Alexion Pharmaceuticals Reimbursement Discussions With the French Government Conclude


Before the markets opened on Monday, Alexion announced the outcome of the reimbursement negotiations with the French government and consequently increased 2014 financial guidance.

Alexion announced that previous Soliris orders in France in the amount of $88 million net product sales will be recorded in the first quarter of 2014. Management also said the arrangement’s conclusion and decision will affect future net product sales of Soliris. Based on the incremental positive impact to sales, we have updated our estimates to come more in line with operating trends and guidance.

Alexion expects the arrangement with the French government to affect revenues and EPS, and as a result, management has increased its financial guidance for 2014. Accordingly, the 2014 net product sales guidance is increased to $2.15 billion-$2.17 billion from $2.00 billion- $2.05 billion, and non-GAAP EPS guidance is increased to $4.37-$4.47 from $3.70 to $3.80.

The company continues to focus clinical development on its core strength in severe, ultra-rare, life-threatening diseases, with 10 key clinical programs that could lead to 7 approvals between 2014 and 2018. We highlight regulatory submissions with asfotase alfa in hypophosphatasia in the United States and Europe this year, which could become Alexion’s second commercial franchise. We see a nice mix of early- and late-stage compounds in development at Alexion that offer near- and longterm growth potential and outline our view on upcoming pipeline catalysts in exhibit 2, on page 2.

Alexion finished the fourth quarter of 2013 with just over $1.5 billion in cash. Given the commercial momentum with Soliris, the growing clinical pipeline, and the company’s solid cash position, we maintain our Outperform rating on Alexion shares.

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