ALNYLAM PHARMACEUTICALS, INC. [ALNY] Filings

10-Q 1 alny-20240630.htm 10-Q alny-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________________________

FORM 10-Q

____________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			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 Class

Trading Symbol(s)

Name of Each Exchange on Which Registered

Common Stock, $0.01 par value per share

ALNY

The 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, a 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 filer	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

At July 26, 2024, the registrant had 128,380,513 shares of Common Stock, $0.01 par value per share, outstanding.

ALNYLAM PHARMACEUTICALS, INC.

QUARTERLY REPORT ON FORM 10-Q

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			PAGE NUMBER
PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (Unaudited)

CONDENSED CONSOLIDATED BALANCE SHEETS AS OF J UNE 30 , 2024 AND DECEMBER 31, 2023			5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE AND SIX MONTHS ENDED JUNE 3 0 , 2024 AND 2023			6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT FOR THE THREE AND SIX MONTHS ENDED JUNE 3 0 , 2024 AND 2023			7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 3 0 , 2024 AND 2023			9
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS			10

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			27

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			38

ITEM 4. CONTROLS AND PROCEDURES			38

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS			40

ITEM 1A. RISK FACTORS			40

ITEM 5. OTHER INFORMATION			75

ITEM 6. EXHIBITS			76

SIGNATURES			77

“Alnylam,” ONPATTRO®, AMVUTTRA®, GIVLAARI®, OXLUMO® and IKARIA™ are trademarks and 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.

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of 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 fact 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:

•our views with respect to the potential for approved and investigational RNAi therapeutics, including ONPATTRO, AMVUTTRA, GIVLAARI, OXLUMO, Leqvio® (inclisiran), fitusiran and zilebesiran;

•our plans for additional global regulatory filings and the continuing product launches of ONPATTRO, AMVUTTRA, GIVLAARI, OXLUMO and our collaborator’s plans with respect to Leqvio and fitusiran;

•our ability to obtain regulatory approval of AMVUTTRA (vutrisiran) for the treatment of ATTR amyloidosis with cardiomyopathy;

•our expectations regarding the potential market size for, and the successful commercialization of, ONPATTRO, AMVUTTRA, GIVLAARI, OXLUMO, Leqvio or any future products;

•our ability to obtain and maintain regulatory approvals and pricing and reimbursement for ONPATTRO, AMVUTTRA, GIVLAARI, OXLUMO or any future products, and our collaborators’ ability with respect to Leqvio and fitusiran;

•the progress of our research and development programs, including programs in both rare and prevalent diseases;

•the potential for improved product profiles to emerge from our new technologies, including our IKARIA platform and our ability to expand our product engine to include extrahepatic tissues;

•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, AMVUTTRA, GIVLAARI, OXLUMO or any of our product candidates (or other products or product candidates being developed and commercialized by our collaborators), by our or their contract manufacturers or by us or our collaborators;

•the impact of any future pandemics or public health emergencies on, among other things, our financial performance, business and operations, including manufacturing, supply chain, research and development activities and pipeline programs, and other potential impacts to our business;

•our progress continuing to build and leverage global commercial infrastructure;

•the possible impact of any competing products on the commercial success of ONPATTRO, AMVUTTRA, GIVLAARI, OXLUMO and Leqvio, as well as our product candidates, and, our, or with respect to Leqvio or fitusiran, our collaborators’, 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-tier biotech company by the end of 2025, and our ability to successfully execute on our Alnylam P5x25 strategy;

•our belief that our current cash balance 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 equity and debt securities will support our operations based on our current operating plan;

•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;

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•our ability to obtain, maintain and protect 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, including our patent infringement suits against Pfizer, Inc., BioNTech SE and Moderna, Inc., or of other legal proceedings or government investigations;

•regulatory developments in the United States, or U.S., and foreign countries;

•the impact of laws and regulations;

•developments relating to our competitors and our industry;

•our ability to satisfy our payment obligations, and to service the interest on, or to refinance our indebtedness, including our convertible notes, or to make cash payments in connection with any conversion of our convertible notes, to the extent required; and

•our expectations regarding the effect of the capped call transactions and the anticipated market activities of the option counterparties and/or their respective affiliates.

These forward-looking statements reflect management’s 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. 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. 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 Securities and Exchange Commission, or SEC.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (Unaudited)

ALNYLAM PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts)

(Unaudited)


	June 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	968,492	$	812,688
Marketable debt securities	1,646,268		1,615,516
Marketable equity securities	9,889		11,178
Accounts receivable, net	309,481		327,787
Inventory	83,981		89,146
Prepaid expenses and other current assets	154,745		126,382

Total current assets	3,172,856		2,982,697
Property, plant and equipment, net	517,159		526,057
Operating lease right-of-use assets	198,303		199,732
Restricted investments	49,391		49,391
Other assets	71,925		72,003
Total assets	$	4,009,634	$	3,829,880
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	73,980	$	55,519
Accrued expenses	808,643		713,013
Operating lease liability	41,656		41,510
Deferred revenue	69,009		102,753
Liability related to the sale of future royalties	61,963		54,991
Total current liabilities	1,055,251		967,786
Operating lease liability, net of current portion	239,352		243,101
Deferred revenue, net of current portion	2,402		188,175
Convertible debt	1,022,688		1,020,776
Liability related to the sale of future royalties, net of current portion	1,342,580		1,322,248
Other liabilities	350,428		308,438
Total liabilities	4,012,701		4,050,524
Commitments and contingencies (Note 13)
Stockholders’ deficit:
Preferred stock, $0.01 par value per share, 5,000 shares authorized and no shares issued and outstanding as of June 30, 2024 and December 31, 2023	—		—
Common stock, $0.01 par value per share, 250,000 shares authorized; 128,021 shares issued and outstanding as of June 30, 2024; 125,794 shares issued and outstanding as of December 31, 2023	1,281		1,259
Additional paid-in capital	7,122,704		6,811,063
Accumulated other comprehensive loss	(34,637)		(23,375)
Accumulated deficit	(7,092,415)		(7,009,591)
Total stockholders’ deficit	(3,067)		(220,644)
Total liabilities and stockholders’ deficit	$	4,009,634	$	3,829,880

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

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ALNYLAM PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

(In thousands, except per share amounts)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Statements of Operations
Revenues:
Net product revenues	$	410,088	$	305,705	$	775,251	$	582,033
Net revenues from collaborations	227,338		5,844		345,886		42,306
Royalty revenue	22,399		7,205		33,021		13,705
Total revenues	659,825		318,754		1,154,158		638,044
Operating costs and expenses:
Cost of goods sold	67,271		75,336		121,884		116,768
Cost of collaborations and royalties	1,401		10,034		12,764		23,471
Research and development	294,142		248,526		555,137		479,095
Selling, general and administrative	248,397		214,689		459,194		398,348
Total operating costs and expenses	611,211		548,585		1,148,979		1,017,682
Income (loss) from operations	48,614		(229,831)		5,179		(379,638)
Other (expense) income:
Interest expense	(33,258)		(30,035)		(68,511)		(58,990)
Interest income	29,182		21,075		58,827		39,730
Other expense, net	(55,705)		(35,418)		(70,249)		(47,673)

Total other expense, net	(59,781)		(44,378)		(79,933)		(66,933)
Loss before income taxes	(11,167)		(274,209)		(74,754)		(446,571)
Provision for income taxes	(5,722)		(1,815)		(8,070)		(3,554)
Net loss	$	(16,889)	$	(276,024)	$	(82,824)	$	(450,125)

Net loss per common share - basic and diluted	$	(0.13)	$	(2.21)	$	(0.66)	$	(3.62)


Weighted-average common shares used to compute basic and diluted net loss per common share	126,733		124,659		126,435		124,387


Statements of Comprehensive Loss
Net loss	$	(16,889)	$	(276,024)	$	(82,824)	$	(450,125)
Other comprehensive (loss) income:
Unrealized (loss) gain on marketable securities	(727)		(2,025)		(4,295)		2,100
Foreign currency translation (loss) gain	(6,952)		4,073		(7,030)		5,483
Defined benefit pension plans, net of tax	30		(4)		63		(9)
Total other comprehensive (loss) income	(7,649)		2,044		(11,262)		7,574
Comprehensive loss	$	(24,538)	$	(273,980)	$	(94,086)	$	(442,551)

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

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ALNYLAM PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(In thousands)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Deficit
	Shares	Amount
Balance as of December 31, 2023	125,794	$	1,259	$	6,811,063	$	(23,375)	$	(7,009,591)	$	(220,644)
Exercise of common stock options, net of tax withholdings	223	2		24,763		—		—		24,765
Issuance of common stock under equity plans	446	4		(4)		—		—		—
Stock-based compensation charges	—	—		46,155		—		—		46,155
Other comprehensive loss	—	—		—		(3,613)		—		(3,613)
Net loss	—	—		—		—		(65,935)		(65,935)
Balance as of March 31, 2024	126,463	1,265		6,881,977		(26,988)		(7,075,526)		(219,272)
Exercise of common stock options, net of tax withholdings	1,264	13		140,273		—		—		140,286
Issuance of common stock under equity plans	294	3		10,358		—		—		10,361
Stock-based compensation charges	—	—		90,096		—		—		90,096
Other comprehensive loss	—	—		—		(7,649)		—		(7,649)
Net loss	—	—		—		—		(16,889)		(16,889)
Balance as of June 30, 2024	128,021	$	1,281	$	7,122,704	$	(34,637)	$	(7,092,415)	$	(3,067)

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

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ALNYLAM PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(In thousands)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Deficit
	Shares	Amount
Balance as of December 31, 2022	123,925	$	1,240	$	6,454,540	$	(44,654)	$	(6,569,349)	$	(158,223)
Exercise of common stock options, net of tax withholdings	269	3		26,415		—		—		26,418
Issuance of common stock under equity plans	47	—		—		—		—		—
Stock-based compensation charges	—	—		41,136		—		—		41,136
Other comprehensive income	—	—		—		5,530		—		5,530
Net loss	—	—		—		—		(174,101)		(174,101)
Balance as of March 31, 2023	124,241	1,243		6,522,091		(39,124)		(6,743,450)		(259,240)
Exercise of common stock options, net of tax withholdings	372	4		38,111		—		—		38,115
Issuance of common stock under equity plans	288	3		9,981		—		—		9,984
Stock-based compensation charges	—	—		76,990		—		—		76,990
Other comprehensive income	—	—		—		2,044		—		2,044
Net loss	—	—		—		—		(276,024)		(276,024)
Balance as of June 30, 2023	124,901	$	1,250	$	6,647,173	$	(37,080)	$	(7,019,474)	$	(408,131)

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

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ALNYLAM PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(82,824)	$	(450,125)
Non-cash adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	28,520		27,244
Amortization and interest accretion related to operating leases	21,658		22,282
Non-cash interest expense on liability related to the sale of future royalties	61,103		51,647
Stock-based compensation expense	134,635		115,749
Realized and unrealized loss on marketable equity securities	1,289		867

Change in fair value of development derivative liability	64,228		36,686

Other	(15,365)		(8,252)
Changes in operating assets and liabilities:
Accounts receivable, net	10,050		16,183
Inventory	6,816		1,582
Prepaid expenses and other assets	(13,775)		(29,109)
Accounts payable, accrued expenses and other liabilities	69,605		766
Operating lease liability	(23,791)		(23,847)
Deferred revenue	(219,506)		12,866
Net cash provided by (used in) operating activities	42,643		(225,461)
Cash flows from investing activities:
Purchases of property, plant and equipment	(20,991)		(29,810)
Purchases of marketable securities	(717,826)		(812,887)
Sales and maturities of marketable securities	705,137		757,767
Proceeds from maturity of restricted investments	57,875		58,475
Purchases of restricted investments	(57,875)		(58,475)

Net cash used in investing activities	(33,680)		(84,930)
Cash flows from financing activities:
Proceeds from exercise of stock options and other types of equity, net	158,637		91,765

Proceeds from development derivative, net	1,770		8,000


Net cash provided by financing activities	160,407		99,765
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(13,061)		2,046
Net increase (decrease) in cash, cash equivalents and restricted cash	156,309		(208,580)
Cash, cash equivalents and restricted cash, beginning of period	814,884		868,556
Cash, cash equivalents and restricted cash, end of period	$	971,193	$	659,976
Supplemental disclosure of cash flows:
Cash paid for interest	$	39,101	$	17,128

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

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ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. NATURE OF BUSINESS

Alnylam Pharmaceuticals, Inc. (also referred to as Alnylam, the Company, we, our or us) commenced operations on June 14, 2002 as a biopharmaceutical company seeking to develop and commercialize novel therapeutics based on ribonucleic acid interference, or RNAi. We are committed to the advancement of our company strategy of building a multi-product, global, commercial biopharmaceutical company with a deep and sustainable clinical pipeline of RNAi therapeutics for future growth and a robust, organic research engine for sustainable innovation and great potential for patient impact. Since inception, we have focused on discovering, developing and commercializing RNAi therapeutics by establishing and maintaining a strong intellectual property position in the RNAi field, establishing strategic collaborations with leading pharmaceutical and life sciences companies, generating revenues through licensing agreements, and ultimately developing and commercializing RNAi therapeutics globally, either independently or with our strategic collaborators. We have devoted substantially all of our efforts to business planning, research, development, manufacturing and commercial efforts, acquiring, filing and expanding intellectual property rights, recruiting management and technical staff, and raising capital.

In early 2021, we launched our Alnylam P5x25 strategy, which focuses on our planned transition to a top-tier biotech company 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, while delivering exceptional financial performance.

As of June 30, 2024, we have five marketed products, including one product commercialized by a collaborator, and multiple late-stage investigational programs advancing towards potential commercialization. We currently generate worldwide product revenues from four commercialized products, ONPATTRO, AMVUTTRA, GIVLAARI and OXLUMO, primarily in the United States, or U.S., and Europe.

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, 2023, which were included in our Annual Report on Form 10-K that was filed with the Securities and Exchange Commission on February 15, 2024. 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, 2023. There have been no material changes to our significant accounting policies during the six-month period ended June 30, 2024.

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 as of 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, deferred tax asset valuation allowances, 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. Changes in estimates are reflected in reported results in the period in which they become known.

Liquidity

Based on our current operating plan, we believe that our cash, cash equivalents and marketable securities as of June 30, 2024, will be sufficient to satisfy our working capital and operating needs for at least the next 12 months from the filing date of this Quarterly Report on Form 10-Q.

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ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update 2023-09, Improvements to Income Tax Disclosures, which requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction. The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively. The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. We are currently evaluating the disclosure requirements related to this new standard.

In November 2023, the FASB issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through additional disclosures about significant segment expenses. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating the disclosure requirements related to this new standard.

3. NET PRODUCT REVENUES

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


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
ONPATTRO
United States	$	22,112	$	25,560	$	38,651	$	55,377
Europe	37,074		56,393		81,764		116,071
Rest of World	18,058		9,505		26,046		22,503
Total	77,244		91,458		146,461		193,951

AMVUTTRA
United States	148,463		96,469		278,701		175,482
Europe	56,760		14,405		100,493		21,173
Rest of World	24,886		21,262		46,156		37,249
Total	230,109		132,136		425,350		233,904

GIVLAARI
United States	41,225		35,196		79,956		65,487
Europe	16,314		14,051		31,629		28,522
Rest of World	4,588		8,652		8,598		11,796
Total	62,127		57,899		120,183		105,805

OXLUMO
United States	15,744		8,794		29,076		17,851
Europe	20,503		12,216		41,930		25,525
Rest of World	4,361		3,202		12,251		4,997
Total	40,608		24,212		83,257		48,373

Total net product revenues	$	410,088	$	305,705	$	775,251	$	582,033

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The following table presents the balance of our receivables related to our net product revenues:


(In thousands)	As of June 30, 2024		As of December 31, 2023
Receivables included in “Accounts receivable, net”	$	248,654	$	210,097

4. NET REVENUES FROM COLLABORATIONS

Net revenues from collaborations consist of the following:


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2024		2023		2024		2023
Roche	$	16,506	$	—	$	91,186	$	—
Regeneron Pharmaceuticals	207,429		(2,837)		234,193		17,153
Novartis AG	2,304		8,627		16,820		23,560
Other	1,099		54		3,687		1,593
Total	$	227,338	$	5,844	$	345,886	$	42,306

The following table presents the balance of our receivables and contract liabilities related to our collaboration agreements:


(In thousands)	As of June 30, 2024		As of December 31, 2023
Receivables included in “Accounts receivable, net”	$	39,497	$	99,576

Contract liabilities included in “Deferred revenue”	$	71,176	$	290,763

We recognized revenue of $200.0 million and $228.7 million in the three and six months ended June 30, 2024, respectively, and revenue of $4.8 million and $10.3 million in the three and six months ended June 30, 2023, respectively, that was included in the contract liability balance at the beginning of the applicable period.

To determine revenue recognized in the period from contract liabilities, we first allocate revenue to the individual contract liability balance outstanding at the beginning of the period until the revenue exceeds that balance. If additional consideration is received on those contracts in subsequent periods, we assume all revenue recognized in the reporting period first applies to the beginning contract liability as opposed to a portion applying to the new consideration for the period.

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


	Three Months Ended June 30,
	2024						2023
(In thousands)	Clinical and Manufacturing		External Services		Other		Clinical and Manufacturing		External Services		Other
Roche	$	22,503	$	2,499	$	1,234	$	—	$	—	$	—
Regeneron Pharmaceuticals	6,006		3,492		4,786		9,956		910		9,330
Other	1,485		89		242		85		58		405
Total	$	29,994	$	6,080	$	6,262	$	10,041	$	968	$	9,735

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	Six Months Ended June 30,
	2024						2023
(In thousands)	Clinical and Manufacturing		External Services		Other		Clinical and Manufacturing		External Services		Other
Roche	$	36,638	$	6,111	$	1,568	$	—	$	—	$	—
Regeneron Pharmaceuticals	16,795		7,233		8,959		18,472		2,150		18,693
Other	3,591		89		949		397		184		765
Total	$	57,024	$	13,433	$	11,476	$	18,869	$	2,334	$	19,458

The research and development expenses incurred for the agreements included in the table above consist of costs incurred for (i) clinical and preclinical expenses, including manufacturing of clinical and preclinical product, (ii) external services, including consulting services and lab supplies and services, and (iii) other expenses, including professional services, facilities and overhead allocations, and a reasonable estimate of compensation and related costs as billed to our counterparties, for which we recognize net revenues from collaborations. For the three and six months ended June 30, 2024 and 2023, we did not incur material selling, general and administrative expenses related to our collaboration agreements.

Product Collaborations

Roche

On July 21, 2023, or the Effective Date, we entered into a Collaboration and License Agreement, or the Roche Agreement, with F. Hoffmann-La Roche Ltd. and Genentech, Inc., or, collectively, Roche, pursuant to which we and Roche established a worldwide, strategic collaboration for the joint development of zilebesiran. Zilebesiran is our investigational small interfering RNA, or siRNA, therapeutic targeting liver-expressed angiotensinogen, which is currently in Phase 2 clinical development for the treatment of hypertension.

Under the Roche Agreement, we granted to Roche (i) co-exclusive rights to develop zilebesiran worldwide and commercialize zilebesiran in the U.S., referred to as the Co-Commercialization Territory, (ii) exclusive rights to commercialize zilebesiran outside of the U.S., referred to as the Roche Territory, and (iii) non-exclusive rights to manufacture zilebesiran for the development and commercialization of zilebesiran in the Roche Territory. In connection with the Roche Agreement, Roche made an upfront, non-refundable payment to us of $310.0 million.

We lead the global clinical development for zilebesiran. We are responsible for forty percent (40%) and Roche is responsible for the remaining sixty percent (60%) of development costs incurred in the conduct of development activities that support regulatory approval of zilebesiran globally. We and Roche share equally (50/50) all costs incurred in connection with development activities that are conducted to support regulatory approval of zilebesiran solely in the Co-Commercialization Territory if incremental development activities are needed. Roche is solely responsible for all costs incurred in the conduct of development activities that are conducted primarily to support regulatory approval in the Roche Territory. Upon regulatory approval, Roche has the exclusive right to commercialize zilebesiran in the Roche Territory and will pay us tiered, low double-digit royalties based on net sales of zilebesiran on a country-by-country basis during the applicable royalty term. We and Roche will co-commercialize zilebesiran in the Co-Commercialization Territory and share equally (50/50) profits and losses (including commercialization costs).

Roche has the right to terminate the Roche Agreement for any or no reason at all upon prior written notice, however, if the termination notice occurs after the achievement of the first development milestone and before the achievement of the third development milestone, Roche is required to pay us a termination fee of $50.0 million. In addition, either party may terminate the Roche Agreement for a material breach by, or insolvency of, the other party, subject to a cure period. Unless earlier terminated pursuant to its terms, the Roche Agreement will remain in effect until expiration on a country-by-country basis (a) in the Roche Territory, upon expiration of the applicable royalty term in the applicable country and (b) in the Co-Commercialization Territory, upon expiration of the term of the co-commercialization efforts.

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

As of the Effective Date, we identified the following promises in the Roche Agreement that were evaluated under the scope of ASC 606: delivery of (i) a co-exclusive license to develop zilebesiran worldwide and commercialize zilebesiran within the Co-Commercialization Territory, a non-exclusive license to manufacture zilebesiran in the Roche Territory solely for purposes of developing and commercializing zilebesiran in the Roche Territory, and an exclusive license to commercialize zilebesiran in the Roche Territory, collectively referred to as Roche License Obligation, (ii) development services, including the manufacture

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of clinical supply, that support regulatory approval of zilebesiran, referred to as the Roche Development Services Obligation, and (iii) technology transfer of the existing manufacturing process for zilebesiran, referred to as the Roche Technology Transfer Obligation. The three performance obligations under the Roche Agreement are collectively referred to as the Roche Performance Obligations.

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

We assessed the above promises and determined that the Roche License Obligation, Roche Development Services Obligation and Roche Technology Transfer Obligation were reflective of a vendor-customer relationship and therefore represented performance obligations within the scope of ASC 606. The Roche License Obligation was considered functional intellectual property and distinct from other promises under the contract as Roche can benefit from the licenses on its own or together with other readily available resources. As the licenses were delivered at the same time, they were considered one performance obligation at contract inception. The Roche Development Services Obligation was considered distinct as Roche could benefit from the development services together with the licenses transferred by us at the inception of the agreement. The development services are not expected to significantly modify or customize the initial intellectual property as zilebesiran was in Phase 2 clinical development at contract inception. The Roche Technology Transfer Obligation was distinct as Roche can benefit from the manufacturing license transferred by us at the inception of the agreement given the advancements of our RNAi platform and our utilization of third-party contract manufacturing organizations to manufacture zilebesiran. Therefore, each represents a separate performance obligation within the contract with a customer under the scope of ASC 606 at contract inception.

We consider the collaborative activities associated with the co-commercialization of zilebesiran in the U.S. to be a separate unit of account within the scope of ASC 808 as we and Roche are both active participants in the commercialization activities and are exposed to significant risks and rewards that are dependent on the commercial success of the activities in the arrangement.

We determined the transaction price under ASC 606 at the inception of the Roche Agreement was $857.0 million, consisting of the $310.0 million upfront payment and $547.0 million additional variable consideration attributed to cost reimbursement from development and manufacturing services and technology transfer related to the Roche Performance Obligations. We determined that any variable consideration related to development and regulatory milestones was deemed to be fully constrained at inception and therefore excluded from the initial transaction price due to the high degree of uncertainty and risk associated with these potential payments as we determined that we could not assert that it was probable that a significant reversal in the amount of cumulative revenue recognized would not occur. We also determined that royalties and sales milestones relate solely to the licenses of intellectual property and were therefore excluded from the transaction price under the sales- or usage-based royalty exception of ASC 606.

We developed the estimated standalone selling price at inception for each of the Roche Performance Obligations with the objective of determining the price at which we would sell such an item if it were to be sold regularly on a standalone basis. We developed the estimated standalone selling price for the Roche License Obligation primarily based on the probability-weighted present value of expected future cash flows associated with each underlying license or activity. In developing such estimates, we applied judgment in determining the forecasted revenues, taking into consideration the applicable market conditions and relevant entity-specific factors, the probability of success, the time needed to develop zilebesiran and the discount rate. We developed the estimated standalone selling price for the services and clinical supply included in the Roche Development Services Obligation and the Roche Technology Transfer Obligation primarily based on the level of efforts necessary to perform the service and the costs for full-time equivalent employees and expected resources to be committed plus a reasonable margin.

We allocated the variable consideration related to the estimated reimbursements for the Roche Development Services Obligation and the Roche Technology Transfer Obligation to each performance obligation as the terms of the variable payment relate specifically to our efforts to satisfy the performance obligation and allocating the variable amount of consideration entirely to the respective performance obligation is consistent with the allocation objective of ASC 606 when considering all of the performance obligations and payment terms in the contract. We allocated the fixed upfront consideration of $310.0 million entirely to the Roche License Obligation as the value of the fixed consideration together with the expected value of the remaining development and regulatory milestones, sales-based milestones, and royalties, all of which are either currently constrained at inception or subject to the sales- or usage-based royalty exception, approximates the standalone selling price of the Roche License Obligation. Therefore, allocating the fixed upfront consideration entirely to the Roche License Obligation is consistent with the allocation objective of ASC 606 when considering all of the performance obligations and payment terms in the contract.

The Roche License Obligation was satisfied at a point in time upon transfer of the license to Roche. Control of the licenses was transferred on the Effective Date and Roche could begin to use and benefit from the licenses. For the Roche Development

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Services Obligation, we measure proportional performance over time using an input method based on cost incurred relative to the total estimated cost of the 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 transaction price allocated to the obligation. Management has applied significant judgment in the process of developing our estimates. We re-evaluate the transaction price as of the end of each reporting period.

As of June 30, 2024, the total transaction price was determined to be $922.0 million, an increase of $65.0 million from December 31, 2023. The increase is due to the achievement of the development milestone for the first patient dosed in the KARDIA-3 Phase 2 study.

The following tables provide a summary of the transaction price allocated to each performance obligation, in addition to revenue activity during the period, in thousands:


			Revenue Recognized During
	Transaction Price Allocated		Three Months Ended June 30,				Six Months Ended June 30,
Performance Obligations	As of June 30, 2024		2024		2023		2024		2023
Roche License Obligation	$	375,000	$	—	$	—	$	65,000	$	—
Roche Development Services Obligation	545,000		12,797		—		19,948		—
Roche Technology Transfer Obligation	2,000		—		—		—		—
	$	922,000	$	12,797	$	—	$	84,948	$	—

As of June 30, 2024, the aggregate amount of the transaction price allocated to the Roche Performance Obligations that was unsatisfied was $503.1 million, which is expected to be recognized through the term of the Roche Agreement as the services are performed.

Regeneron Pharmaceuticals, Inc.

Overview

In 2019, we entered into a global, strategic collaboration with Regeneron to discover, develop and commercialize RNAi therapeutics for a broad range of diseases by addressing therapeutic targets expressed in the eye and central nervous system, or CNS, in addition to a select number of targets expressed in the liver, which we refer to as the Regeneron Collaboration. The Regeneron Collaboration is governed by a Master Agreement, referred to as the Regeneron Master Agreement. In connection with the Regeneron Master Agreement, we and Regeneron entered into (i) a co-co collaboration agreement covering the continued development of cemdisiran, our C5 siRNA, currently in development for C5 complement-mediated diseases, as a monotherapy, or the C5 Co-Co Collaboration Agreement, and (ii) a license agreement to evaluate anti-C5 antibody-siRNA combinations for C5 complement-mediated diseases including evaluating the combination of Regeneron’s pozelimab and cemdisiran, or the C5 License Agreement. The Master Agreement, the C5 Co-Co Collaboration Agreement and the C5 License Agreement were accounted for as a single arrangement because the agreements were negotiated together.

In November 2022, Regeneron exercised its right under the C5 Co-Co Collaboration Agreement to opt-out of the further development and commercialization of cemdisiran monotherapy. As a result of Regeneron’s decision to opt-out, the licenses granted to Regeneron under the C5 Co-Co Collaboration Agreement reverted to us, we had the sole right to continue to develop and commercialize cemdisiran monotherapy, and Regeneron no longer shared in the costs on any monotherapy program. Regeneron remained eligible to receive tiered, double-digit royalties on net sales of cemdisiran as a monotherapy.

In June 2024, we entered into an amended and restated C5 License Agreement, or the Amended C5 License Agreement, which terminated the C5 Co-Co Collaboration Agreement and granted Regeneron a worldwide license to cemdisiran as a monotherapy in addition to the license to cemdisiran in combination with anti-C5 antibodies. Through the Amended C5 License Agreement, Regeneron is now solely responsible for development, manufacturing and commercialization of cemdisiran as a monotherapy and in combination with anti-C5 antibodies. As part of the Amended C5 License Agreement, we will provide manufacturing technology transfer services for cemdisiran to Regeneron. Regeneron provided us with an upfront payment of $10.0 million and we will receive certain milestone payments upon receipt of regulatory approval for cemdisiran as a monotherapy, and tiered double-digit royalties on net sales. The Amended C5 License Agreement did not change our rights to receive low double-digit royalties and commercial milestones of up to $325.0 million on any potential product sales if cemdisiran is used as part of a combination product.

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

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Period, and together with the Initial Research Term, the Research Term) for up to an additional five years, for a research term extension fee of $300.0 million. The Regeneron Collaboration also covers a select number of RNAi therapeutic programs designed to target genes expressed in the liver.

Regeneron leads development and commercialization for all programs targeting eye diseases (subject to limited exceptions), entitling us to certain potential milestone and royalty payments pursuant to the terms of a license agreement, the form of which has been agreed upon by the parties. We and Regeneron are alternating leadership on CNS and liver programs, with the lead party retaining global development and commercial responsibility. For such CNS and liver programs, both we and Regeneron have the option at lead candidate selection to enter into a co-co collaboration agreement, the form of which has been agreed upon by the parties, whereby both companies will share equally all costs of, and profits from, all development and commercialization activities under the program. If the non-lead party elects to not enter into a co-co collaboration agreement with respect to a given CNS or liver program, we and Regeneron will enter into a license agreement with respect to such program and the lead party will be the “Licensee” for the purposes of the license agreement. If the lead party for a CNS or liver program elects to not enter into the co-co collaboration agreement, then we and Regeneron will enter into a license agreement with respect to such program and leadership of the program will transfer to the other party and the former non-lead party will be the “Licensee” for the purposes of the license agreement.

In connection with the Regeneron Master Agreement, we remain eligible to receive an additional $100.0 million in milestone payments upon achievement of certain criteria during early clinical development for an eye program. In addition, we and Regeneron are continuing to advance programs nominated during the Initial Research Term, and Regeneron has the right to nominate up to six additional targets per year during this period. For each of these programs, Regeneron will provide us with $2.5 million in funding at program initiation and an additional $2.5 million at lead candidate identification. If Regeneron exercises the option to extend the research term, Regeneron will retain the right to nominate up to six additional targets per year, and we will remain eligible to achieve $2.5 million in funding at each program initiation and an additional $2.5 million at each lead candidate identification during the Research Term Extension Period.

For any license agreement subsequently entered into, the licensee will generally be responsible for its own costs and expenses incurred in connection with the development and commercialization of the collaboration products. The licensee will pay to the licensor certain development and/or commercialization milestone payments totaling up to $150.0 million for each collaboration product. In addition, following the first commercial sale of the applicable collaboration product under a license agreement, the licensee is required to make certain tiered royalty payments, ranging from low double-digits up to 20%, to the licensor based on the aggregate annual 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.

Contract Modification

We determined the Amended C5 License Agreement does not meet the requirements to account for the contract modification as a separate contract under ASC 606 because the consideration exchanged for the additional distinct goods and services does not reflect the standalone selling price. Therefore, we have accounted for the Amended C5 License Agreement and Regeneron Master Agreement as a single combined contract. The modification date was determined to be the June 2024 effective date of the Amended C5 License Agreement.

Our performance obligations subsequent to the contract modification include: (i) a research license and research services, collectively referred to as the Research Services Obligation; (ii) a worldwide license to cemdisiran for combination therapies, and manufacturing and development service obligations, collectively referred to as the C5 License Obligation; (iii) a worldwide license to cemdisiran for monotherapies, referred to as the C5 Monotherapy Obligation, and (iv) a technology transfer of the existing manufacturing process for cemdisiran, referred to as the Regeneron Technology Transfer Obligation.

The Amended C5 License Agreement did not change the Research Services Obligation or the C5 License Obligation which were both performance obligations at the inception of our global, strategic collaboration with Regeneron prior to the contract modification. The Amended C5 License Agreement resulted in two additional performance obligations which are the C5 Monotherapy Obligation and the Regeneron Technology Transfer Obligation. The C5 Monotherapy Obligation is considered

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functional intellectual property and distinct from other promises as Regeneron can benefit from the cemdisiran monotherapy license on its own or together with other readily available resources and the license is separately identifiable from the other promises in the contract. The Regeneron Technology Transfer Obligation is distinct as Regeneron can benefit from the cemdisiran monotherapy license transferred by us without the technology transfer given cemdisiran is in an advanced stage of clinical development and our utilization of third-party contract manufacturing organizations to manufacture cemdisiran. Therefore, the C5 Monotherapy Obligation and the Regeneron Technology Transfer Obligation each represent a separate performance obligation.

As of the modification date, we established a new transaction price of $329.7 million which represents the remaining deferred revenue as of the modification date of $260.3 million, variable consideration of $59.4 million which relates to estimated reimbursements and milestones for the Research Services Obligation, C5 License Obligation and Regeneron Technology Transfer Obligation and the $10.0 million upfront payment related to the Amended C5 License Agreement. We allocated the $59.4 million of variable consideration to the respective performance obligation as the terms of the variable payments relate specifically to our efforts to satisfy the performance obligations and allocating the variable amount of consideration entirely to the respective performance obligations is consistent with the allocation objective of ASC 606 when considering all of the performance obligations and payment terms in the contract.

We determined that any variable consideration related to regulatory milestones were deemed to be fully constrained and therefore excluded from the transaction price due to the high degree of uncertainty and risk associated with these potential payments and we determined that we could not assert that it was probable that a significant reversal in the amount of cumulative revenue recognized would not occur. We determined that royalties and sales-based milestones relate solely to the license of intellectual property and were therefore excluded from the transaction price under the sales-or usage-based royalty exception of ASC 606.

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


Performance Obligations	Standalone Selling Price		Fixed Consideration		Variable Consideration Allocated		Total Transaction Price
Research Services Obligation	$	78,820	$	45,469	$	30,000	$	75,469
C5 License Obligation	$	53,745	31,004		25,386		56,390
C5 Monotherapy Obligation	$	332,000	191,520		—		191,520
Regeneron Technology Transfer Obligation	$	4,000	2,307		4,000		6,307
			$	270,300	$	59,386	$	329,686

The fixed consideration was allocated to the obligations based on the relative estimated standalone selling prices of each obligation, over which management has applied significant judgment. We developed the estimated standalone selling prices for the remaining Research Services Obligation, the remaining C5 License Obligation and the new Regeneron Technology Transfer Obligation primarily based on the level of efforts necessary to perform the services and the costs for full-time equivalent employees and expected resources to be committed plus a reasonable margin. We developed the estimated standalone selling price for the cemdisiran monotherapy license granted under the C5 Monotherapy Obligation using the adjusted market assessment approach based on a discounted cash flow model that establishes the forecasted earnings during the commercial period for cemdisiran as a monotherapy adjusted for probability of success.

The transaction price of $191.5 million allocated to the C5 Monotherapy Obligation performance obligation was recognized immediately as this obligation was satisfied at a point in time upon transfer of the license to Regeneron. Control of the license was transferred in June 2024 and Regeneron could begin to use and benefit from the license.

A cumulative catch-up adjustment was recognized for the remaining Research Services and the remaining C5 License Obligation as of the contract modification date to reflect the measure of progress and transaction price following the modification. The cumulative catch-up adjustment for the remaining Research Services and the remaining C5 License Obligation was not significant.

For the Research Services Obligation, the C5 License Obligation, and the Regeneron Technology Transfer Obligation, we measure proportional performance over time using an input method based on cost incurred relative to the total estimated costs for each of the identified obligations by determining the proportion of effort incurred as a percentage of total effort we expect to expend. This ratio is applied to the transaction price allocated to each obligation. 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. The transaction price remaining related to our unsatisfied performance obligations as of June 30, 2024 increased $31.6 million from the contract

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modification date primarily related to our Research Services Obligation. After the contract modification date, the estimated timing of our underlying research activities to complete our obligations, and the resulting milestones we expect to achieve, changed. Revenue recognized under this agreement is accounted for as collaboration revenue.

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


	Transaction Price Allocated		Deferred Revenue
Performance Obligations	As of June 30, 2024		As of June 30, 2024		As of December 31, 2023
Research Services Obligation	$	102,969	$	41,469	$	63,400
C5 License Obligation	60,484		27,400		27,500
Regeneron Technology Transfer Obligation	6,307		2,307		—
	$	169,760	$	71,176	$	90,900


	Revenue Recognized During
	Three Months Ended June 30,				Six Months Ended June 30,
Performance Obligations	2024		2023		2024		2023
Research Services Obligation	$	4,000	$	(17,000)	$	18,700	$	(6,300)
C5 License Obligation	8,800		3,100		10,500		5,300

	$	12,800	$	(13,900)	$	29,200	$	(1,000)

As of June 30, 2024, the aggregate amount of the transaction price allocated to the remaining Research Services Obligation, C5 License Obligation, and Regeneron Technology Transfer Obligation that was unsatisfied was $152.2 million, which is expected to be recognized through the term of the Regeneron Collaboration as the services are performed. Deferred revenue related to the Regeneron Collaboration is classified as either current or non-current in the condensed consolidated balance sheets based on the period the revenue is expected to be recognized.

Novartis AG

2013 Collaboration with The Medicines Company

In February 2013, we and The Medicines Company, or MDCO, entered into a license and collaboration agreement pursuant to which we granted to MDCO an exclusive, worldwide license to develop, manufacture and commercialize RNAi therapeutics targeting proprotein convertase subtilisin/kexin type 9 for the treatment of hypercholesterolemia and other human diseases, including inclisiran. We refer to this agreement, as amended through the date hereof, as the MDCO License Agreement. In 2020, Novartis AG, or Novartis, completed its acquisition of MDCO and assumed all of MDCO’s rights and obligations under the MDCO License Agreement.

As of June 30, 2024, we have earned $120.0 million of milestones and we could be entitled to receive an additional $60.0 million commercialization milestone. In addition, we are entitled to royalties ranging from 10% up to 20% based on annual worldwide net sales of licensed products by Novartis, its affiliates and sublicensees, subject to reduction under specified circumstances.

Other

In addition to the collaboration agreements discussed above, we have various other collaboration agreements that are not individually significant to our operating results or financial condition at this time. Pursuant to the terms of those agreements, we may be required to pay, or we may receive, additional amounts contingent upon the occurrence of various future events (e.g., upon the achievement of various development and commercial milestones) which in the aggregate could be significant. We may also incur, or be reimbursed for, significant research and development costs. In addition, if any products related to these collaborations are approved for sale, we may be required to pay, or we may receive, royalties on future sales. The payment or receipt of these amounts, however, is contingent upon the occurrence of various future events. Due to the uncertainty of pharmaceutical development and the high historical failure rates generally associated with drug development and commercialization, it is possible we may not receive any such payments under all of our existing collaboration and license agreements, including the agreements described within this note.

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5. 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 June 30, 2024		Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets
Cash equivalents:
Money market funds	$	158,467	$	158,467	$	—	$	—
U.S. treasury securities	36,315		—		36,315		—
Commercial paper	6,300		—		6,300		—

Marketable debt securities:
U.S. treasury securities	882,671		—		882,671		—
U.S. government-sponsored enterprise securities	383,501		—		383,501		—
Corporate notes	305,003		—		305,003		—
Commercial paper	70,079		—		70,079		—

Municipal securities	5,014		—		5,014		—
Marketable equity securities	9,889		9,889		—		—
Restricted cash (money market funds)	1,217		1,217		—		—
Total financial assets	$	1,858,456	$	169,573	$	1,688,883	$	—
Financial liabilities
Development derivative liability	$	390,939	$	—	$	—	$	390,939


(In thousands)	As of December 31, 2023		Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets
Cash equivalents:
Money market funds	$	166,059	$	166,059	$	—	$	—
U.S. treasury securities	30,712		—		30,712		—

Commercial paper	2,685		—		2,685		—

Corporate notes	762		—		762		—
Marketable debt securities:
U.S. treasury securities	862,022		—		862,022		—
U.S. government-sponsored enterprise securities	441,341		—		441,341		—
Corporate notes	252,350		—		252,350		—
Commercial paper	56,216		—		56,216		—
Certificates of deposit	3,587		—		3,587		—

Marketable equity securities	11,178		11,178		—		—
Restricted cash (money market funds)	1,210		1,210		—		—
Total financial assets	$	1,828,122	$	178,447	$	1,649,675	$	—
Financial liabilities
Development derivative liability	$	324,941	$	—	$	—	$	324,941

For the six months ended June 30, 2024 and 2023, there were no transfers into or out of Level 3 financial assets or liabilities. 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.

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ALNYLAM PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

6. 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 and six months ended June 30, 2024 or 2023.

The following tables summarize our marketable debt securities:


	As of June 30, 2024
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. treasury securities	$	920,578	$	79	$	(1,671)	$	918,986
U.S. government-sponsored enterprise securities	384,165		63		(727)		383,501
Corporate notes	305,491		39		(527)		305,003
Commercial paper	76,379		—		—		76,379

Municipal securities	5,017		—		(3)		5,014
Total	$	1,691,630	$	181	$	(2,928)	$	1,688,883


	As of December 31, 2023
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. treasury securities	$	892,237	$	1,085	$	(588)	$	892,734
U.S. government-sponsored enterprise securities	440,915		1,000		(574)		441,341
Corporate notes	252,487		945		(320)		253,112
Commercial paper	58,901		—		—		58,901
Certificates of deposit	3,587		—		—		3,587

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

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


(In thousands)	As of June 30, 2024		As of December 31, 2023
Marketable debt securities	$	1,646,268	$	1,615,516
Cash and cash equivalents	42,615		34,159
Total	$	1,688,883	$	1,649,675

7. OTHER BALANCE SHEET DETAILS

Inventory

The components of inventory are summarized as follows:


(In thousands)	As of June 30, 2024		As of December 31, 2023
Raw materials	$	26,021	$	23,346
Work in process	66,535		76,963
Finished goods	27,855		25,123
Total inventory	$	120,411	$	125,432

As of June 30, 2024 and December 31, 2023, we had $36.4 million and $36.3 million of long-term inventory, respectively, included within other assets in our condensed consolidated balance sheets as we anticipate it being consumed beyond our normal operating cycle.

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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 June 30,
(In thousands)	2024		2023
Cash and cash equivalents	$	968,492	$	657,800
Total restricted cash included in other assets	2,701		2,176
Total cash, cash equivalents, and restricted cash shown in the condensed consolidated statements of cash flows	$	971,193	$	659,976

Accumulated Other Comprehensive (Loss) Income

The following tables summarize the changes in accumulated other comprehensive (loss) income, by component:


(In thousands)	Loss on Investment in Joint Venture		Defined Benefit Pension Plans		Unrealized (Losses) Gains from Debt Securities		Foreign Currency Translation Adjustment		Total Accumulated Other Comprehensive Loss
Balance as of December 31, 2023	$	(32,792)	$	(2,753)	$	1,548	$	10,622	$	(23,375)
Other comprehensive loss before reclassifications	—		—		(4)		(7,030)		(7,034)
Amounts reclassified from other comprehensive loss	—		63		(4,291)