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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
____________________________________________
FORM 10-Q
____________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
Commission File Number 001-36407
__________________________________________
ALNYLAM PHARMACEUTICALS, INC.
(Exact Name of Registrant as Specified in Its Charter)
__________________________________________
Delaware
(State or Other Jurisdiction of
Incorporation or Organization)
77-0602661
(I.R.S. Employer
Identification No.)

675 West Kendall Street,
Henri A. Termeer Square
Cambridge, MA
(Address of Principal Executive Offices)
02142
(Zip Code)
(617) 551-8200
(Registrant’s Telephone Number, Including Area Code)
__________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock, $0.01 par value per shareALNYThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes  x   No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes  x   No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes     No  x
At July 31, 2020, the registrant had 115,969,783 shares of Common Stock, $0.01 par value per share, outstanding.

1


INDEX
PAGE
NUMBER
PART I.  FINANCIAL INFORMATION

“Alnylam,” ONPATTRO®, GIVLAARI®, Alnylam Act® and Alnylam Assist® are registered trademarks of Alnylam Pharmaceuticals, Inc. Our logo, trademarks and service marks are property of Alnylam. All other trademarks or service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective holders.
2


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:
risks related to the direct or indirect impact of the COVID-19 global pandemic or any future pandemic, such as the scope and duration of the pandemic, government actions and restrictive measures implemented in response, material delays in diagnoses of rare diseases, initiation or continuation of treatment for diseases addressed by our products, or in patient enrollment in clinical trials, potential clinical trial, regulatory review and inspection or supply chain disruptions, and other potential impacts to our business, the effectiveness or timeliness of steps taken by us to mitigate the impact of the pandemic, and our ability to execute business continuity plans to address disruptions caused by the COVID-19 or any future pandemic;
our views with respect to the potential for RNAi therapeutics, including ONPATTRO, GIVLAARI, lumasiran, patisiran, inclisiran, vutrisiran and fitusiran;
our plans for additional global regulatory filings and the continuing product launches of ONPATTRO and GIVLAARI;
our expectations regarding the advancement of lumasiran and inclisiran through regulatory review and toward the market;
the progress of our research and development programs;
our current and anticipated clinical trials and expectations regarding the reporting of data from these trials;
our expectations regarding potential market size for, and the successful commercialization of, ONPATTRO, GIVLAARI or any future products, including lumasiran and inclisiran;
the timing of regulatory filings and interactions with or actions or advice of regulatory authorities, which may affect the design, initiation, timing, continuation and/or progress of clinical trials or result in the need for additional pre-clinical and/or clinical testing or the timing or likelihood of regulatory approvals;
our ability or, with respect to inclisiran, our partner’s ability, to obtain and maintain regulatory approval, pricing and reimbursement for ONPATTRO, GIVLAARI or any future products, including lumasiran and inclisiran;
the status of our manufacturing operations and the construction of our manufacturing facility and any delays, interruptions or failures in the manufacture and supply of ONPATTRO, GIVLAARI, lumasiran, inclisiran, or any of our other product candidates by our contract manufacturers or by us;
our progress continuing to build and leverage global commercial infrastructure;
successfully launching, marketing and selling our approved products globally;
our ability to successfully expand the indication for ONPATTRO in the future;
the possible impact of any competing products on the commercial success of ONPATTRO and GIVLAARI and our product candidates, including lumasiran and inclisiran, and, with respect to inclisiran, our partner's ability to compete against such products;
our ability to manage our growth and operating expenses;
our expectations regarding our STAr pipeline growth strategy and our ability to meet or exceed our Alnylam 2020 guidance for the advancement and commercialization of RNAi therapeutics;
our expectations regarding the length of time our current cash, cash equivalents and marketable debt and equity securities will support our operations based on our current operating plan;
our belief that the funding provided by our strategic financing collaboration with The Blackstone Group Inc. and certain of its affiliates should enable us to achieve a self-sustainable profile without the need for future equity financing;
our dependence on third parties for development, manufacture and distribution of products;
3


our expectations regarding our corporate collaborations, including potential future licensing fees and milestone and royalty payments under existing or future agreements;
obtaining, maintaining and protecting our intellectual property;
our ability to attract and retain qualified key management and scientists, development, medical and commercial staff, consultants and advisors;
the outcome of litigation or other legal proceedings;
the risk of government investigations;
regulatory developments in the United States, or U.S., and foreign countries;
the impact of laws and regulations;
developments relating to our competitors and our industry; and
other risks and uncertainties, including those listed under the caption Part II, Item 1A, "Risk Factors" of this Quarterly Report on Form 10-Q.
The risks set forth above are not exhaustive. Other sections of this Quarterly Report may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors emerge from time to time and it is not possible for management to predict all risk factors, nor can we assess the impact of all risk factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Any forward-looking statements in this Quarterly Report on Form 10-Q reflect our current views with respect to future events and with respect to our business and future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those described under Part II, Item 1A, "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. You are advised, however, to consult any further disclosure we make in our reports filed with the SEC.
This Quarterly Report on Form 10-Q may include data that we obtained from industry publications and third-party research, surveys and studies. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. This Quarterly Report on Form 10-Q also may include data based on our own internal estimates and research, including estimates regarding the impact of the COVID-19 pandemic on our financial statements and business operations. Our internal estimates have not been verified by any independent source and, while we believe any data obtained from industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data. Such third-party data, as well as our internal estimates and research, are subject to a high degree of uncertainty and risk due to a variety of factors, including those described in Part II, Item 1A, "Risk Factors" and elsewhere in this Quarterly Report on Form 10-Q. These and other factors could cause our results to differ materially from those expressed in this Quarterly Report on Form 10-Q.


4

ALNYLAM PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(Unaudited)

June 30, 2020December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents$580,829  $547,178  
Marketable debt securities1,258,425  975,017  
Marketable equity securities86,310  13,967  
Accounts receivable, net69,115  43,011  
Inventory77,418  56,348  
Prepaid expenses and other current assets88,349  80,343  
Total current assets2,160,446  1,715,864  
Property, plant and equipment, net439,126  425,179  
Operating lease right-of-use assets229,674  221,197  
Restricted investments24,725  14,825  
Receivable related to the sale of future royalties500,000    
Other assets20,396  18,069  
Total assets$3,374,367  $2,395,134  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$26,125  $49,884  
Accrued expenses211,186  197,201  
Operating lease liability33,447  27,688  
Deferred revenue107,587  77,821  
Liability related to the sale of future royalties5,957    
Total current liabilities384,302  352,594  
Operating lease liability, net of current portion281,618  276,135  
Deferred revenue, net of current portion281,530  318,383  
Liability related to the sale of future royalties, net of current portion1,008,336    
Other liabilities18,855  9,330  
Total liabilities1,974,641  956,442  
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock, $0.01 par value per share, 5,000 shares authorized and no shares issued and outstanding as of June 30, 2020 and December 31, 2019
    
Common stock, $0.01 par value per share, 250,000 shares authorized; 115,647 shares issued and outstanding as of June 30, 2020; 112,188 shares issued and outstanding as of December 31, 2019
1,156  1,122  
Additional paid-in capital5,520,320  5,201,176  
Accumulated other comprehensive loss(33,212) (36,518) 
Accumulated deficit(4,088,538) (3,727,088) 
Total stockholders’ equity1,399,726  1,438,692  
Total liabilities and stockholders’ equity$3,374,367  $2,395,134  
The accompanying notes are an integral part of these condensed consolidated financial statements.
5

ALNYLAM PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except per share amounts)
(Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Statements of Operations
Revenues:
Net product revenues$77,533  $38,231  $149,471  $64,522  
Net revenues from collaborations26,429  6,483  53,967  13,486  
Total revenues103,962  44,714  203,438  78,008  
Operating costs and expenses:
Cost of goods sold19,929  4,326  33,231  7,673  
Research and development154,996  163,890  324,567  293,017  
Selling, general and administrative127,896  112,769  254,657  202,377  
Total operating costs and expenses302,821  280,985  612,455  503,067  
Loss from operations(198,859) (236,271) (409,017) (425,059) 
Other income:
Interest expense(27,248)   (27,248)   
Interest income3,165  8,781  8,645  16,306  
Other income (expense)45,039  (453) 68,071  (410) 
Change in fair value of liability obligation  9,422    9,422  
Total other income20,956  17,750  49,468  25,318  
Loss before income taxes(177,903) (218,521) (359,549) (399,741) 
Provision for income taxes(1,326) (960) (1,901) (1,655) 
Net loss$(179,229) $(219,481) $(361,450) $(401,396) 
Net loss per common share - basic and diluted$(1.56) $(2.02) $(3.18) $(3.75) 
Weighted-average common shares used to compute basic and diluted net loss per common share114,911  108,576  113,830  106,997  
Statements of Comprehensive Loss
Net loss$(179,229) $(219,481) $(361,450) $(401,396) 
Other comprehensive (loss) income:
Unrealized (loss) gain on marketable debt securities(1,796) 462  2,249  822  
Foreign currency translation571  842  911  842  
Defined benefit pension plans, net of tax72  (4,282) 146  (4,282) 
Total other comprehensive (loss) income(1,153) (2,978) 3,306  (2,618) 
Comprehensive loss$(180,382) $(222,459) $(358,144) $(404,014) 




The accompanying notes are an integral part of these condensed consolidated financial statements.
6

ALNYLAM PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)

Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance as of December 31, 2019112,188  $1,122  $5,201,176  $(36,518) $(3,727,088) $1,438,692  
Exercise of common stock options, net of tax withholdings976  9  54,212  —  —  54,221  
Issuance of common stock under equity plans4  —  —  —  —  —  
Stock-based compensation expense related to equity-classified awards—  —  34,578  —  —  34,578  
Other comprehensive income—  —  —  4,459  —  4,459  
Net loss—  —  —  —  (182,221) (182,221) 
Balance as of March 31, 2020113,168  1,131  5,289,966  (32,059) (3,909,309) 1,349,729  
Exercise of common stock options, net of tax withholdings1,233  12  91,861  —  —  91,873  
Issuance of common stock under equity plans283  3  5,298  —  —  5,301  
Issuance of common stock to strategic partners, net of closing costs963  10  99,488  —  —  99,498  
Stock-based compensation expense related to equity-classified awards—  —  33,707  —  —  33,707  
Other comprehensive loss—  —  —  (1,153) —  (1,153) 
Net loss—  —  —  —  (179,229) (179,229) 
Balance as of June 30, 2020115,647  $1,156  $5,520,320  $(33,212) $(4,088,538) $1,399,726  

The accompanying notes are an integral part of these condensed consolidated financial statements.
7

ALNYLAM PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
Common StockAdditional
Paid-in
Capital
Accumulated
Other
Comprehensive
Loss
Accumulated
Deficit
Total
Stockholders’
Equity
SharesAmount
Balance as of December 31, 2018101,177  $1,011  $4,175,139  $(33,213) $(2,840,972) $1,301,965  
Exercise of common stock options, net of tax withholdings207  3  11,406  —  —  11,409  
Issuance of common stock under equity plans4  —  (58) —  —  (58) 
Issuance of common stock under benefit plans12  —  784  —  —  784  
Issuance of common stock, net of costs5,000  50  381,850  —  —  381,900  
Stock-based compensation expense related to equity-classified awards—  —  32,541  —  —  32,541  
Other comprehensive income, net of tax—  —  —  360  —  360  
Net loss—  —  —  —  (181,915) (181,915) 
Balance as of March 31, 2019106,400  1,064  4,601,662  (32,853) (3,022,887) 1,546,986  
Exercise of common stock options, net of tax withholdings203  2  6,180  —  —  6,182  
Issuance of common stock under equity plans55  —  4,022  —  —  4,022  
Issuance of common stock under benefit plans12  —  1,089  —  —  1,089  
Issuance of common stock to strategic partners, net of closing costs4,444  44  390,533  —  —  390,577  
Stock-based compensation expense related to equity-classified awards—  30,798  —  —  30,798  
Other comprehensive loss, net of tax—  —  (2,978) (2,978) 
Net loss—  —  —  (219,481) (219,481) 
Balance as of June 30, 2019111,114  $1,110  $5,034,284  $(35,831) $(3,242,368) $1,757,195  

The accompanying notes are an integral part of these condensed consolidated financial statements.
8

ALNYLAM PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

Six Months Ended June 30,
20202019
Cash flows from operating activities:
Net loss$(361,450) $(401,396) 
Non-cash adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization15,813  7,694  
Amortization and interest accretion related to operating leases18,971  18,584  
Non-cash imputed interest expense on liability related to the sale of future royalties27,248    
Stock-based compensation68,333  62,635  
Unrealized gain on marketable equity securities(69,643)   
Change in fair value of liability obligation  (9,422) 
Other4,372  (1,924) 
Changes in operating assets and liabilities:
Accounts receivable, net(26,099) (11,934) 
Proceeds from landlord lease incentive for tenant improvements1,991  18,700  
Inventory(24,178) (15,040) 
Prepaid expenses and other assets(13,560) 5,319  
Accounts payable, accrued expenses and other liabilities2,036  43,559  
Deferred revenue(7,090) 399,173  
Operating lease liability(18,235) (15,763) 
Net cash (used in) provided by operating activities(381,491) 100,185  
Cash flows from investing activities:
Purchases of property, plant and equipment(36,275) (65,293) 
Purchases of marketable debt securities(1,140,421) (834,563) 
Sales and maturities of marketable securities859,354  713,106  
Purchases of restricted investments(9,900)   
Other investing activities(300)   
Net cash used in investing activities(327,542) (186,750) 
Cash flows from financing activities:
Proceeds from exercise of stock options and other types of equity, net151,512  21,641  
Proceeds from the sale of future royalties500,000    
Proceeds from issuance of common stock to strategic partners, net of closing costs99,498  400,000  
Proceeds from public offering, net of costs  381,900  
Payment of transaction costs related to sale of future royalties and term loan facility(8,128)   
Net cash provided by financing activities742,882  803,541  
Effect of exchange rate changes on cash, cash equivalents and restricted cash(196) (3) 
Net increase in cash, cash equivalents and restricted cash33,653  716,973  
Cash, cash equivalents and restricted cash, beginning of period549,628  422,631  
Cash, cash equivalents and restricted cash, end of period$583,281  $1,139,604  
Supplemental disclosure of noncash investing and financing activities:
Capital expenditures included in accounts payable and accrued expenses$6,402  $25,893  
Lease liabilities arising from obtaining right-of-use assets$15,077  $1,728  
Receivable and liability related to the sale of future royalties$500,000  $  
The accompanying notes are an integral part of these condensed consolidated financial statements.
9

ALNYLAM PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


1. NATURE OF BUSINESS
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 RNA 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. We have devoted substantially all of our efforts to business planning, research, development, manufacturing and early commercial efforts, acquiring, filing and expanding intellectual property rights, recruiting management and technical staff, and raising capital.
In August 2018, we received approval for ONPATTRO from the United States Food and Drug Administration, or FDA, and began commercializing and generating product revenues in the U.S., and also received marketing authorization for ONPATTRO from the European Commission, or EC. As of June 30, 2020, we have launched ONPATTRO in the U.S., Europe, Japan and in several additional countries. In November 2019, we received approval for GIVLAARI from the FDA and began commercializing and generating product revenues in the U.S. in December 2019. In March 2020, we received marketing authorization for GIVLAARI from the EC, and as of June 30, 2020, we have launched GIVLAARI in several countries in Europe. Regulatory filings in additional markets are pending or planned for 2020 and beyond for both products.
In April 2020, we entered into a broad strategic financing collaboration with The Blackstone Group Inc. and certain of its affiliates which includes a purchase and sale agreement, a credit agreement, a stock purchase agreement, and potential funding for certain research and development activities, subject to completion of a definitive agreement, under which The Blackstone Group Inc., and certain of its affiliates, will provide up to $2.00 billion to support our advancement of innovative RNAi therapeutics. Each executed agreement is a separate unit of account and was recorded at fair value. Please read Note 5, Note 9 and Note 10, respectively, for additional information regarding each executed agreement set forth above.
2. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
The accompanying condensed consolidated financial statements of Alnylam are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, applicable to interim periods and, in the opinion of management, include all normal and recurring adjustments that are necessary to state fairly the results of operations for the reported periods. Our condensed consolidated financial statements have also been prepared on a basis substantially consistent with, and should be read in conjunction with, our audited consolidated financial statements for the year ended December 31, 2019, which were included in our Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on February 13, 2020. The year-end condensed consolidated balance sheet data was derived from our audited financial statements but does not include all disclosures required by GAAP. The results of our operations for any interim period are not necessarily indicative of the results of our operations for any other interim period or for a full fiscal year.
The accompanying condensed consolidated financial statements reflect the operations of Alnylam and our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.
Our significant accounting policies are described in Note 2 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2019. Updates to our significant accounting policies, including the liability related to the sale of future royalties accounting policy, resulting from the execution of a purchase and sale agreement with certain affiliates of The Blackstone Group Inc., are discussed below.
Reclassification
Certain prior period amounts in the condensed 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The full extent to which the COVID-19 pandemic will directly or indirectly impact our business, results of operations and financial condition, including sales, expenses, reserves and allowances, the supply of our products and product candidates, clinical trials and research and development costs,
10

ALNYLAM PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain it or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets. We have made estimates of the impact of COVID-19 within our financial statements and there may be changes to those estimates in future periods. Actual results may differ from these estimates.
Liquidity
Based on our current operating plan, we believe that our cash, cash equivalents and marketable debt and equity securities as of June 30, 2020, together with the cash we expect to generate from product sales and under our alliances and strategic financing collaboration, will be sufficient to enable us to advance our long-term strategic goals for multiple years from the filing of this Quarterly Report on Form 10-Q.
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. 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.
Recently Adopted Accounting Pronouncements 
In June 2016, the Financial Accounting Standards Board, or FASB, issued new accounting guidance which requires entities to record expected credit losses for certain financial instruments, including trade receivables, as an allowance that reflects the entity's current estimate of credit losses expected to be incurred. For available-for-sale debt securities in unrealized loss positions, the new standard requires allowances to be recorded instead of reducing the amortized cost of the investment. The new standard became effective for us on January 1, 2020 and did not have a significant impact on our condensed consolidated financial statements and related disclosures.
In August 2018, the FASB issued amendments to accounting guidance that eliminate, add and modify certain disclosure requirements on fair value measurements. The new standard became effective for us on January 1, 2020 and did not have a significant impact on our condensed consolidated financial statements and related disclosures.
In August 2018, the FASB issued new accounting guidance to clarify the accounting for implementation costs in cloud computing arrangements (hosting arrangements). The new standard requires a customer in a cloud computing arrangement to determine which implementation costs to capitalize as assets or expense as incurred. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. The new standard became effective for us on January 1, 2020 and did not have a significant impact on our condensed consolidated financial statements and related disclosures.
In November 2018, the FASB issued new accounting guidance to clarify the interaction between the accounting guidance for collaborative arrangements and revenue from contracts with customers. The new standard became effective for us on January 1, 2020 using a retrospective transition method. This standard did not have a significant impact on our condensed consolidated financial statements and related disclosures.
In December 2019, the FASB issued amendments to accounting guidance that simplify the accounting for income taxes, as part of its initiative to reduce complexity in the accounting standards. The amendments eliminate certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The amendments also clarify and simplify other aspects of the accounting for income taxes. We early adopted the amendments as of January 1, 2020, on a prospective basis. The amendments did not have a significant impact on our condensed consolidated financial statements and related disclosures.
11

ALNYLAM PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3. NET PRODUCT REVENUES
Net product revenues consist of the following:
Three Months Ended June 30,Six Months Ended June 30,
(In thousands)2020201920202019
United States$40,929  $28,192  $83,399  $46,952  
Europe25,357  10,039  46,523  17,570  
Rest of World (primarily Japan)11,247    19,549    
Total$77,533  $38,231  $149,471  $64,522  

Three Months Ended June 30,Six Months Ended June 30,
(In thousands)2020201920202019
ONPATTRO$66,535  $38,231  $133,199  $64,522  
GIVLAARI10,998    16,272    
Total$77,533  $38,231  $149,471  $64,522  
The following table presents the balance of our receivables related to our net product revenues:
(In thousands)As of June 30,
2020
As of December 31,
2019
Receivables included in “Accounts receivable, net”$59,250  $28,082  

4. NET REVENUES FROM COLLABORATIONS
Net revenues from collaborations consist of the following:
Three Months Ended June 30,Six Months Ended June 30,
(In thousands)2020201920202019
Regeneron Pharmaceuticals (Regeneron)$15,413  $700  $34,916  $700  
Vir Biotechnology (Vir)6,448  1,091  12,964  2,019  
The Medicines Company (MDCO)3,878    4,938  1,745  
Sanofi Genzyme (Sanofi)373  4,383  373  8,500  
Other317  309  776  522  
Total$26,429  $6,483  $53,967  $13,486  
The following table presents the balance of our receivables and contract liabilities related to our collaboration agreements:
(In thousands)As of June 30,
2020
As of December 31,
2019
Receivables included in “Accounts receivable, net”$9,865  $14,929  
Contract liabilities included in “Deferred revenue”$152,258  $153,117  
The following table presents revenue recognized as a result of changes in contract liability related to our collaboration agreements:
Three Months Ended June 30,Six Months Ended June 30,
(In thousands)202020192020