Zacks_Analysts' Blog : Speedy Review for ALXN's Soliris - Analyst Blog

Alexion Pharmaceuticals Inc. (ALXN) received a boost recently when the US Food and Drug Administration (FDA) announced it will conduct a faster review of Soliris for the treatment of atypical hemolytic uremic syndrome (aHUS). aHUS is a rare disorder that often leads to heart attack, stroke or kidney failure which can even prove to be fatal.

The FDA granted priority review status to the supplemental Biologics License Application (sBLA) filed by Alexion in April 2011 for the aHUS indication. During the same month, the company also filed a marketing application in the EU. If approved, Alexion could launch Soliris for aHUS in the US in the fourth quarter of 2011.

We note that Soliris is already available in the US for treating patients suffering from paroxysmal nocturnal hemoglobinuria (PNH), a rare genetic blood disorder. Along with the US, Soliris is approved for PNH in the EU, Japan and many other countries. However, Alexion’s efforts to expand the drug’s label are encouraging since the sole dependence on Soliris, only for PNH, is risky.

Priority review status is granted to drugs for treatments where there is a significant unmet clinical need. We note that the market for aHUS has such a potential as patients suffering from the disorder have limited treatment options. Approximately 60% of patients with aHUS require a kidney transplant or a dialysis. Those who receive a kidney transplant continue facing complications and, in more than 90% of these patients, the donor kidney fails. Accordingly, Soliris can leverage the unmet demand for the product thus gaining market share.

Approval for marketing Soliris in the EU and the US has been sought on the basis of encouraging data from two mid-stage studies. The 26-week studies evaluated Soliris for treating adults and adolescents suffering from aHUS. Both studies met the primary endpoints with statistical significance. Final data from the studies is expected to be presented at the European Hematology Association (EHA) Congress later this month.

Alexion Pharma is also studying Soliris in patients undergoing kidney transplantation, having a high risk of organ rejection. The condition is referred to as acute humoral rejection (AHR).

Our Recommendation

Currently, we have a Neutral stance on Alexion. The stock carries a Zacks #3 Rank (short-term Hold recommendation).

We believe that Alexion’s future is tied to Soliris. Approval of the drug in additional markets should help drive sales in the coming quarters. Alexion’s efforts to expand the label of Soliris are also encouraging. We, however, remain concerned about Alexion’s dependence on a single product for growth. Given the absence of any late-stage pipeline candidate, we are concerned about the company’s long-term growth prospects.

We prefer to remain on the sidelines until more visibility is obtained regarding the pipeline development at Alexion and retain our Neutral stance on the stock.