Massachusetts-based biotech firm Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) just reported a first-quarter 2016 loss, and is down pre market on the back of the release.  Alongside the numbers, however, the company gave us a pretty detailed update as to its ongoing operations, outlining a number of potential upside catalysts spread across the next 24 to 48 months. Among them, is the release of initial data from an ongoing phase I/II trial in paroxysmal nocturnal hemoglobinuria (PNH), and the subsequent kicking off of a focused phase 2 on the back of the release – assuming the trial demonstrates efficacy. The only currently available treatment for this target indication is Alexion Pharmaceuticals, Inc.’s (NASDAQ:ALXN) Soliris. At an annual cost of $440,000, Soliris is one of the most expensive drugs in the world, and as such, success in the ongoing Alnylam trials would be a step closer for the company to a multibillion-dollar market. This makes the release well worth watching, so here is an outline of the science behind the drug in question, and what to look out for when data hits come June.

The science behind this one is pretty complicated, but we can explain it in pretty simple terms for the purposes of this discussion. In our bodies we have what’s called the compliment system – an element of the immune system that targets and breaks down foreign pathogens. It works on a cascade system – that is, one protein activates and bind to the surface of foreign particles, and then activates the next protein in the chain, and so on and so on. The system creates pores in the foreign particle cells, and the immune system comes along to absorb and dispose of them. In patients with PNH, however, the complement system attacks host cells.

ALN-CC5, the company’s candidate, targets what’s called complement component 5 (C5) which is one of the last proteins to get activated in the cascade system. It binds to C5, inhibits its activation, and in turn, stops the cascade process that leads to host cell destruction.

That’s the theory, at least.

The aforementioned Soliris is the same sort of drug, so efficacy is likely going to be a secondary focus throughout the development process. Why? Because we know this type of drug works (to some extent, at least) – what we don’t really know is how safe it is. Soliris was approved despite some pretty serious safety concerns, purely because it was targeting an indication that had no available treatments at the time.

Which leads us nicely into what we are focusing on in the upcoming data release, and beyond that, into the planned phase II. Primary endpoint (from an efficacy perspective) is a reduction in C5 serum. If we see this, ideally in the 95-99% range, it suggests the drug is at least as effective as Soliris. From a safety perspective, we’re looking for two things. First, any indication that the drug is tolerable. This one’s straightforward – no serious adverse events across the patient population. The second one isn’t so straightforward – we want to see some indication that the drug affects other risks associated with PNH. These include blood clots, leukemia and anemia. Chances are we wont see data directly related to these aforementioned in the upcoming release, but when the phase II kicks off (assuming the upcoming data is indicative of continuation) we’d like to see it structured in a way that affords the opportunity to measure these implications.

Management has already stated that (as part of an initial analysis of the phase I/II data) it will be seeking a target indication of patients that are unresponsive to Soliris – this suggests that the drug has only demonstrated efficacy at or equal to that of Soliris to date, although the actual numbers are embargoed until June, so we can’t say this for certain. What this means going forward remains unclear, but chances are, if the company can pick up this approval, it will then pitch ALN-CC5 head to head with Soliris in an extension. This is where the real money lies, in the dethroning of the latter, rather than in the follow-up-to-SOC space.

Regardless, the upcoming release is definitely one to watch. Markets seem to have overlooked the company across the last few months, and it’s down 40% on its December 2016 highs, but this could change come data release. The date to watch? June 11, 2016.