Alexion's (ALXN) Soliris' Label Expansion Approved In Europe

Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) announced that the European Commission (EC) approved a label expansion of lead drug Soliris.

The European Commission expanded the indication for Soliris to include the treatment of refractory generalized myasthenia gravis (gMG) in adults who are anti-acetylcholine receptor (AChR) antibody-positive.

We note that Soliris is approved for two severe and ultra-rare disorders resulting from chronic uncontrolled activation of the complement component of the immune system – paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS).

In order to increase the commercial potential of the drug further, Alexion is working on expanding Soliris’ label into additional indications. Alexion has aslo filed regulatory application to the FDA for expanding the use of Soliris for the treatment of refractory gMG in patients who are anti-acetylcholine receptor antibody-positive. The FDA accepted the supplemental Biologics License Application (sBLA) and set a Prescription Drug User Fee Act (PDUFA) date of Oct 23.

A potential label expansion in the U.S. will boost sales further. Soliris will be launched for this new indication initially in Germany while Alexion is evaluating launches in additional EU countries.

Alexion’s stock price has increased 9.1%, outperforming the industry’s gain of 5.3%.

Additionally, a phase III study (PREVENT) on Soliris in patients with relapsing neuromyelitis optica spectrum disorder is ongoing with enrolment being expected to be completed in 2017 and data expected in 2018. Label expansion into additional indications will give Soliris access to a higher patient population and increase the commercial potential of the drug significantly.

We note that Soliris has received Orphan Drug Designation (ODD) for the treatment of patients with MG in the U.S. and EU, and for the treatment of patients with refractory gMG in Japan.

We expect growth at Alexion to continue being driven by Soliris. Other new products – Strensiq and Kanuma – are doing well and are expected to boost revenues. However, Soliris quarter-to-quarter revenue growth ($70 million - $100 million) will be impacted by the enrolment ramp-up of trials.

The company is expecting Soliris revenues to be lower in the second half of the year due to an accelerating impact from the ALXN1210 trials. In addition, pricing will impact sales by 1%.

Zacks Rank & Stocks to Consider

Alexion currently carries a Zacks Rank #1 (Strong Buy).

Other top-ranked stocks worth considering in the healthcare sector include Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) , Gilead Sciences, Inc. (NASDAQ:GILD) and Aduro Biotech, Inc. (NASDAQ:ADRO) . While Regeneron sport a Zacks Rank #1, Gilead Sciences and Aduro carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Regeneron’s earnings per share estimates have increased from $10.52 to $13.81 for 2017 and from $12.10 to $14.54 for 2018 over the last 30 days. The company pulled off positive earnings surprises in two of the trailing four quarters, with an average beat of 6.29%.

Gilead’s earnings per share estimates increased from $7.98 to $8.53 for 2017, over the last 30 days. The company delivered positive earnings surprises in three of the trailing four quarters, with an average beat of 8.18%.

Aduro Biotech’s loss per share estimates narrowed from $1.46 to $1.32 for 2017 and from $1.41 to $1.24 over the last 30 days. The company delivered positive surprises in two of the trailing four quarters with an average beat of 2.53%.

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