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Alexion (ALXN) Licenses Artubus Technology for Rare Diseases

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Alexion Pharmaceuticals, Inc. has recently licensed Arbutus Biopharma Corporation’s (ABUS - Free Report) proprietary lipid nanoparticle (LNP) technology for use in one of former’s rare disease programs.

The agreement enables Alexion to address the delivery of therapeutic application of messenger RNA (mRNA) and progress with the clinical development with its product candidate.

Alexion will pay $7.5 million on an upfront basis to Arbutus and up to $75 million for development, regulatory, and commercial milestones, as well as single digit royalties. Additionally, Arbutus will conduct technology development and provide manufacturing and regulatory support for the rapid advancement of Alexion’s mRNA product candidate.

We note that Alexion’s share price shows that the company has underperformed the Zacks classified Medical - Biomedical and Genetics industry in the last year. The stock declined 4.1% compared to the industry’s gain of 2.2% over the same time frame.

In fact, the company has had a difficult time throughout 2016 and continues to be under pressure. Shares of Alexion touched a 52-week low in Dec 2016 after it announced the sudden departure of its key executives – the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) – during an internal investigation into the sales practices related to Soliris. The timing of the executives’ departure did not go unnoticed by investors. Specifically, the Audit and Finance Committee conducted an investigation into allegations made by a former employee regarding sales practices involving Soliris.

Earlier in the week, Alexion announced that it will reduce its workforce by 7% in a company-wide restructuring program.

Zacks Rank & Stocks to Consider

Alexion currently carries a Zacks Rank #4 (Sell). 

Some better-ranked stocks in the health care sector include Heska Corp. and Retrophin, Inc. . Both these stocks carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Heska’s earnings estimates increased from $1.53 to $1.65 for 2017 and from $1.90 to $2.01 for 2018 over the last 30 days. The company posted a positive earnings surprise in all the four trailing quarters with an average beat of 291.54%. Its share price increased 32.5% year to date.

Retrophin’s loss estimates narrowed from 85 cents 72 cents for 2017 and from 67 cents to 53 cents for 2018 over the last 30 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 80.55%.

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