A Good Year for Alexion? The Proof Is in the Pipeline
Revenue expectations in 2016 and 2017
During 2015, Alexion Pharmaceuticals’ (ALXN) revenue increased by 21%. The main driver for the growth was the volume of sales that came from a 29% increased demand for Soliris. Foreign exchange dragged the revenue downward, however, causing an impact of -8%, followed by a weakening of the euro, the Japanese yen, and the Russian ruble.
During 2016 and 2017, Alexion revenues are expected to be ~$3.1 billion and ~$3.8 billion, respectively. By 2018, the company plans to reach an operating margin of 48%–49%.
Soliris: Alexion’s hottest product
The company is thus following a label expansion strategy for its key products, particularly Soliris. (For more information on label expansion of Soliris, please refer to “Alexion Pharmaceuticals Expands Soliris Labels.”) As a major revenue contributor for Alexion, Soliris is the only drug approved for paroxysmal nocturnal hemoglobinuria and aHUS (atypical haemolytic uremic syndrome). But the drug still appears to have the majority of its growth ahead, because Soliris is the first line of treatment for aHUS.
Update on Soliris label expansion
The clinical development program of Soliris under neurology includes indications such as MG (myasthenia gravis) and NMOSD (neuromyelitis optica spectrum disorder), but the transplant trial includes DGF (delayed kidney transplant graft function), antibody-mediated rejection, and presensitized renal transplant.
The transplant rejection trial includes two cases wherein the patient receives kidneys from deceased donors, and another case where he receives kidneys from living donors. For the MG registration trial, the data is expected by mid of 2016, whereas NMOSD registration trial-enrollment would finish in 2016. The DGF registration trial data is expected in the second half of 2016.
Other companies that are trying to expand labels of their key products are AbbVie (ABBV), Gilead Sciences (GILD), and Regeneron (REGN). To get exposure to Alexion Pharmaceuticals while controlling excessive company-specific risks, investors can choose to invest in the iShares Nasdaq Biotechnology ETF (IBB). Alexion accounts for about 3.3% of IBB’s total holdings.
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