Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) is a biotechnology company built on RNA interference, a technique that switches off the genes behind certain diseases. At about $31 billion, the stock features on our list of 9 New Contenders for the S&P 500 Index. It stands out as a rare large biotech that has turned sustainably profitable under standard accounting rules, clearing the exact hurdle that keeps most drugmakers out of the index until their products scale. Because it is profitable, Alnylam carries a trailing price-to-earnings ratio near 44 times, with a forward multiple lower at 20, as earnings grow into the valuation. Revenue over the past year is roughly $4.3 billion. The multiple is rich, but for a drugmaker just reaching profitability with a fast-growing franchise, it is a profile the committee can act on.
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Bull Case
The bull case is the ramp of its franchise, led by its drug AMVUTTRA. Second-quarter revenue jumped about 74% to $1.2 billion as the drug set a record. Its expansion into a common heart condition called ATTR cardiomyopathy is the main growth engine, opening a far larger market than its original rare-disease use. Behind it, Alnylam has built a pipeline of other RNA-based treatments that gives the profit a boost over time. For an index committee that has added few healthcare names lately, a fast-growing biotech is an appealing way to rebalance the sector mix.
Bear Case
The bear case is that the stock has already round-tripped, falling from a high near $495 to about $233 on questions about competition and how durable the growth will prove. Management also trimmed full-year product revenue guidance to a range of $4.7 billion to $5.1 billion due to the normalization of second-line demand for its AMVUTTRA therapy after an unusually strong early launch phase. Biotech earnings can be lumpy from quarter to quarter, and at roughly 44 times trailing earnings, the stock price depends on continued strong execution. A single soft quarter could dent both the young reported profit and the premium multiple at the same time.
In the past six months, the stock slid by -25.5% while the Insider Monkey Billionaire Index gained 11.6% over the same period.
Bottom line
The bottom line is that Alnylam is a rare profitable large-cap biotech. The healthcare sector’s thin representation among recent additions may help its case rather than hurt it. The question that raises concern is whether the earnings it has just achieved prove steady enough to keep clearing the profit test quarter after quarter. The call is yours, but it should consider two things: room for growth after the pullback, and AMVUTTRA’s compounding potential against new competition.
Market Sentiment
On positioning, Insider Monkey’s database shows a strong vote of confidence for Alnylam Pharmaceuticals, Inc., with ownership rising to 64 hedge funds at the end of the second quarter of 2026, up from 54 the quarter before, reflecting an increase in institutional interest. Funds are adding to ALNY, but not every biotech moat is equal.
To review the full group profiled in 9 New Contenders for the S&P 500 Index, click HERE.
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This article is originally published at Insider Monkey.
