By Mitchell Young
NEW HAVEN: Alexion Pharmaceuticals Inc. [Nasdaq: Alxn] stock has finally broken out of its doldrums driven by good earnings and a positive clinical trial result. Investors Business Daily and other media outlets said the stock “rocketed,” as it went from $106 to $122 per share in two days.
Only a week earlier investors seemed willing to abandon the company, dumping the stock in response to reporting that Brazil was no longer going to recognize its patent, for flagship drug Soliris.
Even as the company offered that the report was inaccurate and that the Brazilian market was a minor contributor to the company, the stock retreated to the bottom of its six month range.
The announcement that the company would be broadening its future pipeline with the $855 million expected acquisition of Wilson Pharmaceuticals also failed to excite investors, even as analysts following the stock were positive. The transaction is expected to close in the second quarter of 2018.
Then the good news came.
Revenue for the quarter jumped 7% to $931 million, beating estimates and profits outperformed as well at $1.68 per share, compared to analysts estimates of $1.50.
The company revealed that its new Soliris replacement, ALXN1210, showed that patients with paroxysmal nocturnal hemoglobinuria (PNH) can switch from Soliris to ALXN1210. Patients will only have to receive treatment every eight weeks when using ALXN1210, instead of every two weeks on Soliris. The company had previously disclosed that ALXN1210 provided equal results for previously untreated patients.
Alexion’s management also raised profit expectations for the remainder of the year.
Soliris sales only grew 2.1%, Strensiq, a therapy for a mineral disorder, started to become meaningful however, generating $110.7 million in revenues for the quarter, a 50% increase, year over year. Even the "$10 billion" laggard Kanuma, grew at 63%, albeit at just under $20 million for the quarter.
The company highlighted the difficulty of generating revenue for drugs that treat rare diseases in a conference call reported by Seeking Alpha, an investor news serivce. The company explained that identifying potential candidates for the rare diseases that its drugs treat is a challenge. They highlighted the success of the effort for Stensiq as contributing to its sales progress.
Alexion had run into problems in Brazil and elsewhere and was widely criticized for its efforts at finding patients and helping them get treatment for Soliris. The high cost of the drug, more than $400,000 per year helped to fuel that controversy, in spite of the life altering benefits of the drug.
The company’s new CEO Ludwig Hantson had previously stressed that the company would be adhering to best practices going forward and several new members of the executive team were touted for their regulatory and corporate governance experience.