We are maintaining our Outperform recommendation on Alexion Pharmaceuticals, Inc. (ALXN) following its impressive showing in the third quarter of 2011.
Alexion's third quarter 2011 adjusted earnings of $0.32 per share breezed past the Zacks Consensus Estimate by $0.09 and the year-ago adjusted earnings by $0.11. Results were driven by increased revenues thanks to the strong performance of Soliris, Alexion’s sole marketed product. Following strong third quarter results, Alexion upped its guidance for 2011. (Read our full coverage of the earnings report at: Soliris Drives Alexion, View Upped ).
We are also impressed by the successful label expansion of Soliris into the atypical hemolytic uremic syndrome (aHUS) indication- an ultra-rare, genetic disorder- in the US. The disorder often leads to heart attacks, stroke or kidney failure which can be fatal. Soliris is the first and only drug to be cleared in the US for the aHUS indication. The US Food and Drug Administration (FDA) approved Soliris for treating children and adults suffering from aHUS. The successful US label expansion of Soliris, Alexion’s sole marketed product, is a major achievement for the company and should boost its top line significantly.
Moreover, the label expansion effort of Alexion into the aHUS indication in the EU is on track with the European Committee for Medicinal Products for Human Use (CHMP) recommending the approval of Soliris for the indication in September 2011. Alexion expects the European Commission to reach a final decision regarding the matter by year end. The application, seeking EU approval to market Soliris for the additional indication, was filed by Alexion in April 2011.
Currently, the markets in the EU are devoid of any therapy for treating aHUS. Consequently, if Soliris is approved in the EU then it would serve a market, which needs such a drug.
The string of good news has boosted the stock. We expect Alexion to continue performing well. Consequently, we continue to believe that the current price represents an attractive entry point for long-term investors.
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