ALNYLAM PHARMACEUTICALS, INC.ALNY
ALNYLAM PHARMACEUTICALS, INC. Stock Compensation Disclosure
10. STOCKHOLDERS' EQUITY (DEFICIT)
Stock-Based Compensation
The following table summarizes stock-based compensation expenses included in operating costs and expenses:
| Years Ended December 31, | |||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Research and development | $ | 153,395 | $ | 127,749 | $ | 97,273 | |||||||||||
| Selling, general and administrative | 194,840 | 144,335 | 124,407 | ||||||||||||||
| Total | $ | 348,235 | $ | 272,084 | $ | 221,680 | |||||||||||
The following table summarizes stock-based compensation expense by type of award:
| Years Ended December 31, | |||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Time-based restricted stock units | $ | 164,785 | $ | 108,501 | $ | 55,169 | |||||||||||
| Performance-based restricted stock units | 121,449 | 73,295 | 63,879 | ||||||||||||||
| Time-based stock options | 56,477 | 85,467 | 99,165 | ||||||||||||||
| Other equity programs | 10,034 | 8,054 | 7,652 | ||||||||||||||
| Less: Stock-based compensation expense capitalized to inventory | (4,510) | (3,233) | (4,185) | ||||||||||||||
| Total | $ | 348,235 | $ | 272,084 | $ | 221,680 | |||||||||||
The following table summarizes our unrecognized stock-based compensation expense, net of estimated forfeitures, by type of awards, and the weighted-average period over which that expense is expected to be recognized:
| As of December 31, 2025 | |||||||||||
| Unrecognized Expense, Net of Estimated Forfeitures (in thousands) | Weighted-average Recognition Period (in years) | ||||||||||
| Time-based restricted stock units | $ | 221,963 | 1.54 | ||||||||
| Performance-based restricted stock units * | $ | 59,409 | 2.13 | ||||||||
| Time-based stock options | $ | 39,276 | 1.71 | ||||||||
| Other equity programs | $ | 3,957 | 0.53 | ||||||||
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*Excludes performance-based restricted stock units for which the associated vesting events are not yet determined to be probable.
Time-Based Restricted Stock Units and Awards
The following table summarizes the activity of our time-based restricted stock units and awards, excluding performance-based restricted stock units:
| Number of Units (in thousands) | Weighted-average Grant Date Fair Value (per share) | ||||||||||
| Outstanding as of December 31, 2024 | 1,725 | $ | 175.39 | ||||||||
| Awarded | 894 | $ | 266.05 | ||||||||
| Released | (702) | $ | 177.13 | ||||||||
| Cancelled | (181) | $ | 194.93 | ||||||||
| Outstanding as of December 31, 2025 | 1,736 | $ | 219.38 | ||||||||
Performance-Based Restricted Stock Units
The following table summarizes the activity of our performance-based restricted stock units:
| Number of Units (in thousands) | Weighted-average Grant Date Fair Value (per share) | ||||||||||
| Outstanding as of December 31, 2024 | 954 | $ | 156.56 | ||||||||
| Awarded | 396 | $ | 243.53 | ||||||||
| Released | (451) | $ | 157.31 | ||||||||
| Cancelled | (120) | $ | 183.73 | ||||||||
| Outstanding as of December 31, 2025 | 779 | $ | 197.48 | ||||||||
Certain performance-based restricted stock units will vest upon the three-year anniversary of the date of grant, with the number of shares vested dependent on the assessed level of achievement of specific clinical development, regulatory, commercial and/or financial performance events, as approved by our people, culture and compensation committee. Certain performance-based restricted stock units will vest upon the later of the one-year anniversary of the date of grant and the achievement of specific clinical development, regulatory, commercial and/or financial performance events, as approved by our people, culture and compensation committee, with the number of shares vested established on the grant date.
Time-Based Stock Options
The following table summarizes the activity of our time-based stock options, excluding performance-based stock options:
| Number of Options (in thousands) | Weighted-average Exercise Price (per share) | Weighted-average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
| Outstanding as of December 31, 2024 | 4,863 | $ | 133.80 | ||||||||||||||||||||
| Granted | 288 | $ | 248.08 | ||||||||||||||||||||
| Exercised | (1,683) | $ | 128.58 | ||||||||||||||||||||
| Cancelled | (101) | $ | 183.51 | ||||||||||||||||||||
| Outstanding as of December 31, 2025 | 3,367 | $ | 144.73 | 5.38 | $ | 850,730 | |||||||||||||||||
| Exercisable as of December 31, 2025 | 2,744 | $ | 132.29 | 4.80 | $ | 728,074 | |||||||||||||||||
| Vested or expected to vest as of December 31, 2025 | 3,320 | $ | 143.93 | 5.35 | $ | 842,655 | |||||||||||||||||
The weighted-average fair value of stock options granted was $124.07, $79.39 and $96.53 per share for the years ended December 31, 2025, 2024 and 2023, respectively. The intrinsic value of stock options exercised was $366.3 million, $273.2 million and $107.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. We satisfy stock option exercises with newly issued shares of our common stock.
Performance-Based Stock Options
The following table summarizes the activity of our performance-based stock options granted under our equity plans:
| Number of Options (in thousands) | Weighted-average Exercise Price (per share) | Weighted-average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
| Outstanding as of December 31, 2024 | 273 | $ | 99.24 | ||||||||||||||||||||
| Exercised | (153) | $ | 99.08 | ||||||||||||||||||||
| Outstanding as of December 31, 2025 | 120 | $ | 99.44 | 1.83 | $ | 35,737 | |||||||||||||||||
| Exercisable as of December 31, 2025 | 120 | $ | 99.44 | 1.83 | $ | 35,737 | |||||||||||||||||
The intrinsic value of performance-based stock options exercised was $37.1 million, $22.5 million and $9.7 million for the years ended December 31, 2025, 2024 and 2023, respectively. We satisfy performance-based stock option exercises with newly issued shares of our common stock.
Valuation Assumptions for Stock Options
The grant-date fair value of stock options was estimated using the Black-Scholes option-pricing model. Our expected stock-price volatility assumption is based on the historical volatility of our publicly traded stock. The expected life assumption is based on our historical data. The dividend yield assumption is based on the fact that we have never paid cash dividends and have no present intention to pay cash dividends. The risk-free rate for periods within the expected option life is based on the U.S. Treasury yield curve in effect at the time of grant.
The following table summarizes the Black-Scholes valuation assumption inputs for employee stock options granted:
Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Risk-free interest rate | 4.0 - 4.1% | 4.2 - 4.3% | 3.5 - 4.1% | ||||||||||||||
| Expected dividend yield | — | — | — | ||||||||||||||
| Expected option life | 5.9 years | 6.0 years | 5.1 - 7.0 years | ||||||||||||||
| Expected volatility | 46 - 47% | 47 - 48% | 49 - 60% | ||||||||||||||
Stock Plans
In May 2025, our stockholders approved the second amendment and restatement of our 2018 Stock Incentive Plan, or, the Second Amended and Restated 2018 Plan, which increased the number of shares authorized for issuance thereunder by 7,000,000 shares. The Second Amended and Restated 2018 Plan provides for the granting of stock options, restricted stock and restricted stock units (together, restricted stock awards), stock appreciation rights and other stock-based awards, and has a fungible share pool. Any award that is not a full value award is counted against the authorized share limits specified as one share for each share of common stock subject to the award, and all full value awards, defined as restricted stock awards or other stock-based awards, are counted as one and a half shares for each one share of common stock subject to such full value award.
As of December 31, 2025, an aggregate of 16,891,503 shares of common stock were reserved for issuance under our stock plans, including outstanding stock options to purchase 3,487,323 shares of common stock, 2,515,120 outstanding restricted stock units, 10,514,222 shares of common stock available for additional equity awards and 374,838 shares of common stock available for future grant under our Amended and Restated 2004 Employee Stock Purchase Plan, as amended, or the Amended and Restated ESPP. Each stock option shall expire within 10 years of grant date. Time-based stock options granted to employees generally vest as to 25% of the shares on the first anniversary of the grant date and 6.25% of the shares at the end of each successive three-month period thereafter until fully vested. Restricted stock units granted to employees generally vest over a three-year period, with one-third of the shares vesting on each of the three successive anniversaries of the grant date. Vesting may be accelerated in certain circumstances, including upon death, disability, retirement or termination without cause in connection with a change of control.
Employee Stock Purchase Plan
In 2004, we adopted the 2004 Employee Stock Purchase Plan and in 2017, our stockholders approved the Amended and Restated ESPP. In 2020, our stockholders approved an amendment to the Amended and Restated ESPP, to increase the number of shares authorized for issuance to 1,965,789 shares. Under the Amended and Restated ESPP, as amended, each offering period is six months, at the end of which employees may purchase shares of common stock through payroll deductions made over the term of the offering. The per-share purchase price at the end of each offering period is equal to the lesser of 85% of the closing price of our common stock at the beginning or end of the offering period. We issued 92,868 and 140,161 shares during the years ended December 31, 2025 and 2024, respectively.
We estimate the fair value of shares to be issued under the Amended and Restated ESPP, as amended, using the Black-Scholes option-pricing model on the date of grant, or first day of the offering period. The following table summarizes the Black-Scholes valuation assumption inputs for stock purchase rights granted under the employee stock purchase plan:
Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Risk-free interest rate | 3.8% - 4.2% | 4.4% - 5.4% | 5.1% - 5.4% | ||||||||||||||
| Expected dividend yield | — | — | — | ||||||||||||||
| Expected option life | 6 months | 6 months | 6 months | ||||||||||||||
| Expected volatility | 38% - 48% | 35% - 54% | 34% - 39% | ||||||||||||||
Preferred Stock
We have authorized up to 5,000,000 shares of preferred stock, $0.01 par value per share, for issuance. The preferred stock will have such rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, as shall be determined by our board of directors upon its issuance. As of December 31, 2025 and 2024, there were no shares of preferred stock outstanding.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.