Alexion Pharmaceuticals specializes in the development and marketing of drugs for life-threatening medical conditions. The firm’s sole product is Soliris, the first approved therapy for paroxysmal nocturnal hemoglobinuria, an ultra-rare blood disorder. I rarely tread into biotechnology, someone burnt by hot milk dreads even cold buttermilk. But the growth that is not ready to slowdown, the expansion of usage of its sole drug, the acquisition of Enobia Pharma and the quality of mutual funds that own this stock enticed me into buying this. I just waited for the right oppurtunity and scooped a bagfull. I still own 50% of initial purchase but plan on liquidating it once we reach 97$ range.
What does ALXN do?
As explained earlier the firm’s sole product is Soliris, the first approved therapy for paroxysmal nocturnal hemoglobinuria, an ultra-rare blood disorder. But I admire Alexion’s strong competitive position and think Soliris is on track for $1 billion in sales in 2012.
Alexion’s pipeline is dominated by additional indications for Soliris, and the firm clinched approval for the drug for the treatment of another ultra-rare blood disorder, atypical hemolytic uremic syndrome (aHUS). Neurological and kidney disorder indications for Soliris are in Phase II trials. Although Alexion’s decision to go it alone on the commercialization front likely results in a slower sales ramp than if it chose to partner with a Big Pharma firm, the company maintains full rights to the drug and should be able to leverage its existing sales force across new indications. The firm also plans to further expand internationally, and we think the Asian market (where the incidence of PNH is 2-4 times higher than that in the U.S.) holds particular promise.
Another encouraging aspect is the company’s strategy of pursuing acquisitions/signing deals to expand its pipeline beyond Soliris. The acquisitions of Taligen Therapeutics, Enobia Pharma and the purchase of the patents and assets from Orphatec Pharmaceuticals are aimed towards fulfilling this objective. Moreover, the strong balance sheet gives Alexion the opportunity to make further acquisitions/deals to develop its pipeline and expand its product portfolio.
Numbers, Shall we.
The table below depicts the pricing power of this one drug.
|Year||EPS||High ($)||Low ($)|
|Last 4 Quarters||EPS||% Change||Sales (million)||%Change||Fund Owners|
|P/E 5 Year Range||30-171|
|R&D Expense of sales||18%|