Will Alnylam's Prospective Obesity Drug Change the World Forever?

Obesity affects millions of Americans, and many more people around the world. It has been linked to various cardiovascular disorders and a wide array of health ailments, shortening lifespans and destroying livelihoods. While scientists have been scrambling to create a drug to fight obesity, none have been a blockbuster success.

Currently, diet and exercise are integral to fat loss, but consumers are continuously looking for an easy way out. If an affordable oral treatment were to enter the market, many analysts are convinced that it would garner billions of dollars in annual revenues.

Alnylam Pharmaceuticals ALNY is a small-cap pharmaceutical that is currently developing a drug that treats cholesterol. It is currently undergoing FDA trials, and has shown over 50% reductions in LDL cholesterol during these trials. Could Alnylam change the world with its cholesterol drug?

Mechanism of Action

Alnylam is not using traditional pharmaceutical methods of treatment. Up until the last few years, medications would simply target a biochemical pathway by using chemicals. Alnylam is one of the first pharmaceutical companies to focus on the human genome rather than chemical processes.

Alnylam is using a technique known as RNA interference, which essentially silences genes. As is the case with sickle cell anemia, which prevented Ryan Clark of the Pittsburgh Steelers from playing in the play-offs, RNA interference could have treated his sickle cell gene.

How Could Alnylam Profit?

Alnylam is currently rooted in the United States, but still has some international outreach. Compared to pharmaceuticals like Pfizer PFE or Merck MRK, Alnylam may not have the outreach or marketing capabilities to fully penetrate the market and realize truly deserved revenues. On the other had, if Alnylam's drug successfully treats obesity, the demand would be so high that hospitals, clinics, and other organizations around the world would make the effort to get their hands on it.

What does this mean for Alnylam?

Alnylam is a small-cap company whose revenues have not exceeded $101 million. If Alnylam had the production capability to cater to all its obesity drug's clients, it would have the opportunity to increase revenues 10-fold. This means that it could greatly reward its employees, ramp up research and development tremendously, and add value to its shareholders immensely.

The Bottom Line:

Alnylam is a purely speculative play at this point. It has been doing well in clinical trials, but many failed drugs did that as well. Furthermore, Alnylam will have to further prove that it will have a significant effect on fat loss along with cholesterol treatment.

If Alnylam achieves FDA approval, it will have to market the drug efficiently, including an affordable price for potential patients. There is a chance for Alnylam to thrust itself into history books, and if its drug succeeds, the global biomedical landscape could be changed forever.

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