FBR Capital Starts Alexion Pharmaceuticals (ALXN) at Underperform; Sees 37% Downside
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FBR Capital initiates coverage on Alexion Pharmaceuticals (NASDAQ: ALXN) with a Underperform rating and a price target of $82.00, suggesting 37% downside.
Analyst Christopher James commented, "We are initiating coverage of Alexion Pharmaceuticals, Inc. (ALXN) with an Underperform rating and a 12-month price target of $82 per share. Alexion, a recognized pioneering biotechnology company, focuses on discovering drugs for patients with ultra-rare disorders. The franchise consists of Soliris (eculizumab), which is the first therapeutic approved for the treatment of both the blood disease paroxysmal nocturnal hemoglobinuria (PNH) and a form of anemia, atypical hemolytic uremic syndrome (aHUS); Strensiq for the treatment of the bone disease hypophosphatasia (HPP); and Kanuma for the treatment of the enzyme deficiency lysosomal acid lipase deficiency (LAL-D). Despite its strong penetration into the ultra-rare orphan drug market and its relatively healthy pipeline, we believe ALXN is currently overvalued at a market capitalization of approximately $29B. While we are bullish on the overall rare disease space, we think ALXN shares are overpriced for the following reasons: (1) Alexion faces a competitive near-term landscape, particularly with Alnylam's ALN-CC5, albeit indirectly; (2) with the recent failed study with eculizumab in refractory generalized myasthenia gravis (gMG), we do not see significant near-term expansion into additional indications; and (3) we see possible additional pressures from pricing and biosimilars, including an Amgen biosimilar product in development."
Shares of Alexion Pharmaceuticals closed at $126.79 yesterday.
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