"A One Trick Pony" in Barrons hits the nail on the head
At the large tertiary medical center where I am associated, all of the appropriate patients with PNH have already been started on Soliris. I strongly suspect that the number of new PNH Soliris candidates is rapidly dwindling. Soliris is a moderately effective, but not a curative drug for PNH. Soliris's MAIN benefit for PNH patients has been reduction of thrombosis. There is now available a new generation of oral anticoagulalants which do not require monitoring by blood test(one dose fits all) as does coumadin. One of these drugs, dabigatran(Pradaxa), has already been shown to be more effective then coumadin in preventing thrombotic strokes in patients with atrial fibrillation, and is now the recommended drug for new patients discovered to have atrail fibrillation..This new class of anticoagulants have not been studied in PNH and may well be sufficient anti-thrombotics that it will be hard to justify $409,000/year for Soliris, particularly with the looming health care $ crunch. Although Soliris just last week appears to have found a new indication in dense deposit glomerulonephritis, this is again an incredibly rare disease, akin to aHUS. In my opinion the future growth of Soliris is severely threatened by the declining reservoir of PNH patients, and a possible challenge to the rational for the use of Soliris by the new class of anti-Xa and direct thrombin anticoagulants. It remains highly uncertain whether enough new indications for Soliris will emerge to justify the incredibly high P/E and 17+ billion market cap
so according to your evaluation of the problems with PNH, you would only treat with an anti-coag? You should go back to med school, as that is not the problem with PNH, it is secondary to the lysis of RBCs associated with dysfunctional PIG-A, which results in loss of protective complement defense molecules. If treat with only anti-coags, you still have anemia and other morbidity issues.
I suggest that you continue to short based on your medical "expertise"!!
MGHMD makes a valid point- the mortality of PNH is related to thrombosis- PIG loss on platelets leading to C activation. The reduction in transfusion, while valid, would not appear to validate an expensive drug unless the risk benefit analyses revealed that the morbidity and mortality associated with transfusions is greater than after treatment with Eculiz. As the health care reform/ insurance crises loom- such a cost benefit analyses may well be done. Also, Ecu. does not change the possibility of PNH evolving into a hematologic malignancy. The drug was approved by the FDA with Orphan status because it met it's stage three clinical endpoints, and the rare disease paradigm cost was pioneered by Genzyme.
A very poorly research hack piece that hardly did any in-depth analysis on the company. To speak to cub analyst at Morningstar ??? Since when do they have any market influence---they're even below S&P. Since when are p/e ratios the defining measure in stock analysis? I guess Barron's had pages to fill.
The Barron's article will likely "burst the bubble", but fails to make the point about the possibility of substituting Soliris' anti-thrombotic benefit with Pradaxa or Xarleto, at less then 1/1000 the cost per year of Soliris. I think this point bears emphasizing. I think ALXN is heading for 70.