|Alexion's New CEO Ludwig Hantson is making major executive changes|
By Mitchell Young
New Haven: In spite of unexpected sales and earnings growth announced by Alexion Pharmaceuticals [Nasdaq: ALXN] just weeks ago, the company’s stock has been dropping for most of the past month. The stock took a huge hit with a nearly 10% fall in value on May 23.
There may be a lot of action in the stores on Broadway, but when it comes to corporate board room drama, New Haven at least until now has been a sleepy little college town.
Well everyone is awake at 100 College Street, the one day stock dive followed the announcement that Ludwig Hantson, Ph.D., Alexion’s newly appointed CEO is making major changes in the C Level Suite.
Hantson was recently CEO of Baxalta of Bannockburn, IL and like Alexion it's a leader in treating rare disease. The company had sales of $6 billion when it was sold for $32 billion to Shire Pharmaceuticals [Nasdaq: SHPG] of Dublin, Ireland in June 2016.
Hantson's changes are substantial, CFO Dave Anderson will “resign”, at the end of August, the former Honeywell executive was first hired this past December. A search is underway for a replacement.
Martin MacKay, EVP and Head of Research and Development, will retire from Alexion at year’s end. Clare Carmichael, EVP and Chief Human Resources Officer, is leaving at the end of the month, as will Chief Commercial Officer Carsten Thiel, both to “pursue new opportunities.”
Thiel will be replaced by Brian Goff, a bioscience executive with extensive experience in blood disease, as the company’s new Chief Commercial Officer, effective June 1st.
Goff was most recently Chief Operating Officer of Neurovance of Cambridge, Mass., a biotech with a drug to treat Attention Deficit Disorder, the company was sold this March. Prior to Neurovance, he worked for Hantson as EVP of Baxalta and President of its $3.9 billion Hematology division.
Personnel changes at Alexion have been coming fast and furious for the past six months.
Co-Founder Leonard Bell resigned as chairman in April and David Brennan formerly CEO of AstraZeneca [NYSE: AZN] was named Chairman.
Brennan a then board member was first named interim CEO when the company jettisoned CEO David Hallal and CFO Vikhas Sinha last November after allegations of accounting irregularities were raised by a former employee.
After a two-month investigation, the company made a minor adjustment to its financials and in short order announced that revenues rose 24.1% year over year, to $870 million, exceeding Wall Street analysts’ expectations. The results showed that company efforts to continue to develop its flagship drug Solirs were paying off and some progress with acquisition drugs Strensiq and Kanuma were beginning to show as well.
Alexion said at the time it expects revenues to be $3.4 to $3.5 billion, with revenues for Soliris sales to be just over $3 billion for 2017.
With the bad news, ostensibly behind it, the company announced Bell’s retirement, Hantson’s hiring, a 5% trim in its workforce and the ascension of Brennan to chairman.
Wall Street seemed happy and the stock hit $133 per share on May 2, only twenty days later it traded at $102, before setting in at 104, a nearly $7 billion drop in value.
Blame It On Brazil or Maybe Kanuma
On May 8, Alexion's São Paulo offices were raided with officials claiming that the company subsidized lawsuits for patients to get access to its drug via Brazil's national health system and the stock began its decline.
Citing the raid, on May 23 Bronstein, Gewirtz & Grossman, LLC, a “boutique litigation firm” in NYC said it was launching an investigation for potential claims on “behalf of purchasers of Alexion stock.”
While the new CEO praised the outgoing executives, the company which expected to face new competition for Soliris in the next few years, [see Alexion: As A New Year Begins – The Future Is Suddenly Uncertain] has had difficulty making its $8.4 billion dollar acquisition of Synageva of Lexington, MA, to acquire the drug Kanuma meet expectations.
Kanuma which treats a very rare disease, is reportedly the most expensive drug available today. In February, British health regulators denied the purchase of the drug, citing its potential long term effectiveness and high costs. Last February the company estimated that sales for the drug would be $163 million in 2017, in the first quarter it had booked $12 million.
Graphic Describing Achillion's Technology For Drug Development
New Haven: Achillion Pharmaceuticals, Inc. [Nasdaq: ACHN] today reported financial results for the three months ended March 31, 2017.
The company continues to show quarterly losses but with still have more than $386 million in cash and short-term securities. For the first quarter of 2017, the Company reported a net loss of $20.2 million or $0.15 per share, compared with a net loss of $18.1 million or $0.13 per share for the first quarter of 2016.
In 2016 Achillion entered into a marketing and development agreement for its Hepatitis C drugs with Jansen Pharmaceuticals a division of Johnson & Johnson. The deal brought a $225 million purchase of stock along with agreed upon payments and royalties as “benchmarks” are reached. The agreement netted Achillion $15 million in the fourth quarter of 2016.
The heavy lifting for the Hep C drugs is being done by Jansen and Achillion is focusing on new drug development.
Research and development expenses for the company were $15.5 million in the first quarter of 2017, nearly a $2 million increase from the prior year. The spending is for a set of new drugs that the company is hoping to develop is and putting it clinical trials.
Across the street from Achillion, Alexion Pharmaceuticals [Nasdaq: ALXN] is doing $3 billion treating a rear disease PNH (Paroxysmal Nocturnal Hemoglobinuria), with its breakthrough drug Soliris.
By Mitchell Young
New Haven: Worry warts that reacted to Alexion Pharmaceuticals, Inc.’s [Nasdaq: ALXN] announcement that it was trimming its world wide work force by 5% will be surprised by the company’s first-quarter 2017 financial results
Revenues rose 24.1% year over year to $870 million, exceeding analysts expectations of $821 million. There was a small benefit from an accounting change, but reveneus increased by 20% organically.
Shares of Alexion were up more than 5% at the end of trading, in response to the better-than expected results.
The news comes at a good time for the stock as drugs competitive to its flag ship product Soliris started getting some headlines with clinical trial announcements. Soliris sales however continued to rise as the company has found new disease treatments for the drug. The best news for investors is that the company’s big acquisition bets [more than $10 billion total] are starting to show up in sales.
By Mitchell Young
New Haven: Biohaven Pharmaceuticals founded in 2013, is developing treatments for neurological diseases and rare disorders, announced terms for its IPO. The company plans to raise $125 million by offering 8.3 million shares at a price range of $14 to $16 and will be listed on the NYSE, with the symbol BHVN.
Insiders will reportedly purchase $70 million worth of shares in the offering (56%), providing the company a fully diluted market value of $546 million [at the midpoint of the IPO range]. Morgan Stanley, Piper Jaffray and Barclays are the joint underwriters, and the stock is expected to price during the week of May 1, 2017.
Farmington: Jackson Labs continues to attract an eclectic mix of grants for its genomic research efforts. Among the most recent, a two-year grant totaling $455,000 from the National Institutes of Health to Michael V. Wiles, Ph.D., senior director of Technology Evaluation and Development. According to the lab, the grant will support research to “improve the accuracy and efficiency of genome editing for research, drug testing and future therapeutic delivery.”
The technology known as CRISPR-Cas9 has “revolutionized scientists’ ability” to edit the genomes of plants and animals, including mice and humans, to study and manipulate the genome. Wiles is hoping to make the genetic modifications more “consistent and reproducible,” especially when inserting “long segments of DNA into a genome.”
By Mitchell Young
New Haven: Achillion Pharmaceuticals [Nasdaq: ACHN] presented data on its three drug combination to treat Hepatitis C, at The International Liver Congress in Amsterdam in late April, just a week before the national kick-off of Hep C Awareness Month.
Achillion sold the marketing and developing rights to their Hepatitis C drugs in 2015 to Jansen Pharmaceuticals a division of Johnson and Johnson [NYSE: JNJ]. J&J paid $225 million in an upfront purchase of stock at $12.50 per share, double the then share price and about four times the current price per share. Additionally, Jansen agreed to additional payments as various clinical testing, approvals and sales benchmarks were reached. Achillion said at the time the deal would be worth at least $1 billion to the company if the drugs eventually reached the market and were well received.
STAMFORD: Cara Therapeutics, Inc. (Nasdaq:CARA), a biotechnology company focused “new chemical entities” designed to alleviate pain and pruritus [itching] closed on a public offering of 5,117,500 shares of its common stock $18.00 per share.
Cara said it will use the funds for the clinical and research development activities, including the completion of the Phase 3 program for I.V. CR845 in uremic pruritus, two Phase 3 trials of I.V. CR845 in acute pain and a Phase 2b trial of oral CR845 in osteoarthritis pain, as well as for working capital and general corporate purposes.
Cara’s says its drugs work differently than “existing mu opioid, NSAID or acetaminophen, and provides pain relief without the significant side effects you find in yesterday’s and today’s medicines.”
The Company reported a net loss of $22.0 million, or $0.81 per basic and diluted share, for the fourth quarter of 2016 compared to a net loss of $9.5 million, or $0.35 per basic and diluted share, for the same period of 2015.