Lam and Alnylam: time well spent

Accumulated expertise could enable Alnylam and Lam Research to extend their growth into much larger markets than those that initially established them.

• Alnylam spent 16 years from its founding to the approval of Onpattro, with more than 80% of its R&D expenditure during its first decade devoted to solving liver delivery.
• This experience has produced a cumulative clinical success probability above 50% for Alnylam, compared with under 10% for the industry average, while the company now has six approved drugs.
• Alnylam is investing $250 million to expand its Massachusetts manufacturing capacity; zilebesiran could address hypertension affecting approximately 1.4 billion people, while mivelsiran could extend RNAi delivery beyond the liver to Alzheimer’s disease and cerebral amyloid angiopathy.
• Lam Research has spent more than a decade preparing for increasingly three-dimensional chips, after investing ahead of the vertical expansion of NAND memory; the same expertise may benefit it as DRAM and logic chips follow.
• Lam works with customers on technology inflections seven or eight years before production, and its equipment can remain in factories for more than a decade, generating servicing, spare-parts and upgrade revenues while reinforcing its technological lead.

Takeaway: The investment case depends on capabilities accumulated over many years becoming valuable in new markets, although Alnylam’s broader franchise may not be evident until the early 2030s and consensus expects Lam’s revenue growth to fade after the current surge.