0001178670-21-000017.txt : 20210429 0001178670-21-000017.hdr.sgml : 20210429 20210429161215 ACCESSION NUMBER: 0001178670-21-000017 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 71 CONFORMED PERIOD OF REPORT: 20210331 FILED AS OF DATE: 20210429 DATE AS OF CHANGE: 20210429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALNYLAM PHARMACEUTICALS, INC. CENTRAL INDEX KEY: 0001178670 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 770602661 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-36407 FILM NUMBER: 21870690 BUSINESS ADDRESS: STREET 1: 675 WEST KENDALL STREET STREET 2: HENRI A. TERMEER SQUARE CITY: CAMBRIDGE STATE: MA ZIP: 02142 BUSINESS PHONE: (617) 551-8200 MAIL ADDRESS: STREET 1: 675 WEST KENDALL STREET STREET 2: HENRI A. TERMEER SQUARE CITY: CAMBRIDGE STATE: MA ZIP: 02142 FORMER COMPANY: FORMER CONFORMED NAME: ALNYLAM PHARMACEUTICALS INC DATE OF NAME CHANGE: 20020724 10-Q 1 alny-20210331.htm 10-Q alny-20210331
false2021--12-31Q1000117867000011786702021-01-012021-03-31xbrli:shares00011786702021-04-23iso4217:USD00011786702021-03-3100011786702020-12-31iso4217:USDxbrli:shares0001178670us-gaap:ProductMember2021-01-012021-03-310001178670us-gaap:ProductMember2020-01-012020-03-310001178670us-gaap:CollaborativeArrangementMember2021-01-012021-03-310001178670us-gaap:CollaborativeArrangementMember2020-01-012020-03-3100011786702020-01-012020-03-310001178670us-gaap:CommonStockMember2020-12-310001178670us-gaap:AdditionalPaidInCapitalMember2020-12-310001178670us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001178670us-gaap:RetainedEarningsMember2020-12-310001178670us-gaap:CommonStockMember2021-01-012021-03-310001178670us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001178670us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001178670us-gaap:RetainedEarningsMember2021-01-012021-03-310001178670us-gaap:CommonStockMember2021-03-310001178670us-gaap:AdditionalPaidInCapitalMember2021-03-310001178670us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001178670us-gaap:RetainedEarningsMember2021-03-310001178670us-gaap:CommonStockMember2019-12-310001178670us-gaap:AdditionalPaidInCapitalMember2019-12-310001178670us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001178670us-gaap:RetainedEarningsMember2019-12-3100011786702019-12-310001178670us-gaap:CommonStockMember2020-01-012020-03-310001178670us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310001178670us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001178670us-gaap:RetainedEarningsMember2020-01-012020-03-310001178670us-gaap:CommonStockMember2020-03-310001178670us-gaap:AdditionalPaidInCapitalMember2020-03-310001178670us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-310001178670us-gaap:RetainedEarningsMember2020-03-3100011786702020-03-31alny:productalny:program0001178670country:USalny:ONPATTROMember2021-01-012021-03-310001178670country:USalny:ONPATTROMember2020-01-012020-03-310001178670srt:EuropeMemberalny:ONPATTROMember2021-01-012021-03-310001178670srt:EuropeMemberalny:ONPATTROMember2020-01-012020-03-310001178670alny:NonUSOrEuropeMemberalny:ONPATTROMember2021-01-012021-03-310001178670alny:NonUSOrEuropeMemberalny:ONPATTROMember2020-01-012020-03-310001178670alny:ONPATTROMember2021-01-012021-03-310001178670alny:ONPATTROMember2020-01-012020-03-310001178670country:USalny:GIVLAARIMember2021-01-012021-03-310001178670country:USalny:GIVLAARIMember2020-01-012020-03-310001178670srt:EuropeMemberalny:GIVLAARIMember2021-01-012021-03-310001178670srt:EuropeMemberalny:GIVLAARIMember2020-01-012020-03-310001178670alny:NonUSOrEuropeMemberalny:GIVLAARIMember2021-01-012021-03-310001178670alny:NonUSOrEuropeMemberalny:GIVLAARIMember2020-01-012020-03-310001178670alny:GIVLAARIMember2021-01-012021-03-310001178670alny:GIVLAARIMember2020-01-012020-03-310001178670country:USalny:OXLUMOMember2021-01-012021-03-310001178670country:USalny:OXLUMOMember2020-01-012020-03-310001178670alny:OXLUMOMembersrt:EuropeMember2021-01-012021-03-310001178670alny:OXLUMOMembersrt:EuropeMember2020-01-012020-03-310001178670alny:OXLUMOMember2021-01-012021-03-310001178670alny:OXLUMOMember2020-01-012020-03-310001178670us-gaap:ProductMember2021-03-310001178670us-gaap:ProductMember2020-12-310001178670us-gaap:CollaborativeArrangementMemberalny:RegeneronPharmaceuticalsIncorporationMember2021-01-012021-03-310001178670us-gaap:CollaborativeArrangementMemberalny:RegeneronPharmaceuticalsIncorporationMember2020-01-012020-03-310001178670us-gaap:CollaborativeArrangementMemberalny:NovartisMember2021-01-012021-03-310001178670us-gaap:CollaborativeArrangementMemberalny:NovartisMember2020-01-012020-03-310001178670alny:VirBiotechnologyIncMemberus-gaap:CollaborativeArrangementMember2021-01-012021-03-310001178670alny:VirBiotechnologyIncMemberus-gaap:CollaborativeArrangementMember2020-01-012020-03-310001178670us-gaap:CollaborativeArrangementMemberalny:OtherCollaborationsMember2021-01-012021-03-310001178670us-gaap:CollaborativeArrangementMemberalny:OtherCollaborationsMember2020-01-012020-03-310001178670alny:ClinicalTrialAndManufacturingMemberalny:RegeneronPharmaceuticalsIncorporationMember2021-01-012021-03-310001178670alny:ExternalServicesMemberalny:RegeneronPharmaceuticalsIncorporationMember2021-01-012021-03-310001178670alny:OtherMemberalny:RegeneronPharmaceuticalsIncorporationMember2021-01-012021-03-310001178670alny:ClinicalTrialAndManufacturingMemberalny:RegeneronPharmaceuticalsIncorporationMember2020-01-012020-03-310001178670alny:ExternalServicesMemberalny:RegeneronPharmaceuticalsIncorporationMember2020-01-012020-03-310001178670alny:OtherMemberalny:RegeneronPharmaceuticalsIncorporationMember2020-01-012020-03-310001178670alny:VirBiotechnologyIncMemberalny:ClinicalTrialAndManufacturingMember2021-01-012021-03-310001178670alny:VirBiotechnologyIncMemberalny:ExternalServicesMember2021-01-012021-03-310001178670alny:VirBiotechnologyIncMemberalny:OtherMember2021-01-012021-03-310001178670alny:VirBiotechnologyIncMemberalny:ClinicalTrialAndManufacturingMember2020-01-012020-03-310001178670alny:VirBiotechnologyIncMemberalny:ExternalServicesMember2020-01-012020-03-310001178670alny:VirBiotechnologyIncMemberalny:OtherMember2020-01-012020-03-310001178670alny:ClinicalTrialAndManufacturingMemberalny:NovartisMember2021-01-012021-03-310001178670alny:ExternalServicesMemberalny:NovartisMember2021-01-012021-03-310001178670alny:OtherMemberalny:NovartisMember2021-01-012021-03-310001178670alny:ClinicalTrialAndManufacturingMemberalny:NovartisMember2020-01-012020-03-310001178670alny:ExternalServicesMemberalny:NovartisMember2020-01-012020-03-310001178670alny:OtherMemberalny:NovartisMember2020-01-012020-03-310001178670alny:ClinicalTrialAndManufacturingMemberalny:SanofiGenzymeMember2021-01-012021-03-310001178670alny:ExternalServicesMemberalny:SanofiGenzymeMember2021-01-012021-03-310001178670alny:SanofiGenzymeMemberalny:OtherMember2021-01-012021-03-310001178670alny:ClinicalTrialAndManufacturingMemberalny:SanofiGenzymeMember2020-01-012020-03-310001178670alny:ExternalServicesMemberalny:SanofiGenzymeMember2020-01-012020-03-310001178670alny:SanofiGenzymeMemberalny:OtherMember2020-01-012020-03-310001178670alny:ClinicalTrialAndManufacturingMember2021-01-012021-03-310001178670alny:ExternalServicesMember2021-01-012021-03-310001178670alny:OtherMember2021-01-012021-03-310001178670alny:ClinicalTrialAndManufacturingMember2020-01-012020-03-310001178670alny:ExternalServicesMember2020-01-012020-03-310001178670alny:OtherMember2020-01-012020-03-310001178670alny:GlobalStrategicCollaborationMemberalny:RegeneronPharmaceuticalsIncorporationMember2019-04-082019-04-080001178670alny:GlobalStrategicCollaborationMembersrt:MaximumMemberalny:RegeneronPharmaceuticalsIncorporationMember2019-04-082019-04-080001178670alny:GlobalStrategicCollaborationMemberalny:FundingAtProgramInitiationMemberalny:RegeneronPharmaceuticalsIncorporationMember2019-04-080001178670alny:GlobalStrategicCollaborationMemberalny:FundingAtLeadCandidateIdentificationMemberalny:RegeneronPharmaceuticalsIncorporationMember2019-04-080001178670alny:GlobalStrategicCollaborationMemberalny:FundingAnAnnualDiscoveryMemberalny:RegeneronPharmaceuticalsIncorporationMember2019-04-08xbrli:pure0001178670alny:GlobalStrategicCollaborationMembersrt:MaximumMemberalny:RegeneronPharmaceuticalsIncorporationMember2019-04-080001178670alny:GlobalStrategicCollaborationMemberalny:ResearchServicesObligationMemberalny:RegeneronPharmaceuticalsIncorporationMember2021-03-310001178670alny:GlobalStrategicCollaborationMemberalny:ResearchServicesObligationMemberalny:RegeneronPharmaceuticalsIncorporationMember2021-01-012021-03-310001178670alny:GlobalStrategicCollaborationMemberalny:C5LicenseObligationMemberalny:RegeneronPharmaceuticalsIncorporationMember2021-03-310001178670alny:GlobalStrategicCollaborationMemberalny:C5LicenseObligationMemberalny:RegeneronPharmaceuticalsIncorporationMember2021-01-012021-03-310001178670alny:GlobalStrategicCollaborationMemberalny:RegeneronPharmaceuticalsIncorporationMemberalny:C5CoCoObligationMember2021-03-310001178670alny:GlobalStrategicCollaborationMemberalny:RegeneronPharmaceuticalsIncorporationMemberalny:C5CoCoObligationMember2021-01-012021-03-310001178670alny:GlobalStrategicCollaborationMemberalny:RegeneronPharmaceuticalsIncorporationMember2021-01-012021-03-310001178670alny:GlobalStrategicCollaborationMemberalny:RegeneronPharmaceuticalsIncorporationMember2021-03-312021-03-310001178670alny:GlobalStrategicCollaborationMemberalny:ResearchServicesObligationMemberalny:RegeneronPharmaceuticalsIncorporationMember2021-03-312021-03-310001178670alny:GlobalStrategicCollaborationMemberalny:ResearchServicesObligationMemberalny:RegeneronPharmaceuticalsIncorporationMember2020-12-310001178670alny:GlobalStrategicCollaborationMemberalny:C5LicenseObligationMemberalny:RegeneronPharmaceuticalsIncorporationMember2021-03-312021-03-310001178670alny:GlobalStrategicCollaborationMemberalny:C5LicenseObligationMemberalny:RegeneronPharmaceuticalsIncorporationMember2020-12-310001178670alny:GlobalStrategicCollaborationMemberalny:RegeneronPharmaceuticalsIncorporationMemberalny:C5CoCoObligationMember2021-03-312021-03-310001178670alny:GlobalStrategicCollaborationMemberalny:RegeneronPharmaceuticalsIncorporationMemberalny:C5CoCoObligationMember2020-12-310001178670alny:GlobalStrategicCollaborationMemberalny:RegeneronPharmaceuticalsIncorporationMember2021-03-310001178670alny:GlobalStrategicCollaborationMemberalny:RegeneronPharmaceuticalsIncorporationMember2020-12-310001178670alny:GlobalStrategicCollaborationMemberalny:ResearchServicesObligationMemberalny:RegeneronPharmaceuticalsIncorporationMember2020-01-012020-03-310001178670alny:GlobalStrategicCollaborationMemberalny:C5LicenseObligationMemberalny:RegeneronPharmaceuticalsIncorporationMember2020-01-012020-03-310001178670alny:GlobalStrategicCollaborationMemberalny:RegeneronPharmaceuticalsIncorporationMemberalny:C5CoCoObligationMember2020-01-012020-03-310001178670alny:GlobalStrategicCollaborationMemberalny:RegeneronPharmaceuticalsIncorporationMember2020-01-012020-03-310001178670alny:NovartisMemberalny:ProductAlliancesMember2013-02-012021-03-310001178670alny:NovartisMemberalny:ProductAlliancesMember2013-02-012013-02-280001178670alny:NovartisMembersrt:MinimumMemberalny:ProductAlliancesMember2021-03-310001178670alny:NovartisMembersrt:MaximumMemberalny:ProductAlliancesMember2021-03-310001178670alny:VirBiotechnologyIncMember2017-10-012017-10-310001178670alny:VirBiotechnologyIncMember2017-10-310001178670alny:VirBiotechnologyIncMember2020-03-012020-03-310001178670alny:VirBiotechnologyIncMember2020-06-012020-06-300001178670alny:VirBiotechnologyIncMember2021-01-012021-03-31alny:candidate0001178670alny:VirBiotechnologyIncMember2021-03-310001178670alny:VirBiotechnologyIncMember2021-03-312021-03-310001178670alny:BlackstoneGroupIncMemberus-gaap:CollaborativeArrangementMember2020-04-100001178670alny:BlackstoneGroupIncMemberus-gaap:CollaborativeArrangementMember2021-01-012021-03-310001178670srt:ScenarioForecastMemberalny:BlackstoneGroupIncMemberus-gaap:CollaborativeArrangementMember2030-01-010001178670alny:BlackstoneGroupIncMemberus-gaap:CollaborativeArrangementMember2020-04-012020-04-300001178670alny:BlackstoneGroupIncMemberus-gaap:CollaborativeArrangementMember2021-03-310001178670alny:BlackstoneGroupIncMemberus-gaap:CollaborativeArrangementMember2020-12-310001178670us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001178670us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001178670us-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001178670us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-03-310001178670us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001178670us-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001178670us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001178670us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-03-310001178670us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001178670us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001178670us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001178670us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-03-310001178670us-gaap:FairValueMeasurementsRecurringMember2021-03-310001178670us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001178670us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001178670us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2021-03-310001178670us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001178670us-gaap:FairValueInputsLevel1Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001178670us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001178670us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-12-310001178670us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001178670us-gaap:FairValueInputsLevel1Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001178670us-gaap:FairValueInputsLevel2Memberus-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001178670us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-12-310001178670us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001178670us-gaap:FairValueInputsLevel1Memberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001178670us-gaap:FairValueInputsLevel2Memberus-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001178670us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMemberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-12-310001178670us-gaap:FairValueMeasurementsRecurringMember2020-12-310001178670us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001178670us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001178670us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2020-12-310001178670us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2021-03-310001178670us-gaap:USTreasurySecuritiesMember2021-03-310001178670us-gaap:USGovernmentSponsoredEnterprisesDebtSecuritiesMember2020-12-310001178670us-gaap:USTreasurySecuritiesMember2020-12-310001178670us-gaap:OtherAssetsMember2021-03-310001178670us-gaap:OtherAssetsMember2020-12-310001178670alny:AccumulatedLossOnInvestmentInJointVentureMember2020-12-310001178670us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-310001178670us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-12-310001178670us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310001178670alny:AccumulatedLossOnInvestmentInJointVentureMember2021-01-012021-03-310001178670us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-03-310001178670us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-01-012021-03-310001178670us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-03-310001178670alny:AccumulatedLossOnInvestmentInJointVentureMember2021-03-310001178670us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-03-310001178670us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-03-310001178670us-gaap:AccumulatedTranslationAdjustmentMember2021-03-310001178670alny:AccumulatedLossOnInvestmentInJointVentureMember2019-12-310001178670us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-12-310001178670us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2019-12-310001178670us-gaap:AccumulatedTranslationAdjustmentMember2019-12-310001178670alny:AccumulatedLossOnInvestmentInJointVentureMember2020-01-012020-03-310001178670us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-01-012020-03-310001178670us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-01-012020-03-310001178670us-gaap:AccumulatedTranslationAdjustmentMember2020-01-012020-03-310001178670alny:AccumulatedLossOnInvestmentInJointVentureMember2020-03-310001178670us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-03-310001178670us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2020-03-310001178670us-gaap:AccumulatedTranslationAdjustmentMember2020-03-31alny:tranche0001178670us-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2020-04-100001178670us-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2020-12-312020-12-310001178670alny:TrancheTwoLoanMemberus-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2021-03-310001178670alny:TrancheThreeLoanMemberus-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2021-03-310001178670us-gaap:LineOfCreditMemberalny:ONPATTROAndGIVLAARIMemberalny:Tranche2LoanAndTranche3LoanMemberus-gaap:SecuredDebtMember2020-04-100001178670us-gaap:LineOfCreditMemberus-gaap:SecuredDebtMemberus-gaap:LondonInterbankOfferedRateLiborSwapRateMember2020-04-102020-04-100001178670us-gaap:LineOfCreditMembersrt:MinimumMemberus-gaap:SecuredDebtMemberus-gaap:LondonInterbankOfferedRateLiborSwapRateMember2020-04-100001178670us-gaap:LineOfCreditMemberus-gaap:SecuredDebtMemberus-gaap:BaseRateMember2020-04-102020-04-100001178670us-gaap:LineOfCreditMembersrt:MinimumMemberus-gaap:SecuredDebtMemberus-gaap:BaseRateMember2020-04-100001178670us-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2020-04-102020-04-100001178670us-gaap:LineOfCreditMemberus-gaap:SecuredDebtMemberus-gaap:LondonInterbankOfferedRateLiborSwapRateMember2020-12-012020-12-310001178670us-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2020-12-012020-12-310001178670us-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2021-03-310001178670us-gaap:LineOfCreditMemberus-gaap:SecuredDebtMember2020-12-310001178670alny:BlackstoneLifeSciencesMemberalny:VutrisiranAndALNAGTMemberus-gaap:CollaborativeArrangementMember2020-08-012020-08-310001178670alny:BlackstoneLifeSciencesMemberalny:HELIOSBPhase3ClinicalTrialMemberus-gaap:CollaborativeArrangementMember2020-08-012020-08-310001178670alny:BlackstoneLifeSciencesMemberus-gaap:CollaborativeArrangementMemberalny:ALNAGTPhase2ClinicalTrialMember2020-08-012020-08-310001178670alny:BlackstoneLifeSciencesMemberalny:ALNAGTPhase3ClinicalTrialMemberus-gaap:CollaborativeArrangementMember2020-08-012020-08-310001178670alny:BlackstoneLifeSciencesMemberalny:VutrisiranMemberus-gaap:CollaborativeArrangementMember2020-08-012020-08-310001178670alny:BlackstoneLifeSciencesMember2021-03-310001178670us-gaap:DerivativeMember2020-12-310001178670us-gaap:DerivativeMember2021-01-012021-03-310001178670us-gaap:DerivativeMember2021-03-310001178670us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-03-310001178670us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-03-310001178670us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-03-310001178670us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-01-012020-03-310001178670us-gaap:EmployeeStockOptionMember2021-01-012021-03-310001178670us-gaap:EmployeeStockOptionMember2020-01-012020-03-310001178670us-gaap:RestrictedStockMember2021-01-012021-03-310001178670us-gaap:RestrictedStockMember2020-01-012020-03-31


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 March 31, 2021
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 April 23, 2021, the registrant had 117,545,040 shares of Common Stock, $0.01 par value per share, outstanding.




ALNYLAM PHARMACEUTICALS, INC.
QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS
PAGE
NUMBER

“Alnylam,” ONPATTRO®, GIVLAARI®, OXLUMO®, 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, emerging or future variants of COVID-19 or any future pandemic, such as the scope and duration of the pandemic, government actions and restrictive measures implemented in response, the broad availability of safe and effective vaccine(s), 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 and investigational therapeutics, including ONPATTRO, GIVLAARI, OXLUMO, Leqvio®, vutrisiran and fitusiran;
our plans for additional global regulatory filings and the continuing product launches of ONPATTRO, GIVLAARI, OXLUMO and our partner's plans with respect to Leqvio (inclisiran);
our expectations regarding the advancement by our partner of inclisiran through United States, or U.S., regulatory review and toward the market;
our expectations regarding potential market size for, and the successful commercialization of, ONPATTRO, GIVLAARI, OXLUMO, Leqvio (inclisiran) or any future products, including vutrisiran;
our ability to obtain and maintain regulatory approvals and pricing and reimbursement for ONPATTRO, GIVLAARI, OXLUMO or any future products, including vutrisiran, and our partners' ability with respect to Leqvio (inclisiran) and fitusiran;
the progress of our research and development programs;
our current and anticipated clinical trials and expectations regarding the reporting of data from these trials;
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;
the status of our manufacturing operations and any delays, interruptions or failures in the manufacture and supply of ONPATTRO, GIVLAARI, OXLUMO, or any of our product candidates (or other product candidates being developed and commercialized by our partners) by our or their contract manufacturers or by us or our partners;
our progress continuing to build and leverage global commercial infrastructure;
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, GIVLAARI, OXLUMO and Leqvio, as well as our product candidates, and, our, or with respect to Leqvio (inclisiran) or fitusiran, our partners', ability to compete against such products;
our ability to manage our growth and operating expenses;
our views and plans with respect to our 5-year Alnylam P5x25 strategy and our intentions to achieve the metrics associated with this strategy, including to become a top five biotech company in market capitalization by the end of 2025;
our belief that the funding provided by our strategic financing collaboration with The Blackstone Group Inc., or Blackstone, and certain of its affiliates should enable us to achieve a self-sustainable profile without the need for future equity financing;
our expectations regarding the length of time our current cash, cash equivalents and marketable securities will support our operations based on our current operating plan;
3

our dependence on third parties for development, manufacture and distribution of products;
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 or of any current or future government investigation, including any investigation related to the subpoena received on or about April 9, 2021 pertaining to our marketing and promotion of ONPATTRO (patisiran) in the U.S.;
regulatory developments in the 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 on Form 10-Q 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 (or related pandemic caused by coronavirus variants) 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

SUMMARY OF MATERIAL RISKS ASSOCIATED WITH OUR BUSINESS
Our business is subject to numerous risks and uncertainties that you should be aware of before making an investment decision, including those highlighted in the section entitled "Risk Factors." These risks include, but are not limited to, the following:
Business Related Risks – Risks Related to Our Financial Results
The current pandemic of the novel coronavirus, or COVID-19, and the future outbreak of other highly infectious or contagious diseases, could have a material adverse impact on our business, financial condition and results of operations, including our commercial operations and sales, clinical trials and pre-clinical studies.
We are an early-stage commercial company and the marketing and sale of ONPATTRO, GIVLAARI, OXLUMO or any future products may be unsuccessful or less successful than anticipated.
We have a history of losses and may never become and remain consistently profitable.
We will require substantial funds to continue our research, development and commercialization activities.
Although we sold a portion of the expected royalty stream and commercial milestones related to global sales of Leqvio by Novartis AG, or Novartis, we are entitled to retain the remaining portion of such future royalties and, if certain specified thresholds are met, to the remaining portion of commercial milestone payments, and any negative developments related to Leqvio (inclisiran), such as a delay in the expected timing of the resubmission by Novartis of the New Drug Application, or NDA, for inclisiran, could have a material adverse effect on the timing or amount of those payments.
Risks Related to Our Dependence on Third Parties
We may not be able to execute our business strategy if we are unable to maintain existing or enter into new alliances with other companies that can provide business and scientific capabilities and funds for the development and commercialization of certain of our product candidates.
If any collaborator materially amends, terminates or fails to perform its obligations under agreements with us, the development and commercialization of our certain of product candidates could be delayed or terminated and we could suffer other economic harm.
We have limited manufacturing experience and resources and we must incur significant costs to develop this expertise and/or rely on third parties to manufacture our products.
We rely on third parties to conduct our clinical trials, and if they fail to fulfill their obligations, our development plans may be adversely affected.
Risks Related to Managing Our Operations
If we are unable to attract and retain qualified key management and scientists, development, medical and commercial staff, consultants and advisors, our ability to implement our business plan may be adversely affected.
We may have difficulty expanding our operations successfully as we continue our evolution from a U.S.- and EU-based company primarily involved in discovery, pre-clinical testing and clinical development into a global company that develops and commercializes multiple drugs.
Industry Related Risks – Risks Related to Development, Clinical Testing and Regulatory Approval of Our Product Candidates and the Commercialization of Our Approved Products
Any product candidates we or our partners develop may fail in development or be delayed to a point where they do not become commercially viable.
We or our partners may be unable to obtain U.S. or foreign regulatory approval for our or our partnered product candidates.
Even if we or our partners obtain regulatory approvals, our marketed drugs will be subject to ongoing regulatory oversight.
Even if we receive regulatory approval to market our product candidates, and our collaborators receive regulatory approval to market product candidates discovered by us or developed with our technology, the market may not be receptive to such product candidates upon their commercial introduction, which could prevent us from becoming profitable.
We have limited commercial experience and newly established capabilities for marketing, sales, market access and distribution, and expect to continue to invest significant financial and management resources to continue to build these capabilities, and our commercial efforts may not be successful.
5

The patient populations suffering from hereditary transthyretin-mediated amyloidosis, acute hepatic porphyria and primary hyperoxaluria type 1 are small and have not been established with precision.
We may incur significant liability if enforcement authorities allege or determine that we are engaging in commercial activities or promoting our commercially approved products in a way that violates applicable regulations.
Any drugs we develop may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, thereby harming our business.
Governments outside the U.S. may impose strict price controls, and the U.S. government may impose price controls or reference pricing, which may adversely affect our revenues.
Risks Related to Patents, Licenses and Trade Secrets
If we are not able to obtain and enforce patent protection for our discoveries, our ability to develop and commercialize our product candidates will be harmed.
We license patent rights from third-party owners. If such owners do not properly or successfully obtain, maintain or enforce the patents underlying such licenses, our competitive position and business prospects may be harmed.
Other companies or organizations may challenge our patent rights or may assert patent rights that prevent us from developing and commercializing our products.
If we become involved in patent litigation or other proceedings related to a determination of rights, we could incur substantial costs and expenses, substantial liability for damages or be required to stop our product development and commercialization efforts.
If we fail to comply with our obligations under any licenses or related agreements, we may be required to pay damages and could lose license or other rights that are necessary for developing, commercializing and protecting our RNAi technology.
Risks Related to Competition
The pharmaceutical market is intensely competitive. If we are unable to compete effectively with existing drugs, new treatment methods and new technologies, we may be unable to commercialize successfully any drugs that we or our collaborators develop.
We face competition from other companies that are working to develop novel drugs and technology platforms using technology similar to ours.
Risks Related to Our Common Stock
If our stock price fluctuates, purchasers of our common stock could incur substantial losses.
We may incur significant costs from class action litigation.
Future sales of shares of our common stock, including by our significant stockholders, us or our directors and officers, could cause the price of our common stock to decline.
Regeneron’s ownership of our common stock could delay or prevent a change in corporate control.
The summary risk factors described above should be read together with the text of the full risk factors below, in the section entitled "Risk Factors" and the other information set forth in this annual report on Form 10-K, including our consolidated financial statements and the related notes, as well as in other documents that we file with the SEC. The risks summarized above or described in full below are not the only risks that we face. Additional risks and uncertainties not precisely known to us, or that we currently deem to be immaterial may also materially adversely affect our business, financial condition, results of operations and future growth prospects.


6


PART I. FINANCIAL INFORMATION

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

March 31, 2021December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents$379,543 $496,580 
Marketable debt securities1,273,027 1,333,182 
Marketable equity securities56,967 44,633 
Accounts receivable, net110,626 102,413 
Inventory73,940 75,202 
Prepaid expenses and other current assets75,980 62,767 
Receivable related to the sale of future royalties500,000 500,000 
Total current assets2,470,083 2,614,777 
Property, plant and equipment, net464,572 465,029 
Operating lease right-of-use assets237,213 241,485 
Restricted investments40,725 40,725 
Other assets42,676 45,045 
Total assets$3,255,269 $3,407,061 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$45,381 $51,966 
Accrued expenses280,527 355,909 
Operating lease liability38,917 36,872 
Deferred revenue116,340 127,207 
Liability related to the sale of future royalties13,660 13,316 
Total current liabilities494,825 585,270 
Operating lease liability, net of current portion288,015 293,039 
Deferred revenue, net of current portion208,123 225,094 
Long-term debt191,590 191,278 
Liability related to the sale of future royalties, net of current portion1,086,065 1,058,225 
Other liabilities60,461 37,908 
Total liabilities2,329,079 2,390,814 
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 March 31, 2021 and December 31, 2020
  
Common stock, $0.01 par value per share, 250,000 shares authorized; 117,321 shares issued and outstanding as of March 31, 2021; 116,427 shares issued and outstanding as of December 31, 2020
1,173 1,164 
Additional paid-in capital5,747,394 5,644,074 
Accumulated other comprehensive loss(36,717)(43,622)
Accumulated deficit(4,785,660)(4,585,369)
Total stockholders’ equity926,190 1,016,247 
Total liabilities and stockholders’ equity$3,255,269 $3,407,061 
The accompanying notes are an integral part of these condensed consolidated financial statements.
7

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

Three Months Ended March 31,
20212020
Statements of Operations
Revenues:
Net product revenues$135,769 $71,938 
Net revenues from collaborations41,797 27,538 
Total revenues177,566 99,476 
Operating costs and expenses:
Cost of goods sold23,023 13,302 
Cost of collaborations8,039  
Research and development185,899 169,571 
Selling, general and administrative146,859 126,761 
Total operating costs and expenses363,820 309,634 
Loss from operations(186,254)(210,158)
Other (expense) income:
Interest expense(32,515) 
Interest income450 5,480 
Other income, net19,044 23,032 
Total other (expense) income(13,021)28,512 
Loss before income taxes(199,275)(181,646)
Provision for income taxes(1,016)(575)
Net loss$(200,291)$(182,221)
Net loss per common share - basic and diluted$(1.71)$(1.62)
Weighted-average common shares used to compute basic and diluted net loss per common share117,080 112,748 
Statements of Comprehensive Loss
Net loss$(200,291)$(182,221)
Other comprehensive (loss) income:
Unrealized (loss) gain on marketable securities(1)4,045 
Foreign currency translation gains6,848 340 
Defined benefit pension plans, net of tax58 74 
Total other comprehensive income6,905 4,459 
Comprehensive loss$(193,386)$(177,762)




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

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, 2020116,427 $1,164 $5,644,074 $(43,622)$(4,585,369)$1,016,247 
Exercise of common stock options, net of tax withholdings614 6 47,028 — — 47,034 
Issuance of common stock under equity plans280 3 (3)— —  
Stock-based compensation expense related to equity-classified awards— — 56,295 — — 56,295 
Other comprehensive income— — — 6,905 — 6,905 
Net loss— — — — (200,291)(200,291)
Balance as of March 31, 2021117,321 $1,173 $5,747,394 $(36,717)$(4,785,660)$926,190 


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 







The accompanying notes are an integral part of these condensed consolidated financial statements.
9

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

Three Months Ended March 31,
20212020
Cash flows from operating activities:
Net loss$(200,291)$(182,221)
Non-cash adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization12,601 7,613 
Amortization and interest accretion related to operating leases10,261 9,393 
Non-cash interest expense on liability related to the sale of future royalties28,184  
Stock-based compensation55,690 34,578 
Realized and unrealized gain on marketable equity securities(47,016)(24,111)
Other30,777 660 
Changes in operating assets and liabilities:
Accounts receivable, net(10,709)(32,882)
Inventory1,934 (11,952)
Prepaid expenses and other assets(13,654)(19,958)
Accounts payable, accrued expenses and other liabilities(66,573)(14,215)
Deferred revenue(27,804)(4,030)
Operating lease liability(9,060)(9,036)
Net cash used in operating activities(235,660)(246,161)
Cash flows from investing activities:
Purchases of property, plant and equipment(17,178)(19,617)
Purchases of marketable securities(345,954)(396,409)
Sales and maturities of marketable securities438,682 539,614 
Purchases of restricted investments(10,650)(9,900)
Proceeds from maturity of restricted investments10,650  
Other investing activities(4,198) 
Net cash provided by investing activities71,352 113,688 
Cash flows from financing activities:
Proceeds from exercise of stock options and other types of equity, net46,977 53,869 
Proceeds from development derivative4,200  
Net cash provided by financing activities51,177 53,869 
Effect of exchange rate changes on cash, cash equivalents and restricted cash(3,910)(631)
Net decrease in cash, cash equivalents and restricted cash(117,041)(79,235)
Cash, cash equivalents and restricted cash, beginning of period499,046 549,628 
Cash, cash equivalents and restricted cash, end of period$382,005 $470,393 
Supplemental disclosure of noncash investing and financing activities:
Capital expenditures included in accounts payable and accrued expenses$7,289 $6,619 







The accompanying notes are an integral part of these condensed consolidated financial statements.
10

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 early 2021, we launched our Alnylam P5x25 strategy, which focuses on our planned transition to a top five biotech company, as measured by market capitalization, by the end of 2025. With Alnylam P5x25, we aim to deliver transformative rare and prevalent disease medicines for patients around the world through sustainable innovation, delivering exceptional financial performance and driving profitability.
As of March 31, 2021, we have four products that have received marketing approval, including one partnered product, and six late-stage investigational programs advancing towards potential commercialization. We currently generate product revenues from ONPATTRO in the U.S., Europe, Japan and in several additional countries as well as from GIVLAARI and OXLUMO in the U.S. and several countries in Europe.
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, 2020, which were included in our Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on February 11, 2021. 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, 2020.
Use of Estimates
The preparation of financial statements in conformity with 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. In our condensed 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, revenue recognition, research and development expenses, and stock-based compensation. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable. Actual results could differ from those estimates.
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, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and variants thereof, and the actions taken to contain or treat it or vaccinate against it, 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.
11

ALNYLAM PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Liquidity
Based on our current operating plan, we believe that our cash, cash equivalents and marketable securities as of March 31, 2021, together with the cash we expect to generate from product sales and under our current alliances, in addition to our strategic financing collaboration with The Blackstone Group Inc. and certain of its affiliates, will be sufficient to enable us to advance our Alnylam P5x25 strategy for at least the next 12 months from the filing of this Quarterly Report on Form 10-Q.
3. NET PRODUCT REVENUES
Net product revenues consist of the following:
Three Months Ended
March 31,
(In thousands)20212020
ONPATTRO
United States$49,471 $37,196 
Europe40,653 21,166 
Rest of World (primarily Japan)11,827 8,302 
Total$101,951 $66,664 
GIVLAARI
United States$17,762 $5,274 
Europe6,873  
Rest of World 38  
Total$24,673 $5,274 
OXLUMO
United States$1,408 $ 
Europe7,737  
Total$9,145 $ 
Total net product revenues$135,769 $71,938 
The following table presents the balance of our receivables related to our net product revenues:
(In thousands)As of March 31,
2021
As of December 31,
2020
Receivables included in “Accounts receivable, net”$91,516 $68,871 

4. NET REVENUES FROM COLLABORATIONS
Net revenues from collaborations consist of the following:
Three Months Ended March 31,
(In thousands)20212020
Regeneron Pharmaceuticals$30,343 $19,503 
Novartis AG8,111 1,060 
Vir Biotechnology2,822 6,516 
Other521 459 
Total$41,797 $27,538 
12

ALNYLAM PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The following table presents the balance of our receivables and contract liabilities related to our collaboration agreements:
(In thousands)As of March 31, 2021As of December 31, 2020
Receivables included in “Accounts receivable, net”$19,111 $33,542 
Contract liabilities included in “Deferred revenue”$94,759 $120,021 
We recognized revenue of $25.3 million and $14.7 million in the three months ended March 31, 2021 and 2020, respectively, that was included in the contract liability balance at the beginning of the respective period.
In order 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 net revenue, that are directly attributable to our collaboration agreements, by collaboration partner:

Three Months Ended March 31,
20212020
(In thousands)Clinical Trial and ManufacturingExternal ServicesOtherClinical Trial and ManufacturingExternal ServicesOther
Regeneron Pharmaceuticals$4,799 $94 $12,235 $4,612 $ $11,491 
Vir Biotechnology1,029 159 1,355 339 52 1,693 
Novartis AG  3 998  266 
Other11 52 859  17 231 
Total$5,839 $305 $14,452 $5,949 $69 $13,681 
The research and development expenses incurred for each agreement listed 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 revenue from collaborations. For the three months ended March 31, 2021 and 2020, we did not incur material selling, general and administrative expenses related to our collaboration agreements.
Product Alliances
Regeneron Pharmaceuticals, Inc.
In April 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, which became effective on May 21, 2019, or the Effective Date. In connection with the Regeneron Master Agreement, we and Regeneron entered into (i) a binding co-co collaboration term sheet covering the continued development of cemdisiran, our C5 small interfering RNA, or siRNA, currently in Phase 2 development for C5 complement-mediated diseases, as a monotherapy and (ii) a binding license term sheet to evaluate anti-C5 antibody-siRNA combinations for C5 complement-mediated diseases including evaluating the combination of Regeneron’s pozelimab (REGN3918), currently in Phase 2 development, and cemdisiran. The C5 co-co collaboration and license agreements were executed in August 2019.
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 five-year research period, 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 up to $400.0 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-
13

ALNYLAM PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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.
Regeneron will lead 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 will alternate leadership on CNS and liver programs, with the lead party retaining global development and commercial responsibility. For CNS and liver programs, both we and Regeneron will 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. Under the C5 co-co collaboration agreement, we and Regeneron equally share costs and potential future profits on any monotherapy program. 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.
In connection with the Regeneron Master Agreement, Regeneron made an upfront payment of $400.0 million. We are also eligible to receive up to an additional $200.0 million in milestone payments upon achievement of certain criteria during early clinical development for eye and CNS programs. We and Regeneron plan to advance programs directed to up to 30 targets 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.
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 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. Reimbursement of our share of costs will be recognized as a reduction to research and development expense in the condensed consolidated statements of operations and comprehensive loss. In the event that a party exercises its opt-out right, the lead party will be responsible for all costs and expenses incurred in connection with the development and commercialization of the collaboration products under the applicable co-co collaboration agreement, subject to continued sharing of costs through defined points. 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 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.
14

ALNYLAM PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Our obligations under the Regeneron Collaboration 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 that is not available in the marketplace. 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, the cemdisiran monotherapy co-co collaboration agreement is under the scope of ASC 808 as we and Regeneron are both active participants in the development and manufacturing activities and are exposed to significant risks and rewards that are dependent on commercial success of the activities of the arrangement. The development and manufacturing activities are a combined unit of account under the scope of ASC 808 and are not deliverables under ASC 606.
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 future milestones upon the achievement of certain criteria during early clinical development for the eye and CNS programs. 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 ObligationsStandalone Selling PriceTransaction Price AllocatedAccounting Guidance
Research Services Obligation$130,700 $183,100 ASC 606
C5 License Obligation97,600 92,500 ASC 606
C5 Co-Co Obligation364,600 246,000 ASC 808
$521,600 
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 and the C5 License 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. This ratio is applied to the transaction price allocated to each obligation. Management has applied significant judgment in the process of developing our estimates. 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, as of March 31, 2021, the total transaction price was $530.5 million. As of March 31, 2021, the transaction price is comprised of the
15

ALNYLAM PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
upfront payment and variable consideration related to development, manufacture and supply activities. For the C5 Co-Co Obligation accounted for under ASC 808, the transaction price allocated to this obligation is recognized using a proportional performance method. Revenue recognized under this agreement, inclusive of the amount allocated to the C5 Co-Co Obligation, is accounted for as collaboration revenue.
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, in thousands:
Transaction Price AllocatedDeferred Revenue
Performance ObligationsAs of March 31,
2021
As of March 31,
2021
As of December 31,
2020
Accounting Guidance
Research Services Obligation$200,600 $45,100 $54,900 ASC 606
C5 License Obligation83,900 45,200 58,700 ASC 606
C5 Co-Co Obligation246,000 228,900 231,400 ASC 808
$530,500 $319,200 $345,000 
Revenue Recognized During
Performance ObligationsThree Months Ended
March 31, 2021
Three Months Ended
March 31, 2020
Accounting Guidance
Research Services Obligation$9,800 $12,300 ASC 606
C5 License Obligation13,500  ASC 606
C5 Co-Co Obligation2,500 4,200 ASC 808
$25,800 $16,500 
As of March 31, 2021, the aggregate amount of the transaction price allocated to the remaining Research Services Obligation and C5 License Obligation that was unsatisfied was $188.3 million, which is expected to be recognized through the term of the Regeneron Collaboration as the services are performed. This amount excludes the transaction price allocated to the C5 Co-Co Obligation accounted for under ASC 808. Deferred revenue related to the Regeneron Collaboration is classified as either current or non-current in the condensed consolidated balance sheets based on the period the revenue is expected to be recognized.
Novartis AG
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. We refer to this agreement, as amended through the date hereof, as the MDCO License Agreement. On January 6, 2020, Novartis completed its acquisition of MDCO, and assumed all rights and obligations under the MDCO License Agreement.
As of March 31, 2021, we have earned $45.0 million of milestones and upon achievement of certain events, we will be entitled to receive additional milestones, up to an aggregate of $135.0 million, including $25.0 million associated with the U.S. regulatory approval milestone, $10.0 million in other specified regulatory milestones and $100.0 million in specified commercialization milestones. In addition, we will be 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.
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 fundamental RNAi patents covering licensed products under the MDCO License Agreement will expire both in and outside of the U.S. generally between 2016 and 2028. We also estimate that our inclisiran product-specific patents covering licensed products under the MDCO License Agreement will expire in the U.S., Europe, China and Japan in 2036 and elsewhere at the end of 2033. These patent rights are subject to potential patent term extensions and/or supplemental protection certificates
16

ALNYLAM PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
extending such terms in countries where such extensions may become available due to regulatory delay. 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.
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 siRNA product 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.
We evaluated the MDCO License Agreement and concluded that Novartis meets the definition of a customer and that the MDCO License Agreement is a contract. During 2018, we completed the performance obligations identified in the MDCO License Agreement. However, we continue to receive additional orders for supply of certain material. Given Novartis now has the ability to manufacture on its own through its own vendors, such orders will be treated as separate agreements and any associated revenue will be recognized upon transfer of control.
Vir Biotechnology, Inc.
In October 2017, we and Vir Biotechnology, Inc., or Vir, entered into a collaboration and license agreement, or the Vir Agreement, for the development and commercialization of RNAi therapeutics for infectious diseases, including chronic hepatitis B virus, or HBV, infection.
Pursuant to the Vir Agreement, we granted to Vir an exclusive license to develop, manufacture and commercialize ALN-HBV02 (VIR-2218), for all uses and purposes other than certain excluded fields, as set forth in the Vir Agreement. In addition, we granted Vir an exclusive option for up to four additional RNAi therapeutic programs for the treatment of infectious diseases. Under the terms of the Vir Agreement, for each product arising from the HBV program, including ALN-HBV02, we retained the right to opt into a profit-sharing arrangement prior to the start of a Phase 3 clinical trial. In addition, we have the right on a product-by-product basis with respect to each additional infectious disease program that Vir elects to pursue, to opt into a profit-sharing arrangement for each such product at any time during a specified period prior to the initiation of a Phase 3 clinical trial for each such product.
Pursuant to the Vir Agreement, Vir paid us an upfront fee of $10.0 million and issued to us 1,111,111 shares of its common stock. Under the Vir Agreement, we may also receive milestone payments upon the achievement of certain development, regulatory and commercial milestones, as well as royalties on the net sales of licensed products ranging from high-single-digit to sub-teen double-digit percentages. In March 2020, we achieved a development milestone relating to ALN-HBV02 and earned a $15.0 million cash milestone and 1,111,111 shares of Vir's common stock, which were received in the second quarter of 2020. In June 2020, we earned and received a $10.0 million payment from Vir related to Vir's sublicense for ALN-HBV02 in China. 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 or any royalty payments under the Vir Agreement.
In March and April 2020, we entered into amendments to the Vir Agreement to expand our collaboration to include the development and commercialization of RNAi therapeutics targeting SARS-CoV-2, the virus that causes the disease COVID-19, along with three additional targets focused on human host factors for SARS-CoV-2, including angiotensin converting enzyme-2 and transmembrane protease, serine 2 and potentially a third mutually selected host factor target. Under the Vir amendments, we and Vir were each responsible for our own pre-clinical development costs incurred in performing our allocated responsibilities under an agreed-upon initial pre-clinical development plan. Under the original agreements, we and Vir agreed to equally share certain costs incurred in connection with the manufacture of non-GMP drug product required for pre-clinical development prior to filing an IND for the first product in the coronavirus program. We also agreed that Vir would lead all development and commercialization of any selected development candidates.
In December 2020, we signed a letter agreement to amend the Vir Agreement such that we are solely responsible for conducting pre-clinical research activities under the pre-clinical development plan, related to the COVID-19 activities in the March and April 2020 amendments, at our discretion and sole expense, and effective as of July 1, 2020, we are responsible for all pre-clinical development costs incurred under such plan for such COVID-19 related activities.
Unless terminated earlier in accordance with the terms of the agreement, the Vir Agreement expires on a licensed product-by-product and country-by-country basis upon expiration of all royalty payment obligations under the agreement. If Vir does not exercise its option for an infectious disease program, the Vir Agreement will expire upon the expiration of the applicable option period with respect to such program. However, if we exercise our profit-sharing option for any product, the term of the agreement will continue until the expiration of the profit-sharing arrangement for such product.
17

ALNYLAM PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Either party may terminate the agreement in the event the other party fails to cure a material breach, or upon patent-related challenges by the other party. In addition, Vir has the right to terminate the agreement on a program-by-program basis or in its entirety for any reason on 90 days’ written notice.
We identified one performance obligation under the Vir Agreement, as amended, comprised of: i) the exclusive license to develop, manufacture and commercialize RNAi therapeutics (including ALN-HBV02); ii) the obligation to deliver four additional development candidates and supply product for each such RNAi therapeutic program; and iii) the obligation to deliver up to four development candidates and supply product for RNAi therapeutic programs targeting SARS-CoV-2. The license is not distinct from the services, including the obligation to deliver development candidates and supply product, as Vir cannot benefit on its own from the value of the license without receipt of such services and supply.
We measure proportional performance over time using an input method based on cost incurred relative to the total estimated costs for the identified performance obligation, on a quarterly basis, by determining the proportion of effort incurred as a percentage of total effort we expect to expend. This ratio is applied to the total transaction price. Management has applied significant judgment in the process of developing our estimates. Any changes to these estimates will be recognized in the period in which they change as a cumulative catch up. As of March 31, 2021, the total transaction price was determined to be $110.1 million, and is comprised of the upfront payment, fair value of non-cash equity consideration at contract inception, milestones achieved and variable consideration related to development, manufacture and supply activities. We utilized the expected value method to determine the amount of reimbursement for these activities. The total transaction price is allocated entirely to the single performance obligation. We determined any variable consideration related to sales-based royalties and milestones related to the exclusive license to be constrained and therefore excluded such consideration from the transaction price.
As of March 31, 2021, the aggregate amount of the transaction price allocated to the performance obligation that was unsatisfied was $48.8 million, which is expected to be recognized through the term of the Vir Agreement as the services are performed.
5. 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 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 $500.0 million in April 2020 and has an unconditional obligation to pay us an additional $500.0 million on September 30, 2021, which was recorded as a receivable upon execution of the Purchase Agreement.
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 condensed consolidated statement of operations and comprehensive loss and record the proceeds from this transaction as a liability, net of closing costs, on our condensed 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. At execution, our estimate of this total interest expense resulted in an effective annual interest rate of 11%. This estimate contains 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 net sales of inclisiran 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 March 31, 2021, the carrying value of the liability related to the sale of future royalties was $1.10 billion, net of closing costs of $13.0 million. The carrying value of the liability related to the sale of future royalties approximates fair value as
18

ALNYLAM PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
of March 31, 2021 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 of liability related to sale of future royalties as of December 31, 2020
$1,071,541 
Interest expense recognized28,184 
Carrying value of liability related to sale of future royalties as of March 31, 2021
$1,099,725 

6. FAIR VALUE MEASUREMENTS
The following tables present information about our financial assets and liabilities that are measured at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques we utilized to determine such fair value:
(In thousands)As of March 31, 2021Quoted
Prices in
Active
Markets
(Level 1)
Significant
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Financial assets
Cash equivalents:
Money market funds$177,470 $177,470 $ $ 
Marketable debt securities:
U.S. government-sponsored enterprise securities215,200  215,200  
U.S. treasury securities1,057,827  1,057,827  
Marketable equity securities56,967 56,967   
Restricted cash (money market funds)1,483 1,483   
Total financial assets$1,508,947 $235,920 $1,273,027 $ 
Financial liabilities
Development derivative liability (Note 10)$48,038 $ $ $48,038 


(In thousands)As of December 31, 2020Quoted
Prices in
Active
Markets
(Level 1)
Significant
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Financial assets
Cash equivalents:
U.S. treasury securities$20,000 $ $20,000 $ 
Money market funds75,726 75,726   
Marketable debt securities:
U.S. government-sponsored enterprise securities245,214  245,214  
U.S. treasury securities1,087,968  1,087,968  
Marketable equity securities44,633 44,633   
Restricted cash (money market funds)1,483 1,483   
Total financial assets$1,475,024 $121,842 $1,353,182 $ 
Financial liabilities
Development derivative liability (Note 10)$25,585 $ $ $25,585 
The carrying amounts reflected on our condensed 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. The carrying
19

ALNYLAM PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
amount of our debt as of March 31, 2021 approximates fair value as the debt was drawn on December 31, 2020 and has variable interest.
7. MARKETABLE DEBT SECURITIES
We invest our excess cash balances in marketable debt securities and at each balance sheet date presented, we classify 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 did not record any impairment charges related to our marketable debt securities during the three months ended March 31, 2021 or 2020.

The following tables summarize our marketable debt securities:
As of March 31, 2021
(In thousands)Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
U.S. government-sponsored enterprise securities$215,171 $87 $(58)$215,200 
U.S. treasury securities1,057,509 335 (17)1,057,827 
Total$1,272,680 $422 $(75)$1,273,027 

As of December 31, 2020
(In thousands)Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
U.S. government-sponsored enterprise securities$245,113 $135 $(34)$245,214 
U.S. treasury securities1,107,721 328 (81)1,107,968 
Total$1,352,834 $463 $(115)$1,353,182 
The fair values of our marketable debt securities by classification in the condensed consolidated balance sheets were as follows:
(In thousands)As of March 31, 2021As of December 31, 2020
Cash and cash equivalents$ $20,000 
Marketable debt securities1,273,027 1,333,182 
Total$1,273,027 $1,353,182 

8. OTHER BALANCE SHEET DETAILS
Inventory
The components of inventory are summarized as follows:
(In thousands)As of March 31, 2021As of December 31, 2020
Raw materials$53,694 $63,460 
Work in progress23,593 16,149 
Finished goods13,753 12,693 
Total$91,040 $92,302 

As of March 31, 2021 and December 31, 2020, we held $17.1 million of long- term inventory included within other assets in our condensed consolidated balance sheet as we anticipate it being consumed beyond our normal operating cycle.
20

ALNYLAM PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Cash, Cash Equivalents and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within our condensed consolidated balance sheets that sum to the total of these amounts shown in the condensed consolidated statements of cash flows:
As of March 31,
(In thousands)20212020
Cash and cash equivalents$379,543 $467,779 
Total restricted cash included in prepaid expenses, other current assets and long-term other assets2,462 2,614 
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows
$382,005 $470,393 
Accumulated Other Comprehensive (Loss) Income
The following tables summarize the changes in accumulated other comprehensive loss, by component:
(In thousands)Loss on Investment in Joint VentureDefined Benefit Pension
Plans
Unrealized Gains (Losses) from Debt
Securities
Foreign Currency Translation
Adjustment
Total Accumulated Other
Comprehensive Loss
Balance as of December 31, 2020$(32,792)$(3,754)$348 $(7,424)$(43,622)
Other comprehensive (loss) income before reclassifications  (1)6,848 6,847 
Amounts reclassified from other comprehensive income 58   58 
Net other comprehensive income (loss) 58 (1)6,848 6,905 
Balance as of March 31, 2021$(32,792)$(3,696)$347 $(576)$(36,717)

(In thousands)Loss on Investment in Joint VentureDefined Benefit Pension
Plans
Unrealized Gains from Debt
Securities
Foreign Currency Translation
Adjustment
Total Accumulated Other
Comprehensive Loss
Balance as of December 31, 2019$(32,792)$(3,520)$137 $(343)$(36,518)
Other comprehensive income before reclassifications  1,317 340 1,657 
Amounts reclassified from other comprehensive income 74 2,728  2,802 
Net other comprehensive income 74 4,045 340 4,459 
Balance as of March 31, 2020$(32,792)$(3,446)$4,182 $(3)$(32,059)
Amounts reclassified out of accumulated other comprehensive loss relate to settlements of marketable debt securities and amortization of our pension obligation which are recorded as interest income and other income, respectively, in the condensed consolidated statements of operations and comprehensive loss.
9. CREDIT AGREEMENT
In April 2020, we entered into a credit agreement, or Credit Agreement, among us, certain of our subsidiaries (such subsidiaries, together with us, the Loan Parties), funds or accounts managed or advised by GSO Capital Partners LP (now Blackstone Alternative Credit Advisors LP) and certain other affiliates of The Blackstone Group Inc., and the other lenders from time to time parties thereto, collectively, the Lenders, and Wilmington Trust, National Association, as the administrative agent for the Lenders. The Credit Agreement provides for a senior secured delayed draw term loan facility, referred to as the Term Loans, which consists of three tranches providing funding up to $700.0 million. The Tranche 1 Loan of $200.0 million
21

ALNYLAM PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
was drawn as of December 31, 2020 and is included in long-term debt in the condensed consolidated balance sheets. The remaining two tranches will provide funds as follows: