Alexion Pharmaceuticals, Inc. (ALXN)

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Alexion Pharmaceuticals, Inc. (ALXN)

March 12, 2013 10:45 am ET


Vikas Sinha - Chief Financial Officer and Executive Vice President


Ying Huang - Barclays Capital, Research Division


Ying Huang - Barclays Capital, Research Division

Everyone, thanks for joining us, and also for those who joined us on the webcast. The next company presenting is Alexion Pharmaceuticals. And -- oh, by the way, my name is Ying Huang, I'm the U.S. Biotech Analyst here at Barclays. So it gives me a lot pleasure to introduce my friend Vikas Sinha, who is the EVP and CFO of Alexion Pharmaceuticals. Obviously, Alexion has changed a lot since I first covered them a few years back. Now last year, actually marks the first year, their new product, Soliris, actually crossed $1 billion in global sales. So it's officially a blockbuster product in the therapeutic space.

So with that, let me just turn the podium to Vikas.

Vikas Sinha

Good morning and thanks, Ying, for inviting us to Barclays Conference in this beautiful Miami, and thanks for your kind words. I would be making some forward-looking statements today and would really recommend you to look -- review the risk factors that are outlined in our 10-Ks and 10-Qs.

Just to give a very quick highlight on Alexion, we are focused on innovation and commercialization of life-transforming therapies for patients with severe and life-threatening disorders that are ultra rare. Soliris is our first commercial product, and it is the first and only approved complement inhibitor in the world. Our first indication, PNH, is approved in our market and in 40 countries, and it's growing its core operations in U.S., Europe and Japan. As we move more into these countries, we're going deeper into our penetration.

Our second indication, aHUS, atypical hemolytic uremic syndrome, has been approved in U.S. and EU in 2011. U.S. launch has -- it's more than a year underway now, and launch is, in EU, is being expected throughout 2013.

Now growth in severe and ultra rare disorders beyond PNH and aHUS is 2 tracks. First, we are taking Soliris pipeline into more indications in rare and life-threatening disorders. We have 5 lead programs, STEC-HUS, NMO, myasthenia gravis, kidney transplant rejection and delayed graph function. I'll talk about it in few slides later. Additional indications are also under evaluation in transplant nephrology and hematology area.

Beyond Soliris, we have 4 additional highly innovative therapeutic candidates. Asfotase alfa, which we acquired through the acquisition of Enobia earlier last year. It's for a disease called hypophosphatasia. It is in advanced clinical studies now. cPMP replacement therapy is for molybdenum cofactor deficiency type A. Currently in preclinical, this was also acquired from a company in Germany.

ALXN1102 and 1103 is a unique inhibitors of alternate complement pathway. We acquired this from Taligen Therapeutics. And ALXN1107 is internally built, novel anti-inflammatory antibody, which is currently in Phase I studies, we'll talk more about this as we go forward.

We are profitable and we are growing our company significantly as we move forward, which also provides us significant operating leverage to the company. We have 1,400 employees globally, and we are selling in 50 countries.

Just in terms of financials. From 2011 to 2012, our topline grew by 45% to about $1.1 billion in sales. On the leverage side, we can see that on the profitability, our non-GAAP net income increased by 60% compared to 2011.

When we look at the regional mix, U.S. did 35% of the sales, Europe was 37%, out of the blue was 13% and Asia Pacific, which is mainly Japan, now has around 14% of the total overall pie. What is most important to look at is the U.S., with the launch of aHUS, full year launch, grew by 52% in 2012. And when we compare that with EU, which was only PNH growth, grew by 27%. Asia Pacific grew by 40%, mainly driven by Japan. And out of the blue, which is Latin America, Middle East and Eastern Europe, Russia, grew by 141%. Of course, one of the big growth drivers in 2012.

So reimbursement pieces has been supported by the life-threatening severity of PNH and aHUS. The clinical benefits that Soliris brings to the disease and a very small number of patients are needing this treatment.

Let's talk about PNH and aHUS, the key milestones in 2013 and subsequent years. It's -- in terms of PNH, it's the first indication addressed by Soliris. It's an acquired genetic complement inhibited deficiency affecting blood cells. It's defined by the presence of hemolysis. Patients suffer progressive disease burden and/or vital organ damage in this disease, and approximately 25% of patients die within 5 years of diagnosis.

When we look at aHUS, it is a genetic complement inhibitor unlike PNH, which is an acquired genetic deficiency. And in aHUS, it leads to clotting in small blood vessels throughout the body. Progressive and sudden damage happens to the vital organs, resulting in stroke, heart attack and renal failure. More than 50% of the patients die or have kidney failure or require dialysis within 1 year of diagnosis. So we see the sense of urgency in aHUS much higher in terms of a need for treatment. And Soliris is a targeted C5 complement inhibitor addressing both these disorders. All patients responded to Soliris in registration studies. And the studied PNH patients have subsequently been published to achieve normal longevity on long-term studies, while they have been on Soliris, to have achieved a normal life.

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