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Alexion's (ALXN) Soliris Drives Growth Amid Pricing Pressure

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We issued an updated report on Alexion Pharmaceuticals, Inc. on Dec 26, 2018.

Alexion is a biopharmaceutical company that focuses on the development and commercialization of life-transforming drugs for the treatment of patients with ultra-rare disorders.

The company’s lead drug Soliris, the key growth driver, is approved for the treatment of two severe and ultra-rare disorders resulting from chronic uncontrolled activation of the complement component of the immune system — paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS). Alexion is working on expanding Soliris’ label into additional indications.

The FDA had also approved the drug for the treatment of refractory gMG in patients who are anti-acetylcholine receptor antibody-positive. The drug was approved in Europe as well for this indication. The initial uptake of the drug for this indication has been encouraging as the company continues to add new patients in the United States.

Alexion received a significant boost with the FDA approval of its long-acting C5 complement inhibitor, Ultomiris for the treatment of adult patients with PNH. The FDA approval comes well ahead of its action date set for Feb 18, 2019. The approval will strengthen Alexion's PNH franchise.

Alexion is also conducting a phase I study of subcutaneous ALXN1210, co-administered with Halozyme Therapeutics, Inc.’s (HALO - Free Report) ENHANZE drug-delivery technology, PH20. In the meantime, Strensiq and Kanuma are doing well and will boost revenues.

Meanwhile, Alexion is making strategic acquisitions to diversify its portfolio. The company acquired Sweden-based Wilson Therapeutics for $855 million. The acquisition added a late-stage candidate, WTX101 to Alexion’s pipeline. The candidate is currently in phase III for the treatment of Wilson disease, a rare genetic disorder.

Alexion also acquired clinical-stage biotechnology company, Syntimmune, for $1.2 billion. Syntimmune develops antibody therapeutics, targeting the neonatal Fc receptor (FcRn). The acquisition will add a mid-stage candidate, SYNT001 to Alexion’s pipeline. Alexion announced a partnership with Complement Pharma to co-develop the preclinical C6 complement inhibitor, CP010, for neurodegenerative disorders.

Share price of Alexion has decreased 21.1% year to date, narrower than the industry’s decline of 25.6%.

 

However, pricing is likely to impact sales. Moreover, the company relies heavily on Soliris for growth.

Zacks Rank & Key Picks

Alexion currently carries a Zacks Rank #3 (Hold). A couple of better-placed stocks in the healthcare sector include Bristol-Myers Squibb Company (BMY - Free Report) and Exelixis, Inc (EXEL - Free Report) . Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Bristol-Myers’ earnings per share estimates have increased from $3.84 to $3.87 for 2018 and $4.03 to $4.14 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all the trailing four quarters, with average of 11.99%.

Exelixis’ earnings estimates have moved up from $1.03 to $1.30 for 2018 and from $1.09 to $1.25 for 2019 over the past 60 days. The company delivered positive earnings surprise in all the trailing four quarters with the average beat being 83.43%.

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