When the industry lost faith in RNAi, Alnylam launched "Alnylam 5x15," a public five-year goal to advance five drugs into the clinic. While it took years to register externally, this bold commitment immediately became a powerful internal rallying cry, injecting hope and focus into the team during a demoralizing period.

Phillip Sharp notes that Alnylam, founded in 2002, took 16 years to get its first drug approval and will take 23 years to become profitable. This long timeline underscores the massive capital and persistence required to translate a foundational scientific discovery into a commercial success.

Over 20 years, Alnylam raised $7.5 billion. Remarkably, this was evenly split between equity financing from capital markets and non-dilutive funding from pharmaceutical partnerships. This balanced strategy was essential for financing a long, capital-intensive R&D journey while managing shareholder dilution.

Facing industry-wide skepticism in 2010, Alnylam implemented a highly disciplined R&D strategy. They focused exclusively on targets that met strict criteria: liver expression (where delivery worked), human genetic validation (to de-risk biology), and an early biomarker. This strategic focus was key to their survival and success.

While large pharma companies invested heavily in RNAi and failed to produce candidates, Alnylam maintained a singular focus. They pushed their technology into human trials to learn and validate it, ultimately succeeding where better-funded competitors with a less focused, product-driven approach failed.

Phillip Sharp highlights how the lipid nanoparticle (LNP) technology developed for Alnylam's RNAi drugs was the same technology that enabled the rapid development of mRNA vaccines during the pandemic. This shows how foundational R&D can have unexpected, world-changing applications.

The high probability of success for Alnylam's drugs seems simple now but was the result of years of work. They had to perfect a delivery modality, prove its safety, and identify validated targets in an accessible tissue (the liver). Only after solving these three monumental challenges did drug development become repeatable.

Building any biotech is incredibly hard, so trying to find an 'easy' problem is a fallacy. Instead, founders should choose a massive, impactful problem. The sheer scale of the mission provides the necessary motivation for the team to persist through the inevitable, extreme challenges of development.

Andrew Lo advocates funding a diverse portfolio of drug candidates. By taking “multiple shots on goal,” the high risk of individual failures is mitigated. The immense success of just one or two approved drugs can financially cover the costs of the entire portfolio, making early-stage biotech investment more viable and rational.