We are maintaining our Neutral recommendation on Alexion Pharmaceuticals (ALXN) with a target price of $102.
Alexion Pharmaceuticals, based in Cheshire, Connecticut, was formed in 1992. The company focuses on a strong scientific and product development base for the development of novel antibody therapeutics that target the treatment of patients with a wide array of severe disease states, including autoimmune and cardiovascular disorders, inflammation and cancer.
Alexion delivered a strong performance in the fourth quarter of 2010. Alexion Pharma’s fourth quarter earnings (excluding special items but including stock-based compensation) of $0.43 per share surpassed the Zacks Consensus Estimate by $0.01 and the year-ago earnings by $0.20. Earnings in the quarter benefited from an increase in revenues.
(Read our full coverage on this earnings report Strong Quarter at Alexion.)
The main growth driver at Alexion is Soliris which is marketed for the treatment of paroxysmal nocturnal hemoglobinuria (PNH), a rare genetic blood disorder. We note that strong Soliris sales have helped the company achieve profitability since the second quarter of 2008.
Soliris is also being developed for other indications. These include atypical hemolytic uremic syndrome, a rare disorder that can lead to kidney failure or death; dense deposit disease, a rare and severe kidney disorder; myasthenia gravis, a rare and severe neuromuscular disorder; multifocal motor neuropathy, a rare and severe autoimmune disorder.
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 boost the top line at Alexion.
However, we 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.
ALEXION PHARMA (ALXN): Free Stock Analysis Report
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