35.0% GAAP EBIT. Derived, not assumed: FY2024 -7.9%, FY2025 13.5%, Q1-2026 23.0%, FY2026 implied from guidance ~25.5%; VRTX FY2025 34.8% as the mature single-franchise structural reference. Assumes ALNY reaches Vertex's structural margin by 2031 with R&D held near 20% of sales.
Risk & exit
Four distinct questions, one field each. A price is not a thesis: the trigger below forces a re-underwrite and freezes further purchases — it is never an automatic sell.
Risk trigger 25% below the memo price
$216.38
Forward E[R] vs a 0% floor
+66.7%
A daily close below $216.38 triggers a mandatory re-underwrite and freezes further purchases. It is not an automatic sell unless a separate fundamental invalidation condition has been breached.
Thesis-invalidation conditions
Fundamental and falsifiable, never price-based. If one is satisfied the thesis is marked dead and the position is retained only by explicit decision.
FY2026 total net product revenue lands materially below the guided $4,900–5,300m. The entire 12-month target and the demonstrated-CAGR base rest on this. A print below ~$4.4bn breaks both ends. Q2, Q3, Q4-2026 earnings; guidance revision · quarterly through Feb-2027
COGS exceeds ~25% of net product revenue without a stated offset. It moved 15.0% → 20.0% in one year on a rising blended royalty rate. At 25%+ the terminal-margin assumption of 35% is no longer reachable and the implied-path test has to be re-run. quarterly income statement · quarterly
Distributor A concentration rises further, or a channel-inventory correction is disclosed. At 45% of gross revenue a single counterparty now moves reported revenue independently of demand. 10-K concentration note (annual); DSO in quarterly balance sheet · Feb-2027 / quarterly
FY2027 collaboration + royalty revenue comes in materially above $500m without a new signed agreement. That would mean the lumpy line is being used to bridge a product-revenue shortfall, and the recurring decomposition in this memo would need redoing. quarterly revenue summary · quarterly
Impairment case
Named cause, realistic permanent-loss scenario and probability in §7 below and in ALNY_Trade_Construction.md.