Alexion Pharmaceuticals ALXN reported strong third-quarter results, and we are likely to slightly increase our fair value estimate as a result. Sales came in higher than our expectations at $103 million, rising 34% from the third quarter of 2008. Addition of new patients in the United States and European Union largely drove this increase. Operating costs climbed to $63 million, an increase of 34% from the comparable period last year, as Alexion continued to expand its salesforce and support clinical trials. The firm is conducting 12 trials for other indications of Soliris. We see some positive near-term catalysts. Management said it observed an increased proportion of newly diagnosed patients taking Soliris this quarter, which bodes well for its efforts to increase awareness about paroxysmal nocturnal hemoglobinuria. However, we do still worry that this diagnosis rate could slow as it gets incrementally harder to identify patients with this rare disease. Expansion into other geographies should help increase the potential patient pool and boost growth rates. We view expansion into Japan as a particularly lucrative prospect. We expect approval to come in Japan in late 2010.
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Analyst Notes
07-23-09 | 11:06AM Strong 2Q for Alexion
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