Alnylam Is Now Solidly Profitable. Why Are Investors Treating It Like a Broken Biotech?

It's been a horrible, lousy, rotten year so far for Alnylam Pharmaceuticals (NASDAQ: ALNY) investors. Feel free to add any other similar adjectives you'd like.

Alnylam's share price has plunged more than 40% year to date. Only one other large-cap stock in the entire healthcare sector has performed worse. Alnylam's impressive 69% gain in 2025 has been almost completely erased.

The drugmaker's financials look great. It's now solidly profitable. But investors are clearly treating Alnylam like it's a broken biotech stock.

Just how profitable is Alnylam?

Not long ago, Alnylam was hemorrhaging cash. The company posted net losses throughout 2024. As recently as the second quarter of last year, Alnylam's bottom line reflected a net loss of $16.2 million based on generally accepted accounting principles (GAAP).

However, Alnylam has experienced a dramatic transformation in profitability since then. It recorded impressive earnings of $251 million in the third quarter of 2025. This total was significantly boosted by funds received from its collaboration with Roche (OTC: RHHBY).

But Alnylam remained profitable going forward, relying less on collaboration revenue. Sales skyrocketed for Amvuttra as it gained momentum in the transthyretin amyloid cardiomyopathy (ATTR-CM) market.

In the second quarter of 2026, Alnylam's GAAP net income totaled $164.5 million. Its adjusted earnings were much higher at $251.8 million. Meanwhile, the company's revenue soared 67% year over year to $1.29 billion. As icing on the cake, Alnylam's cash position (including cash, cash equivalents, and marketable securities) stood at $3.3 billion at the end of the quarter.

Why Alnylam is being treated like a broken biotech

If you only looked at Alnylam's financial statements, you'd probably conclude that everything is sunshine and roses for the drugmaker. So why is Alnylam being treated like a broken biotech? There are two main reasons -- and I think each of them is overstated.

First, in Q2, Alnylam cut its 2026 full-year revenue guidance for Amvuttra and Onpattra. Management had projected sales of $4.4 billion to $4.7 billion but lowered the outlook to $4.2 billion to $4.5 billion. CEO Yvonne Greenstreet said that the change was due to demand normalization after an initial spike of previously untreated ATTR-CM patients switching to Amvuttra.

Importantly, Amvuttra's sales continue to grow robustly. However, Alnylam's management team simply underestimated how the initial pent-up demand would turbocharge sales before stabilizing.

The second reason behind Alnylam's sinking share price this year is concern about disappointing Phase 3 results for Wainua (eplontersen) in treating ATTR-CM. Wainua isn't Alnylam's drug, by the way: It's marketed by AstraZeneca (NYSE: AZN) and Ionis Pharmaceuticals (NASDAQ: IONS). However, some investors worried that Wainua's setback in ATTR-CM could lower the chances of success for Alnylam's nucresiran, which is currently in late-stage testing as a treatment for ATTR-CM and hereditary ATTR amyloidosis with polyneuropathy (ATTR-PN).

To be sure, nucresiran might run into similar problems as Wainua. However, the two drugs use different mechanisms. Their clinical trials were designed differently. If Alnylam sees something in the details of the Wainua ATTR-CM study, it could adjust its nucresiran study, if appropriate.

A better story than the stock chart suggests

While many investors view Alnylam as broken, Wall Street doesn't. Of the 23 analysts who have rated the stock over the past three months, 19 recommended buying it. The average 12-month price target for Alnylam reflects a potential upside of 54%. Piper Sandler's (NYSE: PIPR) Edward Tenthodd even thinks the stock could more than double over the next 12 months.

Alnylam remains strong financially. Its products, particularly Amvuttra, continue to generate robust growth. The company's pipeline is promising. All things considered, I think Alnylam has a much better story than its stock chart suggests.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alnylam Pharmaceuticals, AstraZeneca Plc, and Ionis Pharmaceuticals. The Motley Fool recommends Roche Holding AG. The Motley Fool has a disclosure policy.