Alexion: 2 Global Drug Rollouts, But Upside Already Priced In

Cheryl%20image%20touched%20croppedBy Cheryl Swanson

MOSSEL BAY, SOUTH AFRICA - APRIL 2014: A great white shark breaches from the water in Mossel Bay, South Africa. GREAT white sharks are one of the few species known to regularly poke their heads above the surface to survey the scene. And this huge female is no exception as she rises from the water in front of a cage of stunned divers. The image was captured by British photographer Dale Morris in Mossel Bay, South Africa. PHOTOGRAPH BY Dale Morris / Barcroft Media UK Office, London. T +44 845 370 2233 W www.barcroftmedia.com USA Office, New York City. T +1 212 796 2458 W www.barcroftusa.com Indian Office, Delhi. T +91 11 4053 2429 W www.barcroftindia.com
NAILED THE CALL ON ALEXION–BUT ITS DOWN ENOUGH IT COULD BE  LESS RISKY NOW.

 

 

 

 

 

 

Published in Seeking Alpha Pro

Launching a rare disease drug usually comes with a big payoff for the company’s investors.

So you might think that’s what’s ahead for Alexion Pharmaceutical’s (NASDAQ: ALXN), with the company approaching global launch with not just one, but two ultra-rare disease drugs. On October 23, Alexion nailed FDA approval for rare disease drug Strensiq. The FDA’s final decision on another drug – Kanuma, PDUFA date, December 8 – is likely in the bag.

While Kanuma’s FDA decision was put off in September, the drug seems destined to sail through this time. The drug’s solid clinical trial data earned the oft-tougher nod from the EU commission this fall. Pivotal data published in the New England Journal of Medicine about Kanuma showed it meeting the primary endpoint of alanine aminotransferase (ALT) normalization compared with placebo (31% vs. 7%, p=0.03) as well as six secondary endpoints.

But regulatory approval is simply an open door to an even riskier stage – commercialization. The risks faced in the clinic and with regulatory approval are well known, but the risks of drug launches get ignored. Not a good idea, because launches can fall well short of the rosy expectations created by the companies and the analysts who follow them. That’s particularly true in rare diseases, where you just do not transform drugs into billions of revenue overnight. Rare disease launches require a notoriously slow build-up over time. The company has to scour the planet for patients and handhold them into treatment initiation.

Thus far, Alexion has managed to achieve that with its rare disease drug Soliris. But Alexon’s stock has been on a monster run on the merits of massively profitable cash cow Soliris for a long time – smashing the returns of the S&P over the past ten years. And that’s precisely the problem. The stock is way ahead of itself.

Stock Price Sanity Check

Read entire article at Seeking Alpha here.

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Biotechs With Snap Back Potential

Buying biotechs may seem like jumping without a net these days, but these stocks pack plenty of snap back potential.

Feb 15, 2016 at 10:01AM
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Image courtesy of Creative Commons, Flickr

Yikes! A few weeks into February, and the indiscriminate sell-off in biotech just keeps getting more unnerving.

But here’s the good news. With virtually ever biotech getting dinged, there’s growing upside for investors able to discern the value from the junk in the sector. While a bigger drop could certainly be ahead, a lot of the downside risk is likely baked in for companies with big catalysts ahead.

But what about all the political posturing about drug pricing? Won’t that continue to weigh? Here’s what the market is missing: Proposals to cut drug pricing have been discussed for many years, and the chances of changes materializing in the coming years are slim. In addition, recent high-profile concerns have focused on the pricing for older pharmaceutical drugs — not the kind of breakthrough treatments many biotechs are pursuing.

Biotech stocks are not for the risk-averse, however, since they drop or pop on a whisper. But maintaining a small position in a few well-chosen biotechs also adds a lot more potential upside to a well diversified portfolio. With that in mind, three of our contributors pinpoint stocks that could help boost your portfolio through 2016 and beyond. Head on over to Motley Fool for all three…here’s my pick for Comeback Kid.

An intriquing play in biotechs right now is multiple sclerosis treatment powerhouse Biogen (NASDAQ:BIIB). Several big upcoming catalysts could send this biotech blue chip’s share price sharply upward in 2016 — assuming that all goes well.

 Biogen expects data this year on a treatment with the odd name of LINGO, potentially the first drug to restore nerve damage caused by multiple sclerosis. Admittedly, LINGO is a long shot, and Biogen’s Alzheimer’s drug candidate aducanumab is even riskier. But the possibility that aducanumab could become an approvable therapy seems to be completely written out of Biogen’s price, so any positive results could skyrocket this stock.
Data on two other Alzheimer’s treatments earlier in development could also boost shares. Meanwhile, Biogen’s joint venture with South Korean-based Samsung in biosimilars is starting to look like a real business. The venture notched its first win with a biosimilar version of Amgen‘s rheumatoid arthritis drug Embrel. A second big win could come if EU regulators approve a biosimilar of Johnson & Johnson‘s blockbuster Remicade.
Biogen’s stock was beaten to its knees last year on concerns about slowing sales of its largest revenue driver Tecfidera (a blockbuster multiple sclerosis treatment), but earnings blew past Wall Street estimates in the recent quarter. Management also eased concerns about Tecfidera, saying U.S. demand has stabilized, while sales are growing in Europe. The company announced 11% growth in annual revenues and a significant cash stockpile of $3.4 billion. The size of that war chest gives Biogen ample ammunition for some price-moving acquisitions this year of either companies or drugs.

 

 

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