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Alexion Pharma on a High

Zacks Equity Research

Good news flowed in at Alexion Pharmaceuticals, Inc. (NasdaqGS: ALXN - News) from both the US and Europe regarding its drug Soliris (eculizumab).  While, the US Food and Drug Administration (FDA) cleared Soliris for the atypical hemolytic uremic syndrome (aHUS) indication, the European Committee for Medicinal Products for Human Use (CHMP) backed its approval for the same indication in the European Union (EU).

We note that Soliris is already marketed for the treatment of paroxysmal nocturnal hemoglobinuria (PNH) - a rare genetic blood disorder.

The FDA cleared Soliris for treating children and adults suffering from aHUS - an ultra-rare, genetic disorder. The disorder often leads to heart attack, stroke or kidney failure which can be fatal. Soliris is the first and only drug to be cleared in the US for the aHUS indication. The successful US label expansion of Soliris, Alexion’s sole marketed product, is a major achievement for the company which would boost its top line significantly.

We remind investors that Alexion submitted the marketing application in the US seeking approval to market Soliris for treating patients suffering from aHUS in April 2011. The application, reviewed on a priority basis by the FDA, was approved on the basis of encouraging data from two prospective pivotal mid-stage studies in adolescents and adults suffering from aHUS, in addition to a retrospective study which evaluated children, adolescents and adults with aHUS.

The label expansion effort of Alexion into the aHUS indication in the EU is on track with the CHMP recommending the approval of Soliris for the indication. Alexion expects the European Commission to reach a final decision regarding the matter in approximately two months. The application, seeking EU approval to market Soliris for the additional indication, was filed by Alexion in April 2011.

Currently, the markets in the EU are devoid of any therapy for treating aHUS. Consequently, if Soliris is approved in the EU then it would serve a market, which needs such a drug.

Our Recommendation

Currently, we have an Outperform recommendation on Alexion in the long-run. The successful label expansion of Soliris in the US coupled with the positive recommendation in the EU should boost the stock. We believe that the current price represents an attractive entry point for long-term investors.  Alexion carries a Zacks #3 Rank (Hold recommendation) in the short-run.

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