SLN is a clinical-stage company developing a competitive siRNA therapy in a condition that affects ~70 million+ people in the US (Lp(a)-causing cardiovascular disease) but has no approved therapy. Our Outperform thesis is based on the following potential upside drivers in the near/mid-term: (1) SLN's PhII data in Lp(a) lowering; (2) Biopharma partnership or SLN acquisition targeting SLN's Lp(a) program; (3) CVOT data in ~mid-2025 (by NVS/IONS) validating the relationship between Lp(a)/ CVD risk. Lp(a) is a ~$20B+ emerging space and SLN is a key player to watch (landscape here).
Silence is a clinical-stage company developing RNAi therapies. Silence's pipeline programs include: (1) Zerlasiran for Lp(a) reduction, a cardiovascular risk factor; (2) SLN124 for polycythemia vera.
Zerlasiran demonstrated up to ~100% Lp(a) reduction in clinic, a target that is linked to CV risk. Elevated Lp(a) (>50mg/dL) is one of the most prevalent inherited risk factors for ASCVD, affecting ~20-25% of people globally. There are no approved treatments directly targeting Lp(a), while lifestyle modifications cannot impact the Lp(a) levels. We believe Zerlasiran is well positioned in the Lp(a) space given: (1) Clean safety with significant efficacy, including up to ~100% Lp(a) lowering; (2) Infrequent dosing, that we estimate to be ~Q12W-Q16W. In 2024, we anticipate Zerlasiran's additional PhII readouts to provide upside, while Pelacarsen's CVOT readout in ~2Q25 is expected to validate the Lp(a)/CVD relationship, driving ~50-100% upside in SLN.
SLN124 for polycythemia vera treatment demonstrated a promising profile in healthy volunteers. SLN124 clinical efficacy to date appears to be similar to competitors in this space, while SLN124 also offers an attractive dosing regimen (potentially Q6M vs. QW for Rusfertide) and clean safety. In 2Q24, we await SLN124 PhI/ PhII data in PV patients to further assess SLN124 potential, but note that SLN124 is not a major valuation driver.
SLN's promising Lp(a) program, coupled with SLN's low valuation, render SLN an attractive partner (for Zerlasiran co-development/commercialization) and a potential M&A target. There are currently eight major players in the Lp(a) space (deep dive here), with consensus estimates pointing to a ~$20B+ Lp(a) market size. We believe Zerlasiran's clinically derisked profile, along with its favorable administration frequency, position SLN as one of the most competitive players in this space. That said, we anticipate Zerlasiran's favorable data to trigger an SLN/biopharma partnership or SLN acquisition in the near/mid-term.
Our target price of $67 for Silence is based on our sum-ofthe-parts (SOTP) discounted cash flow analysis driven by NPV of Zerlasiran, SLN124 cash flows through 2041. We use a WACC of 14% based on the methodology for our biotech coverage (12-13% for companies with PhII data and 15% for companies with preclinical/PhI data). We assign a terminal value to Silence revenues with a growth rate of 0%.
Our upside case assumes validation of clinical effect of Lp(a) lowering. Under this scenario, peak risk-adjusted revenues increase from approximately $3.1 billion to approximately $3.8 billion. For the upside scenario to materialize, Pelacarsen’s PhIII CVOT will meet the primary endpoint.
Our downside case assumes lack of validation of clinical effect of Lp(a) lowering. Under this scenario, peak riskadjusted revenues decrease from approximately $3.1 billion to approximately $400 million. For the downside scenario to materialize, Pelacarsen’s PhIII CVOT will fail to meet the primary endpoint.
Key catalysts for SLN include: (1) Topline PhII 36wk/48wk/60wk data readout for Zerlasiran (1Q24/2Q24/3Q24); (2) PhI multiple-dose data for Zerlasiran (2Q24); (3) PhII data readout for Zerlasiran (3Q24); (4) PhI data readout in PV patients for SLN124 (2Q24); (5) PhII data readout for Lepodisiran (2024); (6) PhII data readout for Sapablursen (2024); (7) Pelacarsen PhIII data readout (2Q25).
Silence Therapeutics is a biotechnology company that discovers and develops siRNAs to silence gene expression of disease-associated proteins. Pipeline programs include: (1) Zerlasiran targeting the LPA for the treatment of elevated Lp(a) levels; (2) SLN124 targeting the TMPRSS6 for the treatment of polycythemia vera; (3) Up to 14 pipeline programs across 3 collaborations.