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Analyst Blog

Recently, Alexion Pharmaceuticals, Inc. (ALXN - Analyst Report) made an encouraging move by seeking to expand the label of its sole marketed drug, Soliris (eculizumab).

To achieve this objective, Alexion submitted marketing applications in the US and the European Union (EU) seeking approval of the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA), to market Soliris for treating patients suffering from atypical hemolytic uremic syndrome (aHUS).

We note that Soliris is already available in the US markets for treating patients suffering from paroxysmal nocturnal hemoglobinuria (PNH), a rare genetic blood disorder. Along with the US, Soliris is approved for PNH in the EU, Japan and many other countries However, the efforts of Alexion to expand the drug’s label are encouraging since sole dependence on Soliris, only for PNH, is risky.

Approval for marketing Soliris in the EU and the US has been sought on the basis of encouraging data from two mid-stage studies. The 26-week studies evaluated Soliris for treating adults and adolescents suffering from aHUS. Atypical hemolytic uremic syndrome refers to a very rare disease often leading to heart attack, stroke or kidney failure which can even prove to be fatal.

We note that the market for aHUS has a huge unmet need as patients suffering from the disorder have limited treatment options. Consequently if Soliris is approved for treating the disease then the market potential for this product will be expanded further . Apart from aHUS, Soliris is also being evaluated by Alexion for other indications.

2011 revenue guidance upped

Apart from announcing the submission of marketing applications in the US and the EU, Alexion also revised the projection for 2011 revenues (provided by the company while announcing the fourth quarter and full-year 2010 results) upwards.

Alexion now expects 2011 revenues in the range of $720 to $740 million. The previously forecasted range was $715 million - $735 million. The increased forecast was based on the impressive sales of Soliris for the PNH indication. The expectation of Soliris getting approved in the US for aHUS as early as in the fourth quarter of 2011, assuming priority review, also contributed to the increased revenue forecast.

The revised revenue forecast for 2011 also takes into account the possibility of treatment disruptions for the patients in Japan due to the recent natural disaster in that country. Forecast for other items remains unaltered.

Our Recommendation

Currently, we have a Neutral stance on Alexion which is supported by a Zacks #3 Rank (short-term Hold recommendation).

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