehensive loss is comprised of net loss and certain changes in stockholders’ deficit that are excluded from net loss.

We include unrealized gains and losses on certain marketable securities in other comprehensive loss, including changes in the value of our marketable debt securities, foreign currency translation adjustments in other comprehensive (if the functional currency is not the U.S.

dollar) and certain changes in the fair value of the plan assets and projected benefit obligation attributed to our defined benefit pension plan.

Net Loss per Common Share

We compute basic net loss per common share by dividing net loss by the weighted-average number of common shares outstanding.

We compute diluted net loss per common share by dividing net loss by the weighted-average number of common shares and dilutive potential common share equivalents then outstanding during the period.

In the diluted net loss per share calculation, net loss is adjusted for the elimination of interest expense on the convertible debt.

Potential common shares consist of shares issuable upon the vesting of restricted stock units, the exercise of stock options (the proceeds of which are then assumed to have been used to repurchase outstanding shares using the treasury stock method) and upon conversion of the convertible debt outstanding during the period (calculated using the if-converted method assuming the conversion of the convertible debt as of the earliest period reported or at the date of issuance, if later).

Because the inclusion of potential common shares would be anti-dilutive for periods presenting a net loss, diluted net loss per common share is the same as basic net loss per common share.

The following table sets forth the potential common shares (prior to consideration of the treasury stock or if-converted methods) excluded from the calculation of net loss per common share because their inclusion would be anti-dilutive:

Comprehensive loss is comprised of net loss and certain changes in stockholders’ equity (deficit) that are excluded from net loss.

Other comprehensive income (loss) includes unrealized holding gains and losses on marketable debt securities classified as available-for-sale, foreign currency translation adjustments (if the functional currency is not the U.S.

dollar), and certain changes in the fair value of the plan assets and projected benefit obligations attributed to our defined benefit pension plan.

Net Income (Loss) per Common Share

We compute basic net income (loss) per common share by dividing net income (loss) by the weighted-average number of common shares outstanding.

Diluted net income per common share utilizing the treasury stock and if-converted methods is based upon the weighted-average number of common shares and dilutive potential common share equivalents outstanding during the period.

For periods in which we have generated a net loss, diluted net loss per common share is the same as basic net loss per common share, as the inclusion of potentially dilutive common shares would be anti-dilutive.

The following table sets forth the potential common shares (prior to consideration of the treasury stock or if-converted methods) excluded from the calculation of diluted net loss per common share because their inclusion would be anti-dilutive:

As of December 31,

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Total 11,431 13,096 13,527

Segment Information

We operate in a single reporting segment, the discovery, development and commercialization of RNAi therapeutics.

Consistent with our management reporting, results of our operations are reported on a consolidated basis for purposes of segment reporting.

As of December 31, 2023 and 2022, substantially all of our consolidated property, plant and equipment, net, was from U.S.

For the years ended December 31, 2023, 2022 and 2021, net revenues from collaborations were attributed to the U.S.

Please read Note 3 for information regarding our net product sales by geography.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standard Update 2023-09, Improvements to Income Tax Disclosures which requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction.

In November 2024, the Financial Accounting Standards Board, or FASB, issued ASU 2024-04, Induced Conversions of Convertible Debt Instruments, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishment of convertible debt.

The standard is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual periods.

We are currently evaluating the impact of the standard on our consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses , which is intended to improve disclosures by requiring additional information about specific expense categories in the notes to the financial statements on an annual and interim basis.

The standard will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

The standard updates may be applied on either a prospective or retrospective basis.

We are currently evaluating the disclosure requirements related to this new standard.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , which requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction.

The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively.

The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the disclosure requirements related to the new standard.

In November 2023, the FASB issued Accounting Standard Update 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses.

The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendments should be applied retrospectively to all prior periods presented in the financial statements.

We are evaluating the disclosure requirements related to the new standard.

We are currently evaluating the disclosure requirements related to this new standard.

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures , which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses.

The standard became effective for us in the fourth quarter of 2024.

Please refer to Note 16, Segment Information, for additional disclosures related to this new standard.

ALNYLAM PHARMACEUTICALS, INC.

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Net product revenues, classified based on the geographic region in which the product is sold, consist of the following:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2024 2023 2022

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Total net product revenues $ 1,646,228 $ 1,241,474 $ 894,329

As of December 31, 2023 and 2022, net product revenue-related receivables of $ 210.1 million and $ 203.8 million , respectively, were included in “Accounts receivable, net.”

As of December 31, 2024 and 2023, net product revenue-related receivables of $ 269.9 million and $ 210.1 million , respectively, were included in accounts receivable, net on our consolidated balance sheets.

The following table summarizes balances and activity in each product revenue allowance and reserve category:

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Net revenues from collaborations consist of the following:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2024 2023 2022

9 unchanged sentences

$ 102,743 $ 99,576

Contract liabilities included in “Deferred revenue”

Contract liabilities included in deferred revenue and deferred revenue, net of current portion

$ 55,481 $ 290,763

We recognized revenue of $ 40.5 million and $ 55.5 million in the years ended December 31, 2023 and 2022, respectively, that was included in the contract liability balance at the beginning of the period.

We recognized revenue of $ 266.5 million and $ 40.5 million in the years ended December 31, 2024 and 2023, respectively, that was included in the contract liability balance at the beginning of the applicable period.

To determine revenue recognized in the period from contract liabilities, we first allocate revenue to the individual contract liability balance outstanding at the beginning of the period until the revenue exceeds that balance.

If additional consideration is received on those contracts in subsequent periods, we assume all revenue recognized in the reporting period first applies to the beginning contract liability as opposed to a portion applying to the new consideration for the period.

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

Year Ended December 31,

The following table provides research and development expenses incurred by type, for which we recognize net revenues, that are directly attributable to our collaboration agreements, by collaborator:

Years Ended December 31,

2024 2023 2022

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Total $ 132,150 $ 21,705 $ 19,054 $ 79,510 $ 8,963 $ 38,542 $ 13,082 $ 2,820 $ 28,272

The research and development expenses incurred for the agreements included in the table above consist of costs incurred for (i) clinical expenses, including manufacturing of clinical product, (ii) external services, including consulting services and lab supplies and services, and (iii) other expenses, including professional services, facilities and overhead allocations, and a reasonable estimate of compensation and related costs as billed to our counterparties, for which we recognize net revenues from

The research and development expenses incurred for the agreements included in the table above consist of costs incurred for (i) clinical and manufacturing expenses, including manufacturing of clinical and preclinical product, (ii) external services, including consulting services and lab supplies and services, and (iii) other expenses, including professional services, facilities and overhead allocations, and a reasonable estimate of compensation and related costs as billed to our counterparties, for which

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

collaborations.

we recognize net revenues from collaborations.

For the years ended December 31, 2024, 2023 and 2022, we did not incur material selling, general and administrative expenses related to our collaboration agreements.

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Hoffmann-La Roche Ltd.

and Genentech, Inc., or, collectively, Roche, pursuant to which we and Roche established a worldwide, strategic collaboration for the joint development of pharmaceutical products containing zilebesiran.

Zilebesiran is our investigational siRNA therapeutic targeting liver-expressed angiotensinogen, which is in Phase 2 clinical trials for the treatment of hypertension.

and Genentech, Inc., or, collectively, Roche, pursuant to which we and Roche established a worldwide, strategic collaboration for the joint development of zilebesiran.

Zilebesiran is our investigational small interfering RNA, or siRNA, therapeutic targeting liver-expressed angiotensinogen, which is currently in Phase 2 clinical development for the treatment of hypertension.

Under the Roche Agreement, we granted to Roche (i) co-exclusive rights to develop zilebesiran worldwide and commercialize zilebesiran in the U.S., referred to as the Co-Commercialization Territory, (ii) exclusive rights to commercialize zilebesiran outside of the U.S., referred to as the Roche Territory, and (iii) non-exclusive rights to manufacture zilebesiran for the development and commercialization of zilebesiran in the Roche Territory.

In connection with the Roche Agreement, Roche made an upfront, non-refundable payment of $ 310.0 million.

In addition, we will be eligible to receive up to $ 1.24 billion in contingent payments based on the achievement of specified development and regulatory milestones and up to $ 1.28 billion in sales-based milestones.

We will lead the global clinical development for zilebesiran.

We will be responsible for forty percent ( 40 %) and Roche will be responsible for the remaining sixty percent ( 60 %) of development costs incurred in the conduct of development activities that support regulatory approval of zilebesiran globally.

We and Roche will share equally ( 50 / 50 ) all costs incurred in connection with development activities that are conducted to support regulatory approval of zilebesiran solely in the Co-Commercialization Territory if incremental development activities are needed.

Roche will be solely responsible for all costs incurred in the conduct of development activities primarily to support regulatory approval in the Roche Territory if incremental development activities are needed.

Upon regulatory approval Roche has the exclusive right to commercialize zilebesiran in the Roche Territory and will pay us tiered, low double-digit royalties based on net sales of zilebesiran on a country-by-country and product-by-product basis during the applicable royalty term.

We and Roche will co-commercialize zilebesiran in the Co-Commercialization Territory and share equally ( 50 / 50 ) profits and losses (including commercialization costs).

Roche has the right to terminate the Roche Agreement for any or no reason at all upon prior written notice, however, if the termination notice occurs after the achievement of the first development milestone and before the achievement of the third development milestone, Roche is required to pay us a termination fee of $ 50.0 million.

In connection with the Roche Agreement, Roche made an upfront, non-refundable payment to us of $ 310.0 million.

We lead the global clinical development for zilebesiran.

We are responsible for forty percent ( 40 %) and Roche is responsible for the remaining sixty percent ( 60 %) of development costs incurred in the conduct of development activities that support regulatory approval of zilebesiran globally.

We and Roche share equally ( 50 / 50 ) all costs incurred in connection with development activities that are conducted to support regulatory approval of zilebesiran solely in the Co-Commercialization Territory if incremental development activities are needed.

Roche is solely responsible for all costs incurred in the conduct of development activities that primarily support regulatory approval in the Roche Territory.

Upon regulatory approval, Roche has the exclusive right to commercialize zilebesiran in the Roche Territory and will pay us tiered, low double-digit royalties based on net sales of zilebesiran on a country-by-country basis during the applicable royalty term.

We and Roche will co-commercialize zilebesiran in the Co-Commercialization Territory and share equally ( 50 / 50 ) in profits and losses (including commercialization costs).

Roche has the right to terminate the Roche Agreement for any or no reason at all upon prior written notice;

however, if the termination occurs after the achievement of the first development milestone and before the achievement of the third development milestone, Roche is required to pay us a termination fee of $ 50.0 million.

In addition, either party may terminate the Roche Agreement for a material breach by, or insolvency of, the other party, subject to a cure period.

Unless earlier terminated pursuant to its terms, the Roche Agreement commences on the Effective Date and will remain in effect until expiration on a country-by-country and product-by-product basis (a) in the Roche Territory, upon expiration of the applicable royalty term for such product in the applicable country and (b) in the Co-Commercialization Territory, upon expiration of the term of the co-commercialization efforts for the applicable product.

Due to the uncertainty of pharmaceutical development and the high historical failure rates generally associated with drug development, we may not receive any milestone, royalty or profit share payments from Roche under the Roche Agreement.

We evaluated the Roche Agreement and concluded that the Roche Agreement had elements that were within the scope of ASC 606, Revenue from Contracts with Customers and ASC 808, Collaborative Arrangements .

Unless earlier terminated pursuant to its terms, the Roche Agreement will remain in effect until expiration on a country-by-country basis (a) in the Roche Territory, upon expiration of the applicable royalty term in the applicable country and (b) in the Co-Commercialization Territory, upon expiration of the term of the co-commercialization efforts.

We evaluated the Roche Agreement and concluded that the Roche Agreement had elements that were within the scope of ASC 606 and ASC 808.

As of the Effective Date, we identified the following promises in the Roche Agreement that were evaluated under the scope of ASC 606:

delivery of (i) a co-exclusive license to develop zilebesiran worldwide and commercialize zilebesiran within the Co-Commercialization Territory, a non-exclusive license to manufacture zilebesiran in the Roche Territory solely for purposes of developing and commercializing zilebesiran in the Roche Territory, and an exclusive license to commercialize zilebesiran in the Roche Territory, collectively referred to as Roche License Obligation, (ii) development services, including the manufacture of clinical supply, that support regulatory approval of zilebesiran, referred to as the Roche Development Services Obligation, and (iii) technology transfer of the existing manufacturing process for zilebesiran, referred to as the Roche Technology Transfer Obligation.

(i) a co-exclusive license to develop zilebesiran worldwide and commercialize zilebesiran within the Co-Commercialization Territory, a non-exclusive license to manufacture zilebesiran in the Roche Territory solely for purposes of developing and commercializing zilebesiran in the Roche Territory, and an exclusive license to commercialize zilebesiran in the Roche Territory, collectively referred to as Roche License Obligation, (ii) development services, including the manufacture of clinical supply, that support regulatory approval of zilebesiran, referred to as the Roche Development Services Obligation, and (iii) a technology transfer of the existing manufacturing process for zilebesiran, referred to as the Roche Technology Transfer Obligation.

The three performance obligations under the Roche Agreement are collectively referred to as the Roche Performance Obligations.

We also evaluated whether certain options outlined within the Roche Agreement represented material rights that would give rise to a performance obligation and concluded that none of the options convey a material right to Roche and therefore are not considered separate performance obligations within the Roche Agreement.

We assessed the above promises and determined that the Roche License Obligation, Roche Development Services Obligation and Roche Technology Transfer Obligation are reflective of a vendor-customer relationship and therefore represent performance obligations within the scope of ASC 606.

The Roche License Obligation is considered functional intellectual property and distinct from other promises under the contract as Roche can benefit from the licenses on its own or together with

We also evaluated whether certain options outlined within the Roche Agreement represented material rights that would give rise to a performance obligation and concluded that none of the options convey a material right to Roche and therefore were not considered separate performance obligations within the Roche Agreement.

We assessed the above promises and determined that the Roche License Obligation, Roche Development Services Obligation and Roche Technology Transfer Obligation were reflective of a vendor-customer relationship and therefore represented performance obligations within the scope of ASC 606.

The Roche License Obligation was considered functional intellectual property and distinct from other promises under the contract, as Roche can benefit from the licenses on its own or together with other readily available resources.

As the licenses were delivered at the same time, they were considered one performance obligation at contract inception.

The Roche Development Services Obligation was considered distinct as Roche could benefit from the development services together with the licenses transferred by us at the inception of the agreement.

The development services are not expected to significantly modify or customize the initial intellectual property as zilebesiran was in Phase 2 of clinical development at contract inception.

The Roche Technology Transfer Obligation was distinct as Roche can benefit from the manufacturing license transferred by us at the inception of the agreement given the advancements of our RNAi

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

other readily available resources.

As the licenses are delivered at the same time, they are considered one performance obligation at contract inception.

The Roche Development Services Obligation is considered distinct as Roche can benefit from the development services together with the licenses transferred by us at the inception of the agreement.

The development services are not expected to significantly modify or customize the initial intellectual property as zilebesiran is in the second phase of clinical development.

The Roche Technology Transfer Obligation is distinct as Roche can benefit from the manufacturing license transferred by us at the inception of the agreement given the advancements of our RNAi platform and our utilization of third-party contract manufacturing organizations to manufacture zilebesiran.

Therefore, each represents a separate performance obligation within the contract with a customer under the scope of ASC 606 at contract inception.

platform and our utilization of third-party contract manufacturing organizations to manufacture zilebesiran.

Therefore, each represented a separate performance obligation within the contract with a customer under the scope of ASC 606 at contract inception.

We consider the collaborative activities associated with the co-commercialization of zilebesiran in the U.S.

to be a separate unit of account within the scope of ASC 808 as we and Roche are both active participants in the commercialization activities and are exposed to significant risks and rewards that are dependent on the commercial success of the activities in the arrangement.

We determined the transaction price under ASC 606 at the inception of the Roche Agreement to be $ 857.0 million, consisting of the $ 310.0 million up front payment and $ 547.0 million additional variable consideration attributed to cost reimbursement from development and manufacturing services and technology transfer related to the Roche Performance Obligations.

Since the variable consideration allocated to the Roche Development Services Obligation and the Roche Technology Transfer Obligation would be recognized as revenue only as the costs are incurred, we determined it is not probable that a significant reversal of cumulative revenue would occur.

We utilized the expected value method to determine the amount of reimbursement for these activities.

We determined that any variable consideration related to development and regulatory milestones is deemed to be fully constrained and therefore excluded from the transaction price due to the high degree of uncertainty and risk associated with these potential payments as we determine that we cannot assert that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

We also determined that royalties and sales milestones relate solely to the licenses of intellectual property and are therefore excluded from the transaction price under the sales-or-usage based royalty exception of ASC 606.

We developed the estimated standalone selling price for each of the Roche Performance Obligations with the objective of determining the price at which we would sell such an item if it were to be sold regularly on a standalone basis.

We determined the transaction price under ASC 606 at the inception of the Roche Agreement was $ 857.0 million, consisting of the $ 310.0 million upfront payment and $ 547.0 million additional variable consideration attributed to cost reimbursement from development and manufacturing services and technology transfer related to the Roche Performance Obligations.

We determined that any variable consideration related to development and regulatory milestones was deemed to be fully constrained at inception and therefore excluded from the initial transaction price due to the high degree of uncertainty and risk associated with these potential payments as we determined that we could not assert that it was probable that a significant reversal in the amount of cumulative revenue recognized would not occur.

We also determined that royalties and sales milestones relate solely to the licenses of intellectual property and were therefore excluded from the transaction price under the sales- or usage-based royalty exception of ASC 606.

We developed the estimated standalone selling price, at inception, for each of the Roche Performance Obligations with the objective of determining the price at which we would sell such an item if it were to be sold regularly on a standalone basis.

We developed the estimated standalone selling price for the Roche License Obligation primarily based on the probability-weighted present value of expected future cash flows associated with each underlying license or activity.

In developing such estimates, we applied judgment in determining the forecasted revenues, taking into consideration the applicable market conditions and relevant entity-specific factors, the probability of success, the time needed to develop zilebesiran and the discount rate.

We developed the estimated standalone selling price for the services and clinical supply included in the Roche Development Services Obligation and the Roche Technology Transfer Obligation primarily based on the level of effort necessary to perform the service and the costs for full-time equivalent employees and expected resources to be committed plus a reasonable margin.

We developed the estimated standalone selling price for the services and clinical supply included in the Roche Development Services Obligation and the Roche Technology Transfer Obligation primarily based on the level of efforts necessary to perform the service and the costs for full-time equivalent employees and expected resources to be committed plus a reasonable margin.

We allocated the variable consideration related to the estimated reimbursements for the Roche Development Services Obligation and the Roche Technology Transfer Obligation to each performance obligation as the terms of the variable payment relate specifically to our efforts to satisfy the performance obligation and allocating the variable amount of consideration entirely to the respective performance obligation is consistent with the allocation objective of ASC 606 when considering all of the performance obligations and payment terms in the contract.

We allocated the fixed up-front consideration of $ 310.0 million entirely to the Roche License Obligation as the value of the fixed consideration together with the expected value of the development and regulatory milestones, sales-based milestones and royalties, all of which are either currently constrained or subject to the sales-and usage-based royalty exception, approximates the standalone selling price of the Roche License Obligation.

Therefore, allocating the fixed up-front consideration entirely to the Roche License Obligation is consistent with the allocation objective of ASC 606 when considering all of the performance obligations and payment terms in the contract.

We allocated the fixed upfront consideration of $ 310.0 million entirely to the Roche License Obligation as the value of the fixed consideration together with the expected value of the remaining development and regulatory milestones, sales-based milestones, and royalties, all of which are either currently constrained at inception or subject to the sales- or usage-based royalty exception, approximates the standalone selling price of the Roche License Obligation.

Therefore, allocating the fixed upfront consideration entirely to the Roche License Obligation is consistent with the allocation objective of ASC 606 when considering all of the performance obligations and payment terms in the contract.

The Roche License Obligation was satisfied at a point in time upon transfer of the license to Roche.

2 unchanged sentences

This ratio is applied to the transaction price allocated to the obligation.

As all costs in the proportional performance model are allowable for reimbursement from Roche, and the assumptions used to determine the total estimated cost of the obligation are consistent with the assumptions used to determine the transaction price allocated to the obligation, the revenue recognized for this obligation will approximate 60 % of the actual reimbursable cost incurred.

Management has applied significant judgment in the process of developing our estimates.

We re-evaluate the transaction price as of the end of each reporting period.

As of December 31, 2024, the total transaction price was determined to be $ 1.31 billion, an increase of $ 457.5 million from December 31, 2023.

The increase is due to the inclusion of the $ 65.0 million development milestone for the first patient dosed in the KARDIA-3 Phase 2 clinical trial in the transaction price as this milestone was achieved in 2024, as well as an increase in the level of effort necessary to perform the development services based on an updated development plan approved by the joint steering committee in October 2024 that expanded the size of the clinical trial for the development of zilebesiran.

ALNYLAM PHARMACEUTICALS, INC.

2 unchanged sentences

Transaction Price Allocated Revenue Recognized During

Performance Obligations As of December 31, 2023 Year Ended December 31, 2023

Performance Obligations As of December 31, 2024 Year Ended December 31, 2024 Year Ended December 31, 2023

Roche License Obligation $ 375,000 $ 65,000 $ 310,000

4 unchanged sentences

Regeneron Pharmaceuticals, Inc.

During 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 therapeutic targets expressed in the eye and central nervous system, or CNS, in addition to a select number of targets expressed in the liver, which we refer to as the Regeneron Collaboration.

In 2019, we entered into a global, strategic collaboration with Regeneron Pharmaceuticals, Inc., or Regeneron, to discover, develop and commercialize RNAi therapeutics for a broad range of diseases by addressing therapeutic targets expressed in the eye and central nervous system, or CNS, in addition to a select number of targets expressed in the liver, which we refer to as the Regeneron Collaboration.

The Regeneron Collaboration is governed by a Master Agreement, referred to as the Regeneron Master Agreement.

In connection with the Regeneron Master Agreement, we and Regeneron entered into (i) a co-co collaboration agreement covering the continued development of cemdisiran, our C5 small interfering RNA, or siRNA, currently in development for C5 complement-mediated diseases, as a monotherapy and (ii) a license agreement to evaluate anti-C5 antibody-siRNA combinations for C5 complement-mediated diseases including evaluating the combination of Regeneron’s pozelimab and cemdisiran.

Under the terms of the Regeneron Collaboration, we are working exclusively with Regeneron to discover RNAi therapeutics for eye and CNS diseases for an initial research period of approximately five years , which we refer to as the Initial Research Term.

In connection with the Regeneron Master Agreement, we and Regeneron entered into (i) a co-co collaboration agreement covering the continued development of cemdisiran, our C5 siRNA, currently in development for C5 complement-mediated diseases as a monotherapy, or the C5 Co-Co Collaboration Agreement, and (ii) a license agreement to evaluate anti-C5 antibody-siRNA combinations for C5 complement-mediated diseases including evaluating the combination of Regeneron’s pozelimab and cemdisiran, or the C5 License Agreement.

The Master Agreement, the C5 Co-Co Collaboration Agreement and the C5 License Agreement were accounted for as a single arrangement because the agreements were negotiated together.

In November 2022, Regeneron exercised its right under the C5 Co-Co Collaboration Agreement to opt out of the further development and commercialization of cemdisiran monotherapy.

As a result of Regeneron’s decision to opt-out, the licenses granted to Regeneron under the C5 Co-Co Collaboration Agreement reverted to us, we had the sole right to continue to develop and commercialize cemdisiran monotherapy, and Regeneron no longer shared in the costs on any monotherapy program.

Regeneron remained eligible to receive tiered, double-digit royalties on net sales of cemdisiran as a monotherapy.

In June 2024, we entered into an amended and restated C5 License Agreement, or the Amended C5 License Agreement, which terminated the C5 Co-Co Collaboration Agreement and granted Regeneron a worldwide license to cemdisiran as a monotherapy in addition to the license to cemdisiran in combination with anti-C5 antibodies.

Through the Amended C5 License Agreement, Regeneron is now solely responsible for development, manufacturing and commercialization of cemdisiran as a monotherapy and in combination with anti-C5 antibodies.

As part of the Amended C5 License Agreement, we will provide manufacturing technology transfer services for cemdisiran to Regeneron.

Regeneron provided us with an upfront payment of $ 10.0 million, and we will receive certain milestone payments upon receipt of regulatory approval for cemdisiran as a monotherapy, and tiered double-digit royalties on net sales.

The Amended C5 License Agreement did not change our rights to receive low double-digit royalties and commercial milestones of up to $ 325.0 million on any potential product sales if cemdisiran is used as part of a combination product.

Under the terms of the Regeneron Collaboration, we are working exclusively with Regeneron to discover RNAi therapeutics for eye and CNS diseases for an initial research period of up to seven years , which we refer to as the Initial Research Term.

Regeneron has an option to extend the Initial Research Term (referred to as the Research Term Extension Period, and together with the Initial Research Term, the Research Term) for up to an additional five years , for a research term extension fee of $ 300.0 million.

The Regeneron Collaboration also covers a select number of RNAi therapeutic programs designed to target genes expressed in the liver, including our previously announced collaboration with Regeneron to identify RNAi therapeutics for the chronic liver disease nonalcoholic steatohepatitis.

We retain broad global rights to all of our other unpartnered liver-directed clinical and pre-clinical pipeline programs.

The Regeneron Collaboration is governed by a joint steering committee that is comprised of an equal number of representatives from each party.

The Regeneron Collaboration also covers a select number of RNAi therapeutic programs designed to target genes expressed in the liver.

Regeneron leads development and commercialization for all programs targeting eye diseases (subject to limited exceptions), entitling us to certain potential milestone and royalty payments pursuant to the terms of a license agreement, the form of which has been agreed upon by the parties.

We and Regeneron are alternating leadership on CNS and liver programs covered by the Regeneron Collaboration, with the lead party retaining global development and commercial responsibility.

For such CNS and liver programs, both we and Regeneron have the option at lead candidate selection to enter into a co-co collaboration agreement, the form of which has been agreed upon by the parties, whereby both companies will share equally all costs of, and profits from, all development and commercialization activities under the program.

If the non-lead party elects to not enter into a co-co collaboration agreement with respect to a given CNS or liver program, we and Regeneron will enter into a license agreement with respect to such program and the lead party will be the “Licensee” for the purposes of the license agreement.

If the lead party for a CNS or liver program elects to not enter into the co-co collaboration agreement, then we and Regeneron will enter into a license agreement with respect to such program and leadership of the program will transfer to the other party and the former non-lead party will be the “Licensee” for the purposes of the license agreement.

With respect to the programs directed to C5 complement-mediated diseases, we retain control of cemdisiran monotherapy development, and Regeneron is leading combination product development.

Pursuant to the C5 co-co collaboration agreement, Regeneron notified us in November 2022 of its decision to exercise its right to opt-out of the further development and commercialization of cemdisiran monotherapy.

As a result, Regeneron no longer shares costs and potential future profits on any monotherapy program with us.

We continue to perform our obligations under the agreement, and we are solely responsible for all development and commercialization costs.

Regeneron will be eligible to receive tiered double-digit royalties on net sales.

Under the C5 license agreement, for cemdisiran to be used as part of a combination product, Regeneron is solely responsible for all development and commercialization costs and we will receive low double-digit royalties and commercial milestones of up to $ 325.0 million on any potential combination product sales.

The C5 co-co collaboration agreement, the C5 license agreement, and the Master Agreement have been combined for accounting purposes and treated as a single agreement.

We and Regeneron are alternating leadership on CNS and liver programs, with the lead party retaining global development and commercial responsibility.

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In connection with the Regeneron Master Agreement, Regeneron made an upfront payment of $ 400.0 million.

In 2023, we received a $ 100.0 million milestone payment upon satisfying certain criteria during early clinical development for our CNS program, ALN-APP.

We are also eligible to receive up to an additional $ 100.0 million in milestone payments upon achievement of certain criteria during early clinical development for an eye program.

We and Regeneron plan to advance programs directed to up to 30 targets in the first five years under the Regeneron Collaboration during the Initial Research Term.

For each program, Regeneron will provide us with $ 2.5 million in funding at program initiation and an additional $ 2.5 million at lead candidate identification, with the potential for approximately $ 30.0 million in annual discovery funding to us as the Regeneron Collaboration reaches steady state.

Regeneron has the right to terminate the Regeneron Master Agreement for convenience upon ninety days ’ notice.

The termination of the Regeneron Master Agreement does not affect the term of any license agreement or co-co collaboration agreement then in effect.

In addition, either party may terminate the Regeneron Master Agreement for a material breach by, or insolvency of, the other party.

Unless earlier terminated pursuant to its terms, the Regeneron Master Agreement will remain in effect with respect to each program until (a) such program becomes a terminated program or (b) the parties enter into a license agreement or co-co collaboration agreement with respect to such program.

The Regeneron Master Agreement includes various representations, warranties, covenants, dispute escalation and resolution mechanisms, indemnities and other provisions customary for transactions of this nature.

commercialization activities under the program.

In connection with the Regeneron Master Agreement, we remain eligible to receive an additional $ 100.0 million milestone payment upon achievement of certain criteria during early clinical development for an eye program.

In addition, we and Regeneron are continuing to advance programs nominated during the Initial Research Term, and Regeneron has the right to nominate up to six additional targets per year during this period.

For each of these programs, Regeneron will provide us with $ 2.5 million in funding at program initiation and an additional $ 2.5 million at lead candidate identification.

If Regeneron exercises the option to extend the research term, Regeneron will retain the right to nominate up to six additional targets per year, and we will remain eligible to achieve $ 2.5 million in funding at each program initiation and an additional $ 2.5 million at each lead candidate identification during the Research Term Extension Period.

For any license agreement subsequently entered into, the licensee will generally be responsible for its own costs and expenses incurred in connection with the development and commercialization of the collaboration products.

The licensee will pay to the licensor certain development and/or commercialization milestone payments totaling up to $ 150.0 million for each collaboration product.

In addition, following the first commercial sale of the applicable collaboration product under a license agreement, the licensee is required to make certain tiered royalty payments, ranging from low double-digits up to 20 %, to the licensor based on the aggregate annual sales of the collaboration product, subject to customary reductions.

In addition, following the first commercial sale of the applicable collaboration product under a license agreement, the licensee is required to make certain tiered royalty payments, ranging from low double-digits up to 20 %, to the licensor based on the aggregate annual net sales of the collaboration product, subject to customary reductions.

For any co-co collaboration agreement subsequently entered into, we and Regeneron will share equally all costs of, and profits from, development and commercialization activities.

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If a party exercises its opt-out right, following the first commercial sale of the applicable collaboration product under a co-co collaboration agreement, the lead party is required to make certain tiered royalty payments, ranging from low double-digits up to 20 %, to the other party based on the aggregate annual net sales of the collaboration product and the timing of the exercise of the opt-out right, subject to customary reductions and a reduction for opt-out transition costs.

Due to the uncertainty of pharmaceutical development and the high historical failure rates generally associated with drug development, we may not receive any additional milestone or royalty payments from Regeneron under the Regeneron Master Agreement, the C5 license agreement, or any future license agreement, or under any co-co collaboration agreement in the event we exercise our opt-out right.

Our obligations under the Regeneron Collaboration include:

Contract Modification

In June 2024, we determined the Amended C5 License Agreement does not meet the requirements to account for the contract modification as a separate contract under ASC 606 because the consideration exchanged for the additional distinct goods and services does not reflect the standalone selling price.

Therefore, we have accounted for the Amended C5 License Agreement and Regeneron Master Agreement as a single combined contract.

The modification date was determined to be the June 2024 effective date of the Amended C5 License Agreement.

Our performance obligations subsequent to the contract modification include:

(i) a research license and research services, collectively referred to as the Research Services Obligation;

(ii) a worldwide license to cemdisiran for combination therapies, and manufacturing and supply, and development service obligations, collectively referred to as the C5 License Obligation;

and (iii) development, manufacturing and commercialization activities for cemdisiran monotherapies, referred to as the C5 Co-Co Obligation.

The research license is not distinct from the research services primarily as a result of Regeneron being unable to benefit on its own or with other resources reasonably available, as the license is providing access to specialized expertise, particularly as it relates to RNAi technology, which was not available in the marketplace when the Regeneron Collaboration was executed.

Similarly, the worldwide license to cemdisiran for combination therapies is not distinct from the manufacturing and supply, and development service obligations, as Regeneron cannot benefit on its own from the value of the license without receipt of supply.

Separately, prior to Regeneron’s decision in November 2022 to exercise its right to opt-out of the further development and commercialization of cemdisiran monotherapy, the cemdisiran monotherapy co-co collaboration agreement was under the scope of ASC 808 as we and Regeneron were both active participants in the development and manufacturing activities and were exposed to significant risks and rewards that were dependent on commercial success of the activities of the arrangement.

Regeneron’s decision to exercise its right to opt-out of the arrangement caused a change in the role of Regeneron and its exposure to significant risks and rewards under the arrangement.

As a result, we determined that the arrangement no longer represents a collaborative arrangement.

The arrangement now represents a vendor-customer relationship under ASC 606 as we perform our obligation to provide development and manufacturing activities under the arrangement.

The transaction price allocated to the C5 Co-Co obligation

(ii) a worldwide license to cemdisiran for combination therapies, and manufacturing and development service obligations, collectively referred to as the C5 License Obligation;

(iii) a worldwide license to cemdisiran for monotherapies, referred to as the C5 Monotherapy Obligation;

and (iv) a technology transfer of the existing manufacturing process for cemdisiran, referred to as the Regeneron Technology Transfer Obligation.

The Amended C5 License Agreement did not change the Research Services Obligation or the C5 License Obligation, which were both performance obligations at the inception of our global, strategic collaboration with Regeneron prior to the contract modification.

The Amended C5 License Agreement resulted in two additional performance obligations, which are the C5 Monotherapy Obligation and the Regeneron Technology Transfer Obligation.

The C5 Monotherapy Obligation is considered functional intellectual property and distinct from other promises as Regeneron can benefit from the cemdisiran monotherapy license on its own or together with other readily available resources and the license is separately identifiable from the other promises in the contract.

The Regeneron Technology Transfer Obligation is distinct as Regeneron can benefit from the cemdisiran monotherapy license transferred by us without the technology transfer given cemdisiran is in an advanced stage of clinical development and our utilization of third-party contract manufacturing organizations to manufacture cemdisiran.

Therefore, the C5 Monotherapy Obligation and the Regeneron Technology Transfer Obligation each represent a separate performance obligation.

As of the modification date, we established a new transaction price of $ 329.7 million, which represents the remaining deferred revenue as of the modification date of $ 260.3 million, variable consideration of $ 59.4 million, which relates to estimated reimbursements and milestones for the Research Services Obligation, C5 License Obligation and Regeneron Technology Transfer Obligation, and the $ 10.0 million upfront payment related to the Amended C5 License Agreement.

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

unit of account will be recognized over time using an input method based on cost incurred relative to the total estimated costs for the identified performance obligation by determining the proportion of effort incurred as a percentage of total effort we expect to expend.

The total transaction price is comprised of the $ 400.0 million upfront payment and additional variable consideration related to research, development, manufacturing and supply activities related to the Research Services Obligation and the C5 License Obligation.

We utilized the expected value method to determine the amount of reimbursement for these activities.

We determined that any variable consideration related to sales-based royalties and milestones related to the worldwide license to cemdisiran for combination therapies is deemed to be constrained and therefore has been excluded from the transaction price.

In addition, we are eligible to receive a future milestone payment upon the achievement of certain criteria during early clinical development for an eye program.

We are also eligible to receive royalties on future commercial sales for certain eye, CNS or liver targets, if any;

however, these amounts are excluded from variable consideration under the Regeneron Collaboration as we are only eligible to receive such amounts if, after a drug candidate is identified, the form of license agreement is subsequently executed resulting in a license that is granted to Regeneron.

Any such subsequently granted license would represent a separate transaction under ASC 606.

We allocated the initial transaction price to each unit of account based on the applicable accounting guidance as follows, in thousands:

Performance Obligations Standalone Selling Price Transaction Price Allocated

allocated the $ 59.4 million of variable consideration to the respective performance obligation as the terms of the variable payments relate specifically to our efforts to satisfy the performance obligations and allocating the variable amount of consideration entirely to the respective performance obligations is consistent with the allocation objective of ASC 606 when considering all of the performance obligations and payment terms in the contract.

We determined that any variable consideration related to regulatory milestones was deemed to be fully constrained and therefore excluded from the transaction price due to the high degree of uncertainty and risk associated with these potential payments and we determined that we could not assert that it was probable that a significant reversal in the amount of cumulative revenue recognized would not occur.

We determined that royalties and sales-based milestones relate solely to the license of intellectual property and were therefore excluded from the transaction price under the sales-or usage-based royalty exception of ASC 606.

As of the modification date, the transaction price for each performance obligation is as follows, in thousands:

Performance Obligations Standalone Selling Price Fixed Consideration

Variable Consideration Allocated

Transaction Price Allocated

Research Services Obligation $ 78,820 $ 45,469 $ 30,000 $ 75,469

C5 License Obligation $ 53,745 31,004 25,386 56,390

C5 Co-Co Obligation $ 364,600 246,000

The transaction price was allocated to the obligations based on the relative estimated standalone selling prices of each obligation, over which management has applied significant judgment.

We developed the estimated standalone selling price for the licenses included in the Research Services Obligation and the C5 License Obligation primarily based on the probability-weighted present value of expected future cash flows associated with each license related to each specific program.

In developing such estimate, we applied judgment in the determination of the forecasted revenues, taking into consideration the applicable market conditions and relevant entity-specific factors, the expected number of targets or indications expected to be pursued under each license, the probability of success, the time needed to develop a product candidate pursuant to the associated license and the discount rate.

We developed the estimated standalone selling price for the services and/or manufacturing and supply included in each of the obligations, as applicable, primarily based on the nature of the services to be performed and/or goods to be manufactured and estimates of the associated costs.

The estimated standalone selling price of the C5 Co-Co Obligation was developed by estimating the present value of expected future cash flows that Regeneron is entitled to receive.

In developing such estimate, we applied judgment in determining the indications that will be pursued, the forecasted revenues for such indications, the probability of success and the discount rate.

For the Research Services Obligation, the C5 License Obligation, and the C5 Co-Co Obligation accounted for under ASC 606, we measure proportional performance over time using an input method based on cost incurred relative to the total estimated costs for each of the identified obligations, on a quarterly basis, by determining the proportion of effort incurred as a percentage of total effort we expect to expend.

C5 Monotherapy Obligation

$ 332,000 191,520 — 191,520

Regeneron Technology Transfer Obligation

$ 4,000 2,307 4,000 6,307

$ 270,300 $ 59,386 $ 329,686

The fixed consideration was allocated to the obligations based on the relative estimated standalone selling prices of each obligation, over which management has applied significant judgment.

We developed the estimated standalone selling prices for the remaining Research Services Obligation, the remaining C5 License Obligation and the new Regeneron Technology Transfer Obligation primarily based on the levels of effort necessary to perform the services and the costs for full-time equivalent employees and expected resources to be committed plus a reasonable margin.

We developed the estimated standalone selling price for the cemdisiran monotherapy license granted under the C5 Monotherapy Obligation using the adjusted market assessment approach based on a discounted cash flow model that establishes the forecasted earnings during the commercial period for cemdisiran as a monotherapy adjusted for probability of success.

The transaction price of $ 191.5 million allocated to the C5 Monotherapy Obligation performance obligation was recognized immediately as this obligation was satisfied at a point in time upon transfer of the license to Regeneron.

Control of the license was transferred in June 2024 and Regeneron could begin to use and benefit from the license as of that time.

A cumulative catch-up adjustment was recognized for the remaining Research Services and the remaining C5 License Obligation as of the contract modification date to reflect the measure of progress and transaction price following the modification.

The cumulative catch-up adjustment for the remaining Research Services and the remaining C5 License Obligation was not significant.

For the Research Services Obligation, the C5 License Obligation, and the Regeneron Technology Transfer Obligation, we measure proportional performance over time using an input method based on cost incurred relative to the total estimated costs for each of the identified obligations by determining the proportion of effort incurred as a percentage of total effort we expect to expend.

This ratio is applied to the transaction price allocated to each obligation.

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Any changes to these estimates will be recognized in the period in which they change as a cumulative catch-up.

We re-evaluate the transaction price as of the end of each reporting period and as of December 31, 2023, the total transaction price was determined to be $ 675.8 million, an increase of $ 116.9 million from December 31, 2022.

The increase in the transaction price is primarily due to the $ 100.0 million milestone we earned in 2023 as we met certain criteria during early clinical development for our CNS program, ALN-APP.

As of December 31, 2023, the transaction price is comprised of the upfront payment and variable consideration related to development, manufacture and supply activities.

We re-evaluate the transaction price as of the end of each reporting period and as of December 31, 2024, the total transaction price was determined to be $ 168.6 million.

Revenue recognized under this agreement is accounted for as collaboration revenue.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables provide a summary of the transaction price allocated to each unit of account based on the applicable accounting guidance, in addition to revenue activity during the period and deferred revenue as of the balance sheet date, in thousands:

The following tables provide a summary of the transaction price allocated, deferred revenue as of the balance sheet date, and revenue recognized during the period for the remaining unsatisfied performance obligations in thousands:

Transaction Price Allocated Deferred Revenue

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C5 License Obligation 59,875 12,018 27,500

C5 Co-Co Obligation 246,000 186,200 193,600

Regeneron Technology Transfer Obligation

5,759 2,307 —

Total $ 168,603 $ 55,480 $ 90,900

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C5 License Obligation 38,341 ( 15,100 ) 32,500

C5 Co-Co Obligation 7,400 20,080 18,900

Total $ 77,438 $ 65,100 $ 61,100

As of December 31, 2023, the aggregate amount of the transaction price allocated to the remaining Research Services Obligation, C5 License Obligation, and C5 Co-Co Obligation that was unsatisfied was $ 334.7 million, which is expected to be recognized through the term of the Regeneron Collaboration as the services are performed, but could be recognized earlier after an assessment of strategic alternatives which could change the scope of our obligations.

As of December 31, 2024, the aggregate amount of the transaction price allocated to the remaining Research Services Obligation, C5 License Obligation, and Regeneron Technology Transfer Obligation that was unsatisfied was $ 106.6 million, which is expected to be recognized through the term of the Regeneron Collaboration as the services are performed.

Deferred revenue related to the Regeneron Collaboration is classified as either current or non-current in the consolidated balance sheets based on the period the revenue is expected to be recognized.

2013 Collaboration with The Medicines Company

In February 2013, we and The Medicines Company, or MDCO, entered into a license and collaboration agreement pursuant to which we granted to MDCO an exclusive, worldwide license 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 February 2013, we entered into a license and collaboration agreement with The Medicines Company, or MDCO, pursuant to which we granted to MDCO an exclusive, worldwide license 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.

We refer to this agreement, as amended through the date hereof, as the MDCO License Agreement.

In 2020, Novartis AG, or Novartis, completed its acquisition of MDCO and assumed all rights and obligations under the MDCO License Agreement.

As of December 31, 2023, we have earned $ 120.0 million of milestones and upon achievement of certain events, we will be entitled to receive an additional $ 60.0 million in commercialization milestones.

In addition, we are entitled to royalties ranging from 10 % up to 20 % based on annual worldwide net sales of licensed products by Novartis, its affiliates and sublicensees, subject to reduction under specified circumstances.

Due to the uncertainty of pharmaceutical development and the high historical failure rates generally associated with drug development, we may not receive any additional milestone payments under the MDCO License Agreement and future royalty payments may be less than anticipated.

Unless terminated earlier in accordance with the terms of the agreement, the MDCO License Agreement expires on a licensed product-by-licensed product and country-by-country basis upon expiration of the last royalty term for any licensed product in any country, where a royalty term is defined as the latest to occur of (1) the expiration of the last valid claim of patent rights covering a licensed product, (2) the expiration of the Regulatory Exclusivity, as defined in the MDCO License Agreement, and (3) the twelfth anniversary of the first commercial sale of the licensed product in such country.

We estimate that our core technology patents covering licensed products under the MDCO License Agreement will expire in most countries by 2029.

We also estimate that our Leqvio (inclisiran) product-specific patents covering licensed products under the MDCO License Agreement will expire in the U.S.

and Europe between 2027 and 2036, inclusive of any patent term extensions and/or any supplementary protection certificates extending such terms due to regulatory delay in those countries where such extensions are available.

In addition, more patent filings relating to the collaboration may be made in the future.

Either party may terminate the MDCO License Agreement in the event the other party fails to cure a material breach or upon patent-related challenges by the other party.

In addition, Novartis has the right to terminate the agreement without cause at any time upon four months’ prior written notice.

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the term of the MDCO License Agreement, neither party will, alone or with an affiliate or third party, research, develop or commercialize, or grant a license to any third party to research, develop or commercialize, in any country, any product (for Alnylam) and any siRNA product (for Novartis) directed to the PCSK9 gene, other than a licensed product, without the prior written agreement of the other party, subject to the terms of the MDCO License Agreement.

During 2018, we completed the performance obligations previously identified in the MDCO License Agreement, including the supply and technical transfer agreement, however, we continue to receive additional orders for supply of certain material.

We consider such orders as promised goods to be distinct from the other performance obligations since Novartis is able to manufacture on its own through its vendors.

Such orders are treated as separate agreements and any associated revenue will be recognized upon transfer of control.

Unearned future milestones are not included in the transaction price as they are not considered likely of achievement and therefore constrained.

Any consideration related to sales-based royalties (including milestones) are recognized when the related sales occur as they are determined to relate predominantly to the license granted to MDCO and as a result have also been excluded from the transaction price.

In 2020, Novartis AG, or Novartis, completed its acquisition of MDCO and assumed all of MDCO’s rights and obligations under the MDCO License Agreement.

As of December 31, 2024, we have earned $ 180.0 million of milestones and we are entitled to royalties ranging from 10 % up to 20 % based on annual worldwide net sales of licensed products by Novartis, its affiliates and sublicensees, subject to reduction under specified circumstances.

In addition to the collaboration agreements discussed above, we have various other collaboration agreements that are not individually significant to our operating results or financial condition at this time.

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The payment or receipt of these amounts, however, is contingent upon the occurrence of various future events.

LIABILITY RELATED TO THE SALE OF FUTURE ROYALTIES

In April 2020, we entered into a purchase and sale agreement, or Purchase Agreement, with BX Bodyguard Royalties L.P.

(an affiliate of The Blackstone Group Inc.), or Blackstone Royalties, under which Blackstone Royalties acquired 50 % of royalties payable, or Royalty Interest, with respect to net sales by MDCO, its affiliates or sublicensees of inclisiran (or the branded drug product, Leqvio) and any other licensed products under the MDCO License Agreement, and 75 % of the commercial milestone payments payable under the MDCO License Agreement, together with the Royalty Interest, the Purchased Interest.

If Blackstone Royalties does not receive payments in respect of the Royalty Interest by December 31, 2029, equaling at least $ 1.00 billion, Blackstone Royalties will receive 55 % of the Royalty Interest beginning on January 1, 2030.

In consideration for the sale of the Purchased Interest, Blackstone Royalties paid us $ 1.00 billion.

We continue to own or control all inclisiran intellectual property rights and are responsible for certain ongoing manufacturing and supply obligations related to the generation of the Purchased Interest.

Due to our continuing involvement, we will continue to account for any royalties and commercial milestones due to us under the MDCO License Agreement as revenue on our consolidated statement of operations and comprehensive loss and record the proceeds from this transaction as a liability, net of closing costs, on our consolidated balance sheet.

In order to determine the amortization of the liability related to the sale of future royalties, we are required to estimate the total amount of future payments to Blackstone Royalties over the life of the Purchase Agreement.

The $ 1.00 billion liability, recorded at execution of the agreement, will be accreted to the total of these royalty and commercial milestone payments as interest expense over the life of the Purchase Agreement.

As of December 31, 2023, our estimate of this total interest expense resulted in an effective annual interest rate of 8 %.

These estimates contain assumptions that impact both the amount recorded at execution and the interest expense that will be recognized in future periods.

As payments are made to Blackstone Royalties, the balance of the liability will be effectively repaid over the life of the Purchase Agreement.

The exact timing and amount of repayment is likely to change each reporting period.

A significant increase or decrease in Leqvio global net revenue will materially impact the liability related to the sale of future royalties, interest expense and the time period for repayment.

We will periodically assess the expected payments to Blackstone Royalties and to the extent the amount or timing of such payments is materially different than our initial estimates, we will prospectively adjust the amortization of the liability related to the sale of future royalties and the related interest expense.

As of December 31, 2023, the carrying value of the liability related to the sale of future royalties was $ 1.38 billion, net of closing costs of $ 10.0 million.

The carrying value of the liability related to the sale of future royalties approximates fair value as of December 31, 2023 and is based on our current estimates of future royalties and commercial milestones expected to be paid to Blackstone Royalties over the life of the arrangement, which are considered Level 3 inputs.

Due to the uncertainty of pharmaceutical development and the high historical failure rates generally associated with drug development and commercialization, it is possible we may not receive any such payments under all of our existing collaboration and license agreements, including the agreements described within this note.

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table shows the activity with respect to the liability related to the sale of future royalties, in thousands:

Carrying value as of December 31, 2021

Interest expense recognized 107,601

Payments ( 3,400 )

Carrying value as of December 31, 2022

Interest expense recognized 106,554

Payments ( 21,619 )

Carrying value as of December 31, 2023

FAIR VALUE MEASUREMENTS

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Commercial paper 22,709 — 22,709 —

Corporate notes 762 — 762 —

government-sponsored enterprise securities 9,952 — 9,952 —

Marketable debt securities:

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Commercial paper 35,408 — 35,408 —

Certificates of deposit 3,587 — 3,587 —

Municipal securities 5,003 — 5,003 —

Marketable equity securities 8,156 8,156 — —

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treasury securities 30,712 — 30,712 —

government-sponsored enterprise securities 41,763 — 41,763 —

Commercial paper 2,685 — 2,685 —

Certificates of deposit 3,289 — 3,289 —

Corporate notes 762 — 762 —

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Development derivative liability $ 324,941 $ — $ — $ 324,941

For the years ended December 31, 2023 and 2022, there were no transfers between Level 1 and Level 2 financial assets.

For the years ended December 31, 2024 and 2023, there were no transfers between Level 1 and Level 2 financial assets or liabilities.

The carrying amounts reflected in our consolidated balance sheets for cash, accounts receivable, net, other current assets, accounts payable and accrued expenses approximate fair value due to their short-term maturities.

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Commercial paper 58,117 — — 58,117

Certificates of deposit 3,587 — — 3,587

Municipal securities 5,002 1 — 5,003

Total $ 1,787,465 $ 2,722 $ ( 1,178 ) $ 1,789,009

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Total $ 1,648,127 $ 3,030 $ ( 1,482 ) $ 1,649,675

The fair values of our marketable debt securities by classification in the consolidated balance sheets were as follows:

The following table summarizes classification of our marketable debt securities in the consolidated balance sheets:

As of December 31,

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Total inventory $ 115,376 $ 125,432

As of December 31, 2023 and 2022, we had $ 36.3 million and $ 32.7 million of long-term inventory, respectively, included within other assets in our consolidated balance sheet as we anticipate it being consumed beyond our normal operating cycle.

As of December 31, 2024 and 2023, we had $ 36.9 million and $ 36.3 million of long-term inventory, respectively, included within other assets in our consolidated balance sheets as we anticipate it being consumed beyond our normal operating cycle.

Property, Plant and Equipment, Net

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Computer equipment and software 42,534 35,616

Construction in progress 30,099 14,595

Furniture and fixtures 11,647 12,153

Land 9,080 9,080

Construction in progress 7,674 30,099

773,148 749,133

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Compensation and related 214,399 122,170

Pre-clinical, clinical trial and manufacturing 111,503 94,702

Preclinical, clinical trial and manufacturing

75,815 111,503

Licensing and collaboration agreements 92,313 58,282

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Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within our consolidated balance sheets that sum to the total of these amounts shown in the consolidated statements of cash flows:

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within our consolidated balance sheets to the total of these amounts shown in the consolidated statements of cash flows:

As of December 31,

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$ ( 32,792 ) $ ( 1,092 ) $ ( 9,470 ) $ ( 1,300 ) $ ( 44,654 )

Other comprehensive loss before reclassifications — — 11 ( 5,274 ) ( 5,263 )

Amounts reclassified from other comprehensive loss

Other comprehensive (loss) income before reclassifications

— — ( 6 ) 11,922 11,916

Net other comprehensive loss

Amounts reclassified from other comprehensive (loss) income

— ( 1,661 ) 11,024 — 9,363

Net other comprehensive (loss) income

— ( 1,661 ) 11,018 11,922 21,279

Balance as of December 31, 2023

( 32,792 ) ( 2,753 ) 1,548 10,622 ( 23,375 )

Other comprehensive income before reclassifications — — ( 6 ) 11,922 11,916

Amounts reclassified from other comprehensive income — ( 1,661 ) 11,024 — 9,363

Net other comprehensive income

Other comprehensive (loss) income before reclassifications

— ( 1,613 ) 3 ( 9,643 ) ( 11,253 )

Amounts reclassified from other comprehensive (loss) income

— 117 ( 7 ) — 110

Net other comprehensive loss

— ( 1,496 ) ( 4 ) ( 9,643 ) ( 11,143 )

Balance as of December 31, 2024

$ ( 32,792 ) $ ( 4,249 ) $ 1,544 $ 979 $ ( 34,518 )

CONVERTIBLE DEBT

Convertible Senior Notes Due 2027

On September 12, 2022, we commenced a private offering of $ 900.0 million in aggregate principal amount of 1 % Convertible Senior Notes due 2027, or the Initial Notes.

On September 13, 2022, the initial purchasers in such offering exercised their option to purchase an additional $ 135.0 million in aggregate principal amount of our 1 % Convertible Senior Notes due 2027, or the Additional Notes, and together with the Initial Notes collectively referred to as the Notes, bringing the

Amounts reclassified out of accumulated other comprehensive (loss) income relate to settlements of marketable debt securities and amortization of our pension obligation which are recorded as other expense, net in the consolidated statements of operations and comprehensive loss.

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

total aggregate principal amount of the Notes to $ 1.04 billion.

CONVERTIBLE DEBT

Convertible Senior Notes Due 2027

In 2022, we commenced a private offering of $ 900.0 million in aggregate principal amount of 1 % Convertible Senior Notes due 2027, or the Initial Notes.

The Notes were issued pursuant to an indenture, dated September 15, 2022, or the Indenture.

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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 % per year payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2023.

The Notes bear interest at a rate of 1 % per year payable semiannually in arrears on March 15 and September 15 of each year, beginning on March 15, 2023.

The Notes are convertible at the option of the noteholder on or after June 15, 2027.

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The conversion rate for the Notes will initially be 3.4941 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $ 286.20 per share of common stock.

The initial conversion price of the Notes represents a premium of approximately 35 % over the $ 212.00 per share last reported sale price of common stock on September 12, 2022.

The initial conversion price of the Notes represents a premium of approximately 35 % over the last reported sale price of common stock of $ 212.00 per share on September 12, 2022.

The conversion rate is subject to adjustment under certain circumstances in accordance with the terms of the Indenture.

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No sinking fund is provided for the Notes and therefore we are not required to redeem or retire the Notes periodically.

If we undergo a fundamental change, as defined in the indenture agreement, then subject to certain conditions, holders may require us to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the Notes to be repurchased plus accrued and unpaid interest.

If we undergo a fundamental change, as defined in the Indenture, then subject to certain conditions, holders may require us to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the Notes to be repurchased plus accrued and unpaid interest.

In addition, if specific corporate events occur prior to the maturity date or if we issue a notice of redemption, we will increase the conversion rate by pre-defined amounts for holders who elect to convert their notes in connection with such corporate event.

The conditions allowing holders of the Notes to convert were not met this quarter.

As of December 31, 2023, the Notes are classified as a long-term liability, net of issuance costs of $ 14.2 million, on the consolidated balance sheets.

As of December 31, 2023, the estimated fair value of the Notes was approximately $ 1.02 billion.

The fair value was determined based on the last actively traded price per $100 of the Notes for the period ended December 31, 2023 (Level 2).

The Notes were issued at par and costs associated with the issuance of the Notes are amortized to interest expense over the contractual term of the Notes.

As of December 31, 2023, the effective interest rate of the Notes is 1 %.

The Notes were issued at par.

As of December 31, 2024 and 2023, the Notes are classified as a long-term liability on the consolidated balance sheets and presented net of unamortized issuance costs of $ 10.4 million and $ 14.2 million, respectively.

The issuance costs are amortized to interest expense over the contractual term of the Notes.

As of December 31, 2024 and 2023, the estimated fair value of the Notes was approximately $ 1.11 billion and $ 1.02 billion, respectively.

The fair value was determined based on the last actively traded price per $100 of the Notes (Level 2) as of December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, the effective interest rate of the Notes is 1 %.

Capped Call Transactions

In September 2022, in connection with the pricing of the Initial Notes and the initial purchasers’ exercise of their option to purchase the Additional Notes, we entered into privately negotiated capped call transactions, or Capped Call Transactions.

In 2022, in connection with the pricing of the Initial Notes and the initial purchasers’ exercise of their option to purchase the Additional Notes, we entered into privately negotiated capped call transactions, or Capped Call Transactions.

The Capped Call Transactions initially cover, subject to customary anti-dilution adjustments, the number of shares of common stock that underlie the Notes.

The cap price of the Capped Call Transactions is initially $ 424.00 per share, which represents a premium of 100 % over the last reported sale price of 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.

We used approximately $ 118.6 million of the proceeds from the offering of Notes to pay the cost of the Capped Call Transactions.

We evaluated the Capped Call Transactions and determined that they should be accounted for separately from the Notes.

The cost of $ 118.6 million to purchase the Capped Call Transactions was recorded as a reduction to additional paid-in capital in the consolidated balance sheet as of December 31, 2023 as the Capped Call Transactions are indexed to our own stock and met the criteria to be classified in stockholders' deficit.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LIABILITY RELATED TO THE SALE OF FUTURE ROYALTIES

In April 2020, we entered into a purchase and sale agreement, or Purchase Agreement, with BX Bodyguard Royalties L.P.

(an affiliate of The Blackstone Group Inc.), or Blackstone Royalties, pursuant to which Blackstone Royalties acquired a percentage of royalties payable, or the Royalty Interest, initially set at 50 % with respect to net sales by MDCO, its affiliates or sublicensees of inclisiran (or the branded drug product, Leqvio) and any other licensed products under the MDCO License Agreement, and 75 % of the commercial milestone payments payable under the MDCO License Agreement, together with the Royalty Interest, the Purchased Interest.

If Blackstone Royalties does not receive payments in respect to the Royalty Interest by December 31, 2029, equaling at least $ 1.00 billion, Blackstone Royalties will receive the Royalty Interest at 55 % beginning on January 1, 2030.

In consideration for the sale of the Purchased Interest, Blackstone Royalties paid us $ 1.00 billion.

Due to our continuing involvement and an obligation to repay Blackstone Royalties, we record the proceeds from this transaction as a debt, net of closing costs, on our consolidated balance sheets.

We account for any royalties and commercial milestones due to us under the MDCO License Agreement as revenue on our consolidated statements of operations and comprehensive loss.

As of December 31, 2024 and 2023, our estimate of this total interest expense resulted in an effective annual interest rate of 10 % and 8 %, respectively.

These estimates contain assumptions that impact both the amount recorded at execution and the interest expense that will be recognized in future periods.

As payments are made to Blackstone Royalties, the balance of the liability will be effectively repaid over the life of the Purchase Agreement.

The exact timing and amount of repayment is likely to change each reporting period.

A significant increase or decrease in Leqvio global net revenue will materially impact the liability related to the sale of future royalties, interest expense and the time period for repayment.

As of December 31, 2024 and 2023, the carrying value of the liability related to the sale of future royalties was $ 1.45 billion and $ 1.38 billion, net of closing costs of $ 9.1 million and $ 10.0 million, respectively.

The carrying value of the liability related to the sale of future royalties approximates fair value as of December 31, 2024 and is based on our current estimates of future royalties and commercial milestones expected to be paid to Blackstone Royalties over the life of the arrangement, which are considered Level 3 inputs.

The following table shows the activity with respect to the liability related to the sale of future royalties, in thousands:

Carrying value as of December 31, 2022

Interest expense recognized 106,554

Payments ( 21,619 )

Carrying value as of December 31, 2023

Interest expense recognized 127,133

Payments ( 57,001 )

Carrying value as of December 31, 2024

DEVELOPMENT DERIVATIVE LIABILITY

In August 2020, we entered into a co-development agreement, referred to as the Funding Agreement, with BXLS V Bodyguard – PCP L.P.

and BXLS Family Investment Partnership V – ESC L.P., collectively referred to as Blackstone Life

and BXLS Family Investment Partnership V – ESC L.P., collectively referred to as Blackstone Life Sciences, pursuant to which Blackstone Life Sciences will provide up to $ 150.0 million in funding for the clinical development of vutrisiran and zilebesiran, two of our cardiometabolic programs.

As of December 31, 2024, Blackstone Life Sciences has provided $ 70.0 million to fund vutrisiran development costs related to the HELIOS-B Phase 3 clinical trial and $ 26.0 million to fund Phase 2 clinical trials of zilebesiran.

Furthermore, Blackstone Life Sciences has the right, but is not obligated, to fund up to $ 54.0 million for development costs related to a Phase 3 clinical trial of zilebesiran.

The amount of funding ultimately provided by Blackstone Life Sciences for the Phase 3 clinical trial of zilebesiran is dependent on us achieving specified development milestones.

As between Blackstone Life Sciences and the Company, we retain sole responsibility for the development and commercialization of both vutrisiran and zilebesiran.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Sciences, pursuant to which Blackstone Life Sciences will provide up to $ 150.0 million in funding for the clinical development of vutrisiran and zilebesiran, two of our cardiometabolic programs.

With respect to vutrisiran, Blackstone Life Sciences has committed to provide up to $ 70.0 million to fund development costs related to the HELIOS-B Phase 3 clinical trial.

In November 2021, Blackstone Life Sciences opted in to Phase 2 clinical trial funding of zilebesiran, committing to fund, upon meeting certain patient enrollment thresholds, up to $ 26.0 million.

Furthermore, Blackstone Life Sciences has the right, but is not obligated, to fund up to $ 54.0 million for development costs related to a Phase 3 clinical trial of zilebesiran.

The amount of funding ultimately provided by Blackstone Life Sciences is dependent on us achieving specified development milestones with respect to each clinical trial.

As between Blackstone and the Company, we retain sole responsibility for the development and commercialization of both vutrisiran and zilebesiran.

As consideration for Blackstone Life Sciences’ funding for vutrisiran clinical development costs, we have agreed to pay Blackstone Life Sciences a 1 % royalty on net sales of AMVUTTRA (vutrisiran) for a 10-year term beginning upon the first commercial sale following regulatory approval of vutrisiran for ATTR-cardiomyopathy, as well as fixed payments of up to 2.5 times their investment over a two-year period upon regulatory approval of vutrisiran for ATTR-cardiomyopathy in specified countries, unless it is later withdrawn from the market following a mandatory recall.

As consideration for Blackstone Life Sciences’ funding for Phase 2 clinical development costs of zilebesiran, we have agreed to pay Blackstone Life Sciences fixed payments of up to 3.25 times their Phase 2 investment over a four-year period upon the successful completion of the zilebesiran Phase 2 clinical trial, unless certain regulatory events affecting the continued development of zilebesiran occur.

In September 2023, we announced positive topline results from the KARDIA-1 Phase 2 study of zilebesiran, triggering the achievement of a development milestone of $ 84.5 million payable to Blackstone in 16 equal, quarterly payments over four years .

commercial sale following regulatory approval of vutrisiran for ATTR-cardiomyopathy, as well as fixed payments of up to 2.5 times their investment over a two-year period upon regulatory approval of vutrisiran for ATTR-cardiomyopathy in specified countries, unless vutrisiran is later withdrawn from the market following a mandatory recall.

As consideration for Blackstone Life Sciences’ funding for Phase 2 clinical development costs of zilebesiran, we have agreed to pay Blackstone Life Sciences fixed payments of up to 3.25 times their Phase 2 investment over a four-year period upon the successful completion of the Phase 2 clinical trial of zilebesiran, unless certain regulatory events affecting the continued development of zilebesiran occur.

In September 2023, we announced positive topline results from the KARDIA-1 Phase 2 clinical trial of zilebesiran, triggering the achievement of a development milestone of $ 84.5 million payable to Blackstone Life Sciences in 16 equal quarterly payments over four years .

As consideration for Blackstone Life Sciences’ funding for Phase 3 clinical development costs of zilebesiran, we have agreed to pay Blackstone Life Sciences fixed payments of up to 4.5 times their Phase 3 investment over a four-year period upon regulatory approval of zilebesiran in specified countries, unless it is later withdrawn from the market following a mandatory recall.

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Blackstone Life Sciences may also terminate the Funding Agreement with respect to a product if the joint steering committee elects to terminate the development program for that product in its entirety, if certain clinical endpoints are not achieved for that product or, with respect to vutrisiran only, if our right to develop or commercialize vutrisiran is enjoined in a specified major market as a result of an alleged patent infringement.

In certain termination circumstances, we will be obligated to pay Blackstone Life Sciences an amount that is equal to, or a multiplier of, the development funding received from Blackstone Life Sciences, and we may remain obligated under certain circumstances to make the payments to Blackstone Life Sciences described above, or the royalty described above in the case of AMVUTTRA, should we obtain regulatory approval for zilebesiran or vutrisiran for ATTR-cardiomyopathy following termination.

We account for the Funding Agreement under ASC 815, Derivatives and Hedging , as a derivative liability, measured at fair value, recorded within accrued expenses or other liabilities on our consolidated balance sheets, depending on timing of our payment to Blackstone Life Sciences.

The change in fair value due to the remeasurement of the development derivative liability is recorded as other expense on our consolidated statements of operations and comprehensive loss.

We account for the Funding Agreement under ASC 815, Derivatives and Hedging , as a derivative liability, measured at fair value.

As of December 31, 2024 and 2023, we recorded $ 93.8 million and $ 21.1 million, respectively, within accrued expenses and $ 393.1 million and $ 303.8 million, respectively, within other liabilities on our consolidated balance sheets, based on expected timing of our payments to Blackstone Life Sciences.

The change in fair value due to the remeasurement of the development derivative liability is recorded within other expense, net on our consolidated statements of operations and comprehensive loss.

As of December 31, 2024 and 2023, the derivative liability is classified as a Level 3 financial liability in the fair value hierarchy.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

royalty payable on net sales of AMVUTTRA, assuming regulatory approval for ATTR-cardiomyopathy, (iv) our cost of borrowing ( 11 %), and (v) Blackstone Life Sciences’ cost of borrowing ( 6 %).

The valuation method incorporates certain unobservable Level 3 key inputs including (i) the probability and timing of achieving stated development milestones to receive payments from Blackstone Life Sciences, (ii) the probability and timing of achieving regulatory approval and payments to Blackstone Life Sciences, (iii) an estimate of the amount and timing of the royalty payable on net sales of AMVUTTRA, assuming regulatory approval for ATTR amyloidosis with cardiomyopathy, (iv) our cost of borrowing ( 10 %), and (v) Blackstone Life Sciences’ cost of borrowing ( 7 %).

The following table presents the activity with respect to the development derivative liability, in thousands:

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Amount received under the Funding Agreement 12,333

Amount paid under the Funding Agreement

Loss recorded from change in fair value

Carrying value as of December 31, 2024

STOCKHOLDERS’ DEFICIT

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

STOCKHOLDERS’ EQUITY (DEFICIT)

Stock-Based Compensation

The following table summarizes stock-based compensation expenses included in operating costs and expenses:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2024 2023 2022

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The following table summarizes stock-based compensation expense by type of award:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2024 2023 2022

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* Excludes performance-based restricted stock units for which the associated vesting events are not yet determined to be probable.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Time-Based Restricted Stock Units and Awards

6 unchanged sentences

Outstanding as of December 31, 2024 1,725 $ 175.39

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Performance-Based Restricted Stock Units

6 unchanged sentences

Outstanding as of December 31, 2024 954 $ 156.56

The performance-based restricted stock units granted in 2023 and 2022 will vest upon the later of the one-year anniversary of the date of grant and the achievement of specific clinical development, regulatory, commercial and/or financial performance events, as approved by our people, culture and compensation committee.

The performance-based restricted stock units granted during the years ended December 31, 2024 and 2023 will vest upon the later of the one-year anniversary of the date of grant and the achievement of specific clinical development, regulatory, commercial and/or financial performance events, as approved by our people, culture and compensation committee.

Time-Based Stock Options

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We satisfy stock option exercises with newly issued shares of our common stock.

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Performance-Based Stock Options

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Outstanding as of December 31, 2023 462 $ 99.16

Granted — $ —

Exercised ( 189 ) $ 99.03

Cancelled — $ —

Outstanding as of December 31, 2024 273 $ 99.24 2.25 $ 37,205

Exercisable as of December 31, 2024 273 $ 99.24 2.25 $ 37,205

During the years ended December 31, 2023, 2022 and 2021, there were 0 , 0 and 197,102 performance-based stock options that vested, respectively.

The intrinsic value of performance-based stock options exercised was $ 22.5 million, $ 9.7 million and $ 74.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.

We satisfy performance-based stock option exercises with newly issued shares of our common stock.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Valuation Assumptions for Stock Options

The fair value of stock options, at date of grant, based on the following assumptions, was estimated using the Black-Scholes option-pricing model.

The grant-date fair value of stock options was estimated using the Black-Scholes option-pricing model.

Our expected stock-price volatility assumption is based on the historical volatility of our publicly traded stock.

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The dividend yield assumption is based on the fact that we have never paid cash dividends and have no present intention to pay cash dividends.

The risk-free interest rate used for each grant is equal to the zero coupon rate for instruments with a similar expected life.

The risk-free rate for periods within the expected option life is based on the U.S.

Treasury yield curve in effect at the time of grant.

The following table summarizes the Black-Scholes valuation assumption inputs for employee stock options granted:

Year Ended December 31,

Years Ended December 31,

2024 2023 2022

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Expected volatility 47 - 48 %

In May 2022, our stockholders approved the amendment and restatement of our 2018 Stock Incentive Plan, as amended, or the Amended and Restated 2018 Plan, which increased the number of shares authorized for issuance thereunder by 6,000,000 shares.

In May 2022, our stockholders approved the amendment and restatement of our 2018 Stock Incentive Plan, or, as amended, the Amended and Restated 2018 Plan, which increased the number of shares authorized for issuance thereunder by 6,000,000 shares.

The Amended and Restated 2018 Plan provides for the granting of stock options, restricted stock and restricted stock units (together, restricted stock awards), stock appreciation rights and other stock-based awards, and has a fungible share pool.

Any award that is not a full value award is counted against the authorized share limits specified as one share for each share of common stock subject to the award, and all full value awards, defined as restricted stock awards or other stock-based awards, are counted as one and a half shares for each one share of common stock subject to such full value award.

As of December 31, 2023, an aggregate of 18,256,842 shares of common stock were reserved for issuance under our stock plans, including outstanding stock options to purchase 7,422,183 shares of common stock, 2,057,874 outstanding restricted stock units, 8,168,918 of common stock available for additional equity awards and 607,867 shares available for future grant under our Amended and Restated 2004 Employee Stock Purchase Plan, as amended, or the Amended and Restated ESPP.

Each stock option shall expire within 10 years of issuance.

As of December 31, 2024, an aggregate of 14,010,827 shares of common stock were reserved for issuance under our stock plans, including outstanding stock options to purchase 5,135,606 shares of common stock, 2,679,429 outstanding restricted stock units, 5,728,086 shares of common stock available for additional equity awards and 467,706 shares of common stock available for future grant under our Amended and Restated 2004 Employee Stock Purchase Plan, as amended, or the Amended and Restated ESPP.

Each stock option shall expire within 10 years of grant date.

Time-based stock options granted to employees generally vest as to 25 % of the shares on the first anniversary of the grant date and 6.25 % of the shares at the end of each successive three-month period thereafter until fully vested.

Restricted stock units granted to employees generally vest over a three-year period, with one-third of the shares vesting on each of the three successive anniversaries of the grant date.

Vesting may be accelerated in certain circumstances, including upon death, disability, retirement or termination without cause in connection with a change of control.

Employee Stock Purchase Plan

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In 2020, our stockholders approved an amendment to the Amended and Restated ESPP, to increase the number of shares authorized for issuance to 1,965,789 shares.

Under the Amended and Restated ESPP, as amended, each offering

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

period is six months , at the end of which employees may purchase shares of common stock through payroll deductions made over the term of the offering.

Under the Amended and Restated ESPP, as amended, each offering period is six months , at the end of which employees may purchase shares of common stock through payroll deductions made over the term of the offering.

The per-share purchase price at the end of each offering period is equal to the lesser of 85 % of the closing price of our common stock at the beginning or end of the offering period.

We issued 140,161 and 108,905 shares during the years ended December 31, 2024 and 2023, respectively.

We estimate the fair value of shares to be issued under the Amended and Restated ESPP, as amended, using the Black-Scholes option-pricing model on the date of grant, or first day of the offering period, using the same methodology approach as the employee stock option grants.

The following table summarizes the Black-Scholes valuation assumption inputs for stock purchase rights granted under the employee stock purchase plan:

Year Ended December 31,

Years Ended December 31,

2024 2023 2022

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Expected volatility 35 % - 54 %

ALNYLAM PHARMACEUTICALS, INC.

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Preferred Stock

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675 West Kendall Street

We lease office and laboratory space located at 675 West Kendall Street, Cambridge, Massachusetts for our corporate headquarters from BMR-675 West Kendall Street, LLC, or BMR, under a non-cancelable real property lease.

We lease office and laboratory space located at 675 West Kendall Street, Cambridge, Massachusetts for our corporate headquarters from BMR-675 West Kendall Street, LLC under a non-cancelable real property lease.

The lease commenced on May 1, 2018 and monthly rent payments became due commencing on February 1, 2019 upon substantial completion of the building improvements, and continue for 15 years, with options to renew for two five-year terms each.

Exercise of these options was not determined to be reasonably certain and thus was not included in the operating lease liability on the consolidated balance sheet as of December 31, 2023.

We are not reasonably certain to exercise these options, therefore, the periods covered by the options were not included in the lease term as of December 31, 2024 or 2023.

300 Third Street

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The term of the lease expires on January 31, 2034 with options to renew for two five-year terms each.

Exercise of these options was not determined to be reasonably certain and thus was not included in the operating lease liability on the consolidated balance sheet as of December 31, 2023.

We are not reasonably certain to exercise these options, therefore, the periods covered by the options were not included in the lease term as of December 31, 2024 or 2023.

101 Main Street

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In 2020, we amended our lease agreement, pursuant to which the term of the lease with respect to two floors was extended for an additional five years , through June 2026, with an option to renew for one five-year term.

Exercise of this option was not determined to be reasonably certain and thus was not included in the operating lease liability on the consolidated balance sheet as of December 31, 2023.

In addition, we have a separate lease agreement for an additional floor at 101 Main Street, which expires in March 2024 and will not be extended.

We are not reasonably certain to exercise this option, therefore, the period covered by the option was not included in the lease term as of December 31, 2024 or 2023.

In addition, we had a separate lease agreement for an additional floor at 101 Main Street, which expired in March 2024.

Other Lease Disclosures

Our facility leases described above generally contain customary provisions allowing the landlords to terminate the leases if we fail to remedy a breach of any of our obligations under any such lease within specified time periods, or upon our bankruptcy or insolvency.

The leases do not include any restrictions or covenants that had to be accounted for under the lease guidance.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Total rent expense, including operating expenses, under all of our real property leases was $ 61.6 million, $ 58.6 million and $ 59.5 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The following table summarizes our costs included in operating expenses related to right of use lease assets we have entered into through December 31, 2023:

Year Ended December 31,

The following table is a summary of the components of total lease cost for the years ended December 31, 2024, 2023, and 2022:

Years Ended December 31,

(In thousands) 2024 2023 2022

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Short-term lease costs were not material for the years ended December 31, 2024, 2023 and 2022.

Net cash paid for the amounts included in the measurement of the operating lease liability in our consolidated balance sheet and included in change in operating lease liability within operating activities in our consolidated statement of cash flow was $ 46.5 million and $ 43.1 million for the years ended December 31, 2023 and 2022, respectively.

The weighted-average remaining lease term and weighted-average discount rate for all leases as of December 31, 2023 was 9 years and 8 %, respectively, and as of December 31, 2022 was 10 years and 8 %, respectively.

Future lease payments for non-cancellable operating leases and a reconciliation to the carrying amount of the operating lease liability presented in the consolidated balance sheet as of December 31, 2023 were as follows, in thousands:

Year Ending December 31

Net cash paid for the amounts included in the measurement of the operating lease liabilities in our consolidated balance sheets and presented within operating activities in our consolidated statements of cash flows was $ 51.0 million, $ 46.5 million and $ 43.1 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The weighted-average remaining lease term and weighted-average discount rate for all leases as of December 31, 2024 was eight years and 8 %, respectively, and as of December 31, 2023 was nine years and 8 %, respectively.

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Future lease payments for non-cancellable operating leases and a reconciliation to the carrying amount of the operating lease liabilities presented in the consolidated balance sheet as of December 31, 2024 were as follows, in thousands:

Years Ending December 31

2025 $ 43,384

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Total discounted lease liability $ 271,427

Current operating lease liability $ 41,510

Non-current operating lease liability 243,101

Current operating lease liabilities

Non-current operating lease liabilities

Total $ 271,427

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The outcome of any such legal proceedings, regardless of the merits, is inherently uncertain.

In addition, litigation and related matters are costly and may divert the attention of our

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

management and other resources that would otherwise be engaged in other activities.

In addition, litigation and related matters are costly and may divert the attention of our management and other resources that would otherwise be engaged in other activities.

If we were unable to prevail in any such legal proceedings, our business, results of operations, liquidity and financial condition could be adversely affected.

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LLC, collectively referred to as Pfizer, and (2) Moderna, Inc.

and its subsidiaries ModernaTX, Inc., and Moderna US, Inc., collectively referred to as Moderna.

The lawsuits seek damages for infringement of U.S.

and its subsidiaries ModernaTX, Inc., and Moderna US, Inc., collectively referred to as Moderna, seeking damages for infringement of U.S.

11,246,933, or ‘933 Patent, in Pfizer’s and Moderna’s manufacture and sale of their messenger RNA, or mRNA, COVID-19 vaccines.

5 unchanged sentences

Moderna responded on June 13, 2022, requesting a partial motion to dismiss those claims for sales under Section 1498(a).

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On May 27, 2022, Pfizer filed an answer to our complaint, denying the allegations, and asserting invalidity and non-infringement defenses.

In addition, Pfizer added BioNTech SE to the suit and added counter-claims seeking a declaratory judgment that our patent is invalid and a second claim alleging that our patent is invalid due to patent misuse.

We believe their defenses and counter-claims have no merit and responded on June 10, 2022, with substantive arguments as to the validity of our claims and the lack of merit of their patent misuse claim.

We responded on June 10, 2022, with substantive arguments as to the validity of our claims and the lack of merit of their patent misuse claim.

On July 12, 2022, we filed an additional lawsuit against each of Pfizer and Moderna seeking damages for infringement of U.S.

6 unchanged sentences

On May 26, 2023, we filed additional lawsuits against Pfizer and Moderna in Delaware seeking damages for infringing the ‘229 patent.

In addition to this patent, we added U.S.

11,633,479 and 11,633,480 in the recently filed suits against both Pfizer and Moderna and also U.S.

In addition to this patent, we also alleged infringement of U.S.

11,633,479, or the ‘479 patent, and 11,633,480 against both Pfizer and Moderna and of U.S.

11,612,657 against Pfizer only.

1 unchanged sentence

District Court for the District of Delaware to consider the meaning of three disputed terms as used in the ’933 and ’979 patents.

Subsequently, we and Moderna jointly agreed to final judgment of non-infringement of two of our patents, and such judgment was entered by the court on August 30, 2023, and on September 7, 2023, we appealed the claim construction ruling to the Court of Appeals for the Federal Circuit in the initial lawsuit against Moderna.

The claim construction ruling did not affect one of the patents in the lawsuit filed against Moderna on May 26, 2023, and that case is going forward on a schedule to be set by the court.

The two separate suits against Pfizer are ongoing subject to the ruling on the third claim term, and in September 2023, we and Pfizer agreed to consolidate the 2022 and 2023 lawsuits in one case, which will require moving the trial date from November 2024 to the first half of 2025, with the final schedule to be determined by the court.

On August 21, 2023, the court issued an order construing two of the three terms, and deferred a ruling on the third term pending an evidentiary hearing, which was held on January 4, 2024, with the final ruling deferred pending the outcome of an additional evidentiary hearing, which was held on July 12, 2024, followed by an additional evidentiary hearing, which was held on September 19, 2024, at which time the court construed the final claim term narrowly.

Following the August 21, 2023 order, we and Moderna jointly agreed to final judgment of non-infringement of two of our patents, and such judgment was entered by the court on August 30, 2023.

On September 7, 2023, we appealed the claim construction ruling to the Court of Appeals for the Federal Circuit in the initial lawsuit against Moderna.

The claim construction ruling initially did not affect one of the patents in the lawsuit filed against Moderna on May 26, 2023, but following a hearing held on August 15, 2024, on September 10, 2024 the court entered a ruling in the same manner as in the other earlier case and on October 2, 2024, we and Moderna jointly agreed to a final judgment of non-infringement of the ‘479 patent while preserving all rights to appeal.

On October 16, 2024, Moderna filed a motion seeking recovery of fees incurred by them from the time we agreed to a judgment of non-infringement in the first case until the time we agreed to a judgment of non-infringement in the second case, which period runs from approximately September 2023 to October 2024.

We opposed the motion in a reply filed on November 6, 2024.

The court has not yet ruled on the motion.

In light of the early stage of this matter, a loss is not probable or reasonably estimable at this time.

The two separate suits against Pfizer are ongoing and in September 2023, we and Pfizer agreed to consolidate the 2022 and 2023 lawsuits into one case with a trial date set for July 7, 2025.

On July 12, 2024, Acuitas Therapeutics, Inc., or Acuitas, filed a declaratory judgment action against us in the U.S.

District Court for the District of Delaware, seeking a judgment adding certain Acuitas employees as co-inventors on the patents we have asserted against Pfizer/BioNTech and Moderna in our lawsuits.

On September 19, 2024, we filed a motion to dismiss, arguing Acuitas did not have standing to sue and failed to state a claim upon which relief could be granted.

The court has not yet ruled on our motion.

On December 12, 2024, The Board of Regents of the University of Texas System filed a lawsuit in the United States District Court for the Western District of Texas, alleging that we infringe U.S.

8,895,717 by making, using and commercializing ONPATTRO in the U.S.

On February 5, 2025, we filed a motion to dismiss the case for improper venue and an alternative motion to transfer the case to the United States District Court for the District of Massachusetts if the dismissal is not granted.

The court has not yet ruled on these motions.

In light of the early stage of this matter, a loss is not probable or reasonably estimable at this time.

Indemnifications

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Under such agreements, we may be responsible for paying the costs of any litigation relating to the license agreements or the underlying intellectual property rights, including the costs associated with certain litigation regarding the licensed intellectual property.

We are also a party to a number of agreements entered into in the ordinary course of business, which contain typical provisions that obligate us to indemnify the other parties to such agreements upon the occurrence of

In addition, we have agreed to indemnify our officers and directors for expenses, judgments, fines, penalties, excise taxes, and settlement amounts paid in connection with any threatened,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

certain events, including litigation or other legal proceedings.

In addition, we have agreed to indemnify our officers and directors for expenses, judgments, fines, penalties, excise taxes, and settlement amounts paid in connection with any threatened, pending or completed litigation proceedings, including, for example, the recently closed government investigation, in which an officer or director was, is or will be involved as a party, on account of such person’s status as an officer or director, or by reason of any action taken by the officer or director while acting in such capacity, subject to certain limitations.

pending or completed litigation proceedings, in which an officer or director was, is or will be involved as a party, on account of such person’s status as an officer or director, or by reason of any action taken by the officer or director while acting in such capacity, subject to certain limitations.

These indemnification costs are charged to selling, general and administrative expense.

Our maximum potential future liability under any such indemnification provisions is uncertain.

We have determined that the estimated aggregate fair value of our potential liabilities under all such indemnification provisions is minimal and had not recorded any liability related to such indemnification provisions as of December 31, 2022 or 2021.

We have reviewed the estimated aggregate fair value of our potential liabilities under all such indemnification provisions and have not recorded any related liability as of December 31, 2024 or 2023.

The domestic and foreign components of loss before income taxes are as follows:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2024 2023 2022

2 unchanged sentences

Loss before income taxes $ ( 377,375 ) $ ( 433,517 ) $ ( 1,126,993 )

The provision for income taxes consisted of the following:

Year Ended December 31,

During the year ended December 31, 2024, our foreign income of $ 194.6 million primarily relates to income generated in Switzerland.

Our Switzerland foreign income was predominately generated in the second half of 2024 due to growth from sales of AMVUTTRA driven by increased patient demand.

The benefit from (provision for) income taxes consisted of the following:

Years Ended December 31,

(In thousands) 2024 2023 2022

4 unchanged sentences

Deferred benefit:

Domestic — — —

Foreign 106,762 713 1,433

Total deferred benefit 106,762 713 1,433

Total provision for income taxes $ 6,725 $ 4,163 $ 680

During the year ended December 31, 2023, we recorded a net provision for income taxes of $ 6.7 million.

This is primarily comprised of $ 4.0 million of state current provision, $ 3.4 million of foreign current provision offset by $ 0.7 million of foreign deferred provision.

Total benefit from (provision for) income taxes

$ 99,218 $ ( 6,725 ) $ ( 4,163 )

During the year ended December 31, 2024, we recorded a net benefit from income taxes of $ 99.2 million.

This is primarily comprised of $ 106.8 million of foreign deferred benefit, partially offset by $ 1.6 million of domestic state current provision and $ 5.9 million of foreign current provision.

ALNYLAM PHARMACEUTICALS, INC.

2 unchanged sentences

We establish a valuation allowance when uncertainty exists as to whether all or a portion of the net deferred tax assets will be realized.

Components of the net deferred tax asset are as follows:

Components of the net deferred tax assets are as follows:

As of December 31,

4 unchanged sentences

Sale of future royalties 378,657 353,974

Lease liability 66,558 67,242

Change in fair value of development derivative liability

107,797 62,011

Operating lease liabilities

60,313 66,558

Deferred revenue 14,515 74,704

7 unchanged sentences

Unrealized gain on marketable securities ( 2,042 ) ( 2,277 )

Right of use assets ( 46,021 ) ( 46,819 )

Deferred revenue tax accounting method change — ( 24,995 )

Operating lease right-of-use assets

( 41,196 ) ( 46,021 )

Deferred tax asset valuation allowance ( 2,788,933 ) ( 2,817,395 )

Net deferred tax asset $ 11,581 $ 10,840

Net deferred tax assets

$ 116,863 $ 10,101

Our effective income tax rate differs from the statutory federal income tax rate, as follows:

Year Ended December 31,

Years Ended December 31,

(In thousands) 2024 2023 2022

9 unchanged sentences

Other ( 1.2 ) 1.7 ( 0.8 )

Revaluation of deferred due to rate change 5.1 ( 0.4 ) 1.1

Uncertain tax position reserve ( 14.3 ) — —

Revaluation of deferred taxes due to rate change

( 0.6 ) 5.1 ( 0.4 )

Valuation allowance 7.6 ( 144.1 ) ( 31.3 )

Effective income tax rate 26.3 % ( 1.5 ) % ( 0.4 ) %

We have evaluated the positive and negative evidence bearing upon the realizability of our deferred tax assets.

We have concluded, in accordance with the applicable accounting standards, that it is more likely than not that we may not realize the benefit of all of our deferred tax assets, with the exception of the deferred assets related to certain foreign subsidiaries.

Accordingly, we have recorded a valuation allowance against our U.S., Bermuda and Switzerland deferred tax assets.

We continue to maintain a valuation allowance on the majority of our net operating losses and other deferred tax assets because we have a history of cumulative losses.

On a quarterly basis, we reassess the valuation allowance on our deferred income tax assets weighing positive and negative evidence to assess the recoverability of the deferred tax assets.

Based on our recent financial performance and our future projections, we could record a reversal of all, or a portion of the valuation allowance.

However, any such change is subject to actual performance and other considerations that may present positive or negative evidence at the time

On December 27, 2023, the Government of Bermuda enacted the Corporate Income Tax Act of 2023, or Corporate Income Tax Act, which introduces a corporate income tax regime in Bermuda with a statutory tax rate of 15% effective January 1, 2025.

Companies are not subject to income tax in Bermuda prior to this change and with the transition into the Corporate Income Tax Act there is an economic transition adjustment that requires the tax basis of certain Bermudian assets to be established at fair market value.

Upon the enactment of the Corporate Income Tax Act, we determined the fair market value of our identifiable intangible assets in Bermuda and recognized a deferred tax asset in our consolidated financial statements.

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

of the assessment.

The valuation allowance increased by $ 623.8 million, $ 384.6 million and $ 459.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The increase in our valuation allowance is primarily due to capitalized research and development costs and internally developed intellectual property for the year ending December 31, 2023, additional net operating losses for the year ended December 31, 2022, and primarily due to the liability related to the sale of future royalties for the year ended December 31, 2021.

recorded a full valuation allowance against this deferred tax asset as we have generated historical losses and expect to generate future losses.

In the year ended December 31, 2024, we transferred the identifiable intangible assets in Bermuda to Switzerland.

We regularly reassess the valuation allowance on our deferred income tax assets.

Valuation allowances require an assessment of both positive and negative evidence when determining whether it is more likely than not that we will be able to recover deferred tax assets.

Such assessment is required on a jurisdiction-by-jurisdiction basis.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

We assessed the valuation allowance on our Switzerland deferred tax assets and considered positive evidence, including, among other things, income generated in Switzerland in the current year, three-year cumulative Switzerland income, and expected future profitability in Switzerland.

After assessing both the positive evidence and negative evidence, we determined it was more likely than not that certain Switzerland deferred tax assets would be realized in the future and released the associated valuation allowance during the year ended December 31, 2024, which resulted in an income tax benefit of $ 108.0 million.

As of December 31, 2024, we maintained a full valuation allowance against our U.S.

deferred tax assets.

The valuation allowance decreased by $ 28.5 million as of December 31, 2024 compared to December 31, 2023, primarily as a result of the release of the valuation allowance on certain Switzerland deferred tax assets, which primarily consisted of the tax basis in intellectual property transferred from Bermuda and net operating losses, offset by an increase to the valuation allowance due to additional net operating losses in the U.S.

As of December 31, 2024, we had federal and state net operating loss carryforwards, or NOLs, of $ 3.01 billion and $ 3.50 billion, respectively, to reduce future taxable income.

2 unchanged sentences

State NOLs will begin expiring in varying amounts through 2044 unless utilized.

As of December 31, 2023, we had federal and state research and development, including Orphan Drug, and state investment tax credit carryforwards of $ 376.7 million and $ 62.1 million, respectively, available to reduce future tax liabilities that expire at various dates through 2043.

We have a valuation allowance against the net operating loss and tax credit carryforwards as it is unlikely that we will realize these assets.

As of December 31, 2024, we also had foreign NOLs of $ 443.4 million to reduce future taxable income which will begin expiring in varying amounts through 2030.

As of December 31, 2024, we had federal research and development, including Orphan Drug, carryforwards of $ 356.4 million, available to reduce future tax liabilities that expire at various dates through 2044.

As of December 31, 2024, we had state research and development and investment tax credit carryforwards of $ 44.6 million, available to reduce future tax liabilities, that expire at various dates through 2039.

We have a full valuation allowance against our U.S.

federal and state net operating loss and tax credit carryforwards, as well as a valuation allowance against certain foreign net operating loss carryforwards, as we determined it was more likely than not that we would not realize these assets.

Ownership changes, as defined in the Internal Revenue Code and similar state provisions, including those resulting from the issuance of common stock in connection with our public offerings, may limit the amount of federal and state net operating loss and tax credit carryforwards that can be utilized to offset future taxable income or tax liability.

2 unchanged sentences

Based on this analysis, we do not believe that any of our federal and state tax attributes will expire unutilized due to Section 382 limitations.

As of December 31, 2023, we had Switzerland NOLs of $ 382.4 million to reduce future taxable income which will begin expiring in varying amounts through 2030 unless utilized.

We have a valuation allowance against our Switzerland NOLs as it is unlikely that we will realize these assets given our historical losses.

Companies are not subject to income tax in Bermuda prior to this change and with the transition into the Act there is an economic transition adjustment that requires the tax basis of certain Bermudian assets to be established at fair market value.

Upon the enactment of the Corporate Income Tax Act, we determined the fair market value of our identifiable intangibles in Bermuda and recognized a deferred tax asset in our consolidated financial statements.

We recorded a full valuation allowance against this deferred tax asset as we have generated historical losses and expect to generate future losses.

We apply the accounting guidance in ASC 740 related to accounting for uncertainty in income taxes.

Our reserves related to income taxes are based on a determination of whether, and how much of, a tax benefit taken by us in our tax filings or positions is more likely than not to be realized and ultimately sustained upon challenge by a taxing authority based upon its technical merits and subject to certain recognition and measurement criteria.

We recognize potential interest and penalties related to unrecognized tax benefits in our provision for income taxes.

Our reserve related to income taxes, including potential interest and penalties, was not material as of December 31, 2023 and 2022.

Our uncertain income tax positions do not impact our effective tax rate due to our full valuation allowance in the U.S.

As of December 31, 2023, we did not have any material gross unrecognized tax benefits related to income tax reserves.

As of December 31, 2024, we have certain gross unrecognized tax benefits related to income tax reserves primarily related to federal and state research and orphan drug credit carryforwards of $ 53.1 million, of which $ 48.5 million relate to positions taken in prior years and $ 4.6 million relate to current year positions.

We do not have any other material gross unrecognized tax benefits related to income tax reserves.

We do not expect any of our unrecognized tax benefits related to income tax reserves, if recognized, to impact our effective tax rate due to full valuation allowance in the U.S.

Our policy is to record interest and penalties related to unrecognized tax benefits related to income taxes in our income tax provision.

No amounts for interest or penalties related to unrecognized tax benefits have been recognized in our statements of operations and comprehensive loss for the years ended December 31, 2024, 2023 and 2022.

As of December 31, 2024, the unremitted earnings of our foreign subsidiaries are approximately $ 86.2 million.

1 unchanged sentence

income taxes or foreign withholding taxes on these earnings as it is our current intention to permanently reinvest these earnings outside the U.S.

The tax liability on these earnings is also not material.

Any tax liability on these earnings is not expected to be material.

Events that could trigger a tax liability include, but are not limited to, distributions, reorganizations or restructurings and/or tax law changes.

The tax years 2020 through 2023 remain open to examination by major taxing jurisdictions, which are primarily in the U.S., although net operating loss and tax credit carryforwards generated prior to 2020 may still be adjusted upon examination by the Internal Revenue Service or state tax authorities if they have or will be used in a future period.

The tax years 2021 through 2024 remain open to examination by the Internal Revenue Service and certain state tax authorities, although net operating loss and tax credit carryforwards generated prior to 2021 may still be adjusted upon examination by the Internal Revenue Service or state tax authorities if they have or will be used in a future period.

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

EMPLOYEE BENEFIT PLANS

7 unchanged sentences

The benefit obligation corresponds to the projected benefit obligations of which the discounted net present value is calculated based on years of employment, expected salary increases and pension adjustments.

For the years ended December 31, 2024, 2023 and 2022 contributions and net periodic benefit costs to such plans generated a total expense of $ 22.3 million, $ 17.5 million and $ 16.5 million, respectively.

SEGMENT INFORMATION

We operate in a single segment dedicated to the discovery, development, manufacturing and commercialization of RNAi therapeutics.

RNAi therapeutics are comprised of siRNA that 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.

To date, our efforts have yielded the approval of five first-in-class RNAi-based medicines, which generate the majority of our consolidated total revenues.

Consistent with our operational structure, our Chief Executive Officer, or CEO, as the chief operating decision maker, or CODM, manages and allocates resources on a consolidated basis at the global corporate level.

Our global research and development and technical operations and quality organizations are responsible for the discovery, development, and supply of products.

Commercial efforts that coordinate the marketing, sales and distribution of these products are organized by geographic region and therapeutic area.

All of these activities are supported by global corporate staff functions.

Managing and allocating resources at the global corporate level enables our CEO to assess the overall level of resources available and how to best deploy these resources in line with our overarching long-term corporate-wide strategic goals.

The determination of a single segment is consistent with the consolidated financial information regularly reviewed by the CODM for the purposes of evaluating performance, forecasting future period financial results, allocating resources and setting incentive targets.

Consistent with our management reporting, results of our operations are reported on a consolidated basis for purposes of segment reporting.

The CEO evaluates performance and decides how to allocate resources based on consolidated net income (loss) that is reported on the consolidated statements of operations and comprehensive loss.

The measure of segment assets is reported on the consolidated balance sheets as total assets.

The CEO uses consolidated net income (loss) to evaluate income generated from the Company’s business activities in deciding how to allocate company resources (such as pursuing clinical development or entering a strategic collaboration), monitoring budget versus actual results, and establishing management’s compensation.

Please refer to the consolidated financial statements for further information related to these measures of segment performance.

In addition, research and development and selling, general and administrative expenses are significant segment expenses regularly provided to the CEO with the following categories:

Research and Development

Years Ended December 31,

(In thousands)

2024 2023 2022

Clinical research and outside services $ 509,129 $ 485,732 $ 438,418

Compensation and related 455,678 357,696 317,750

Occupancy and all other costs (1)

161,425 160,987 126,847

Total research and development expense

$ 1,126,232 $ 1,004,415 $ 883,015

ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2023, 2022 and 2021 contributions and net periodic benefit costs to such plans generated a total expense of $ 17.5 million, $ 16.5 million and $ 13.1 million, respectively.

Selling, General and Administrative

Years Ended December 31,

(In thousands)

2024 2023 2022

Compensation and related

$ 531,078 $ 423,295 $ 411,750

Consulting and professional services

274,539 226,664 226,941

Occupancy and all other costs (1)

169,909 145,687 131,967

Total selling, general and administrative expense

$ 975,526 $ 795,646 $ 770,658

(1) Occupancy and all other costs includes facilities, information technology, depreciation and certain departmental expenses.

As of December 31, 2024 and 2023, substantially all of our long-lived assets were from U.S.

For the years ended December 31, 2024, 2023 and 2022, net revenues from collaborations were attributed to the U.S.

Please refer to Note 3, Net Product Revenues, for information regarding our net product revenues by geography.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data