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The U.S. Food and Drug Administration (FDA) granted an orphan drug designation to Alexion Pharmaceuticals, Inc.’s (ALXN - Analyst Report) Soliris (eculizumab) for preventing delayed graft function (DGF) in renal transplant patients. In DGF affected renal transplant patients, the transplanted organ fails to function properly immediately after the procedure. Kidney transplant patients affected with DGF have to undergo dialysis.

The designation is granted by the FDA to indications being developed to treat/prevent rare diseases (affecting less than 200,000 people in the U.S.) having significant unmet medical needs. Moreover, the status makes the drug eligible for seven years of marketing exclusivity in the U.S. following approval for the orphan indication. Additionally, this status also provides several other benefits to Alexion Pharma on the candidate’s development costs.

We note that Soliris is Alexion Pharma’s sole marketed product. Soliris is available for the treatment of paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS). Alexion Pharma is looking to expand Soliris’ label into other indications as well including the prevention of DGF in renal transplant patients. Alexion Pharma intends to commence a single multinational registration study on Soliris in DGF patients during the course of the year.

Alexion Pharma expects six product approvals within the time period of 2014 to 2018 including asfotase alfa (hypophosphatasia), ALXN 1101 (MoCD type A) and Soliris’ label expansion. Asfotase alfa is expected to be approved by year end. This will reduce the company’s dependence on Soliris for growth.

We expect the company to provide an update on its pipeline while releasing its fourth quarter and full year 2013 financial results on Jan 30. We expect Alexion Pharma to deliver impressive fourth quarter 2013 revenues driven by strong Soliris sales in the PNH and aHUS indications.

Alexion Pharma, a biopharmaceutical company, carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the biopharma space include Actelion Ltd. (ALIOF), Alnylam Pharmaceuticals Inc. (ALNY - Analyst Report) and Medivation, Inc. (MDVN - Analyst Report). While Actelion carries a Zacks Rank #1 (Strong Buy), Alnylam and Medivation hold a Zacks Rank #2 (Buy).

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