|Headquarters||Cheshire, Connecticut, U.S.|
|Max E. Link (Chairman)
Leonard Bell (CEO)
|Revenue||US$ 1151.346 million (2013)
|US$ 528.010 mil (2013)31%|
|US$ 252.895 mil (2013)|
|Total assets||US$ 3.317696 bil (2013)27%|
|Total equity||US$ 2.382079 bil (2013)21%|
Number of employees
|1774 (December 2013)|
Alexion Pharmaceuticals Inc. is an American pharmaceutical company best known for its developement of Soliris, a drug used to treat the rare disorders atypical hemolytic uremic syndrome (aHUS) and paroxysmal nocturnal hemoglobinuria (PNH). The company is also involved in immune system research related to autoimmune diseases. It employs about 2,400 people worldwide.
Alexion Pharmaceuticals was founded in 1992 at Science Park in New Haven, Connecticut by Leonard Bell. Bell would serve as the company's CEO until 2015. In 2000, Alexion moved its headquarters from New Haven to Cheshire, Connecticut. Since 2006, Alexion has been a supporter of Healthcare Research and Quality studies at Duke University for aspirin and Plavix.
Alexion received US Food and Drug Administration (FDA) approval for Soliris in 2007. It was initially approved to treat paroxysmal nocturnal hemoglobinuria, a rare blood disorder. In 2010, there was an outbreak of hemolytic-uremic syndrome caused by Enterohaemorrhagic Escherichia coli (EHEC) in Germany. Soliris was considered as a treatment option due to its effectiveness in treating atypical hemolytic uremic syndrome, an illness similar to the one caused by the EHEC infection. As a result, Alexion's German subsidiary provided an unspecified number of Soliris doses at no charge to physicians who requested it.
On April 4, 2011, Alexion was added to the Nasdaq-100, a group composed of the 100 largest non-financial stocks traded on the Nasdaq; with a market value of USD 8.5 billion it replaced Genzyme Corporation. On September 23, 2011, the FDA officially approved the use of Soliris as a treatment for atypical hemolytic-uremic syndrome in both adults and children. More than half of people with aHUS end up dying of it as a result of damage to vital organs/organ failure (usually involving the kidneys) caused by uncontrolled complement activation. The FDA's decision to grant approval received a positive response from the medical community with the director of Pediatric Nephrology at Atlanta's Children's hospital calling it "the most important advance that has been made for patients and families with this disease".
In April and May 2013, a controversy arose in Belgium when the media revealed that the government had refused to pay for a seven-year-old boy's treatment because Soliris was too expensive. The boy's medicine cost 9,000 euros every two weeks. On May 4, 2013, De Standaard reported that a press relations (PR) agency working for Alexion had helped the boy's parents communicate their story to the press. It was also reported that the parents had believed their benefactor was a Dutch organization for patients, and that the PR agency acted with permission from Alexion. Several politicians stated that the company was attempting to 'blackmail' the government, charges which Alexion denied. By May 7, 2013 an agreement had been reached to reimburse the medicine.
Pharma, the Belgian pharmaceutical industry's association, opened an internal investigation into the affair, for possible breach of the association's ethical standards by Alexion. However, on June 12, Alexion received a court gag order against Pharma, preventing it from communicating its investigation. At the same time, Pharma opened a court case against Alexion Pharma Belgium. The gag order was revoked by the end of September 2013, but the case was still pending in March 2015.
On April 1, 2015, Bell was replaced as CEO by David Hallal.
In 2000, Alexion purchased Proliferon Inc., a San Diego, California based development-stage biopharmaceutical firm, for US$41 million in Alexion stock. Alexion CEO, Leonard Bell, cited Proliferon's ability to produce an "unlimited amount of antibodies" as the reason for the acquisition. At the time Proliferon's annual revenue was about $2.5 million and its assets were valued at $2.1 million. The company has since been renamed Alexion Antibody Technologies Inc.
On December 29, 2011, Alexion acquired Montreal based Enobia Pharma Corp for $610 million upfront and up to another $470 million later, contingent on company sales and regulatory goals. The $610 million includes $300 million in bank debt. Enobia is the developer of asfotase alpha, a drug used to treat the genetic disorder hypophosphatasia.
In May 2015, Alexion announced plans to purchase Synageva BioPharma, a maker of rare disease treatments, for $8.4 billion in a stock-and-cash deal. In the deal, each share of Synageva, which is traded on NASDAQ, will be exchanged for $115 in cash and 0.6581 shares of Alexion stock. The price represented more than a 135% premium over Synageva's market cap at the time. It also represents a valuation of about ten times projected peak sales, double what is typical for the biotech industry. Analysis by The Wall Street Journal suggested the large premium was due to the perceived value of rare disease treatments which usually are very expensive when compared to treatments for more common diseases. Alexion is thus seeking a stronger position in the lucrative rare disease market, and is willing to pay a premium to obtain that position. The rare disease market is seen as desirable because insurers have minimal motive to deny claims (due to small population sizes of patients) and are unable to negotiate better drug prices due to lack of competition.
Alexion said it expects to save $150 million in costs by the end of 2017 by combining with Synageva. It does not expect revenue and earnings per share to increase until 2018. The deal would give Alexion a total of eight drugs in clinical trials, and 30 others in preclinical trials. Synageva's main drug, Kanuma, could receive approval in the United States and Europe as early as the third quarter of 2015. The boards of both companies have approved the merger which is expected to complete in mid-2015. Alexion shares fell 8.9% the day after the deal was announced.
Alexion has employed a strategy of developing drugs to combat rare diseases. Since the targeted user base is small for such drugs, clinical drugs tend to be quicker and cheaper than those for mass market drugs. Additionally, big pharmaceutical companies have tended to ignore these markets, creating a niche with minimal competition for Alexion. Insurance companies have generally been willing to pay high prices for such drugs; since few of their customers need the drugs, a high price does not significantly impact the insurance companies outlays.
Alexion's first drug, Soliris, used to treat the rare disorders atypical hemolytic uremic syndrome (aHUS) and Paroxysmal nocturnal hemoglobinuria (PNH). It has been approved for use in Canada, the European Union, Japan, and the United States; however, availability in Canada is limited. In Canada, access to the drug is mostly through private clinics; groups such as the Canadian Association of PNH Patients are lobbying to change that. The drug costs roughly $450,000 a year, and is considered the world's most expensive drug.
As of May 2015, Alexion is currently seeking approval of its second drug, Strensiq. It will be used to treat mucopolysaccharidosis IIIB, a rare metabolic disorder. Kanuma, which Alexion stands to acquire in its acquisition of Synageva, will be used to treat Lysosomal Acid Lipase Deficiency, a fatal genetic disorder that cause fatty material to build up in blood vessel walls, the liver, and other tissues. Alexion estimates that the drug could eventually have annual sales of more than $1 billion.
In 2013, 36% Alexion's sales originated in the US, down from 37% the previous year; 33% came from Europe, down from 35%; Japan accounted for just over 10%. Revenue was impacted by higher unit volumes for Soliris (up 40%), and a decreased average price related to rebates in Europe. Acquisition related costs fell significantly from $22 million to just $5 million. R&D spending reached a record high of $317 million in 2013 up 83% from the previous year.
When Soliris was first approved, peak annual sales were estimated at $150 million. However, by September 2013 quarterly sales of Soliris topped $400 million. Sales during the first quarter of 2015 were just over US$600 million, and are still on the rise.
Before the Synageva purchase announcement, Alexion was valued at $34 billion. The stock is up roughly 800% in the last five years and is currently trading at 46 times estimated earnings. Due to the niche nature of its market and the high cost of Soliris, the company has enjoyed a high profit margin.
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