On Mar 14, 2013, we upgraded
Alexion Pharmaceuticals Inc.
) to Outperform from Neutral based on the company's strong fourth
quarter 2012 results. Moreover, Alexion Pharma has a long-term
earnings growth rate of 28.5%. The stock carries a Zacks Rank #3
(Hold) in the short run.
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Why the Upgrade?
On Feb 14, Alexion Pharma announced impressive fourth-quarter
results. The company's adjusted earnings of 54 cents per share
beat the Zacks Consensus Estimate by 7 cents on the back of
strong sales of Soliris - Alexion's only marketed product. It is
marketed for the paroxysmal nocturnal hemoglobinuria and atypical
hemolytic uremic syndrome indications.
Management expects Soliris to continue performing well.
Consequently, net product sales for 2013 are expected in the
range of $1.490-$1.505 billion significantly above the $1.13
billion recorded in 2012. We too expect Soliris to continue
performing well in 2013. Consequently, we have increased our
revenue estimate for 2013.
Alexion is studying Soliris for additional indications as well,
such as acute humoral rejection, myasthenia gravis and STEC-HUS.
Alexion intends to seek marketing approval for Soliris in the
STEC-HUS indication in the US and the EU in the second half of
2013. Currently, there are no approved treatments for any of
these disorders and the successful development of Soliris for one
or more of these indications will further help expand the market
potential of the drug. Alexion's pipeline also includes asfotase
alfa (hypophosphatasia), ALXN1102/ALXN1103 (hematology), ALXN1007
We are also encouraged by the company's strategy of pursuing
acquisitions/signing deals to expand its pipeline beyond Soliris.
The acquisitions of Taligen Therapeutics, Enobia Pharma and the
purchase of the patents and assets from Orphatec Pharmaceuticals
are aimed towards fulfilling this objective.
Other Stocks That Warrant a Look
Favorably placed stocks in the pharma sector include
Osiris Therapeutics, Inc.
Transcept Pharmaceuticals, Inc.
). All these stocks carry a Zacks Rank #1 (Strong Buy).