William Blair & Company initiated research coverage of Alexion Pharmaceuticals, Inc. (Nasdaq:ALXN) ($36.29) with an Outperform rating. Alexion’s primary focus is the development of Soliris (eculizumab) to treat paroxysmal nocturnal hemoglobinuria (PNH), a severe, rare disease that leads to mortality in about 50% of patients within 15 years of diagnosis.
Analyst John Sonnier estimated that the company would generate revenue of $33 million in 2007 and $112.8 million in 2008.
“The key driver of shareholder value for Alexion is the company’s lead compound, Soliris, which is under review at the FDA and EMEA,” Sonnier said. “Given the positive pivotal clinical program (TRIUMPH) and interim data from the SHEPHERD study presented at the American Society of Hematology meeting in 2006, we believe the company is well positioned to receive approval from the FDA, with an action date of March 20, and the EMEA in the near term.”
“We believe price performance will be driven by approval of Soliris and by potential upside to Street estimates in the pricing of Soliris and the total addressable patient population,” he added. “Given the size of the ultra-orphan PNH market, which we estimate to be 6,000 to 9,000 people worldwide, we expect pricing to be a key part of the Soliris story in the near term. With strong clinical data in a deadly disease with few other clinical alternatives, we believe the company will be able to price Soliris along the lines of treatments for other rare genetic diseases—such as Cerezyme, to treat Gaucher disease—that command more than $200,000 per year of treatment.”
William Blair & Company, L.L.C. has received compensation for investment banking services from the company within the past 12 months, or expects to receive or intends to seek compensation for investment banking services in the next 3 months.
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