Alexion rises after solid 4Q report and outlook

Alexion rises after reporting strong Soliris 4th-quarter sales and solid 2012 outlook

Associated Press

NEW YORK (AP) -- Shares of Alexion Pharmaceuticals Inc. edged higher Friday after the company reported a strong fourth quarter based on improved sales of its blood disorder drug Soliris.

THE SPARK: After the market closed on Thursday, Alexion said its quarterly profit rose 82 percent and revenue increased 46 percent. Both surpassed analyst estimates, and the company said sales of Soliris should grow more than 80 percent in 2012 after the drug received an additional marketing approval.

THE BIG PICTURE: Soliris is the Cheshire, Conn., company's only drug on the market. It was approved in 2007 as a treatment for paroxysmal nocturnal hemoglobinuria, or PNH, which causes a breakdown of red blood cells and leads to anemia. The drug was approved in late 2011 as a treatment for a second condition, atypical hemolytic uremic syndrome, which often leads to kidney failure and death. Alexion said most of its sales growth in the fourth quarter came from PNH patients.

Alexion has only recently launched Soliris as a treatment for aHUS in the U.S. and will begin marketing the drug to European patients with that condition this year. Alexion is also testing Soliris as a treatment for several other conditions, including blood and kidney disorders, neurological illnesses, and age-related macular degeneration. Later this year the company expects to report data from a clinical trial of Soliris as a treatment for STEC-HUS, which is a very rare complication of another type of infection.

After Alexion has the trial data, it plans to have discussions with regulators about filing for approval of Soliris as a treatment for Shiga-toxin producing E. coli hemolytic uremic syndrome. The company is also studying several other drug candidates.

THE ANALYSIS: Robert W. Baird & Co. analyst Christopher Raymond upgraded the stock to "Outperform" from "Neutral" Friday, saying Alexion raised its guidance four times in 2011 and still did better than analysts expected. He added that STEC-HUS could be a major new market for Soliris: about 20,000 U.S. patients develop the condition every year, and treatment might cost about $60,000 per patient. Raymond raised his price target to $100 per share from $72.

William Blair & Co. analyst John Sonnier kept an "Outperform" rating and praised the company's strategy.

"We like management's decision to focus on its core strength in severe, ultra-rare, life-threatening diseases and believe the company has a nice mix of early- and late-stage compounds in development that offer near and long-term growth potential," he said.

SHARE ACTION: Alexion shares rose $2.37, or 2.9 percent, to $82.78 in midday trading. The stock has nearly doubled in value over the last year and are up 15.8 percent in 2012, compared with a gain of 6.6 percent in the benchmark Standard & Poor's 500.

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