We are upgrading Alexion Pharmaceuticals (ALXN) to Outperform from Neutral following positive data presented for Soliris for an additional indication – generalized myasthenia gravis.
Data from the randomized, double-blind, placebo-controlled, cross-over study were presented at the annual scientific session of the Myasthenia Gravis Foundation of America, Inc. in September 2011. The patients evaluated in the phase II study were suffering from moderate to severe muscle weakness despite being treated with immunosuppressants. The patients were divided equally into two groups – one receiving Soliris, the other placebo.
Data from the study revealed strong signals regarding improvement of the disease in patients in the Soliris arm. Improvement was measured through the Quantitative Myasthenia Gravis disease severity score (QMG score).
Moreover, we are encouraged by Alexion’s efforts to expand the label of the drug into the Atypical hemolytic uremic syndrome (aHUS) indication. The disorder often leads to heart attack, stroke or kidney failure which can even prove to be fatal. With the US Food and Drug Administration granting priority review status to Soliris for the aHUS indication, Alexion could be in a position to launch the product for this indication by year end. Alexion has also sought approval for marketing Soliris for aHUS in the European Union.
We believe that the label expansion efforts are very encouraging as currently Soliris revenues are being generated entirely from the paroxysmal nocturnal hemoglobinuria indication – a rare genetic blood disorder indication. Approval of Soliris for new indications will not only expand its market, but will also augment Alexion’s top line.
We believe that the current price represents an attractive entry point for long-term investors and hence upgrade the stock to Outperform.
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