Alexion Pharmaceuticals Inc. is an American pharmaceutical company best known for its development of Soliris, a drug used to treat the rare disorders atypical hemolytic uremic syndrome (aHUS) and paroxysmal nocturnal hemoglobinuria (PNH). The company is also involved in immune system research related to autoimmune diseases. It employs around 2,400 people worldwide. In February 2016, the company held the dedication ceremony for its new headquarters in New Haven, Connecticut, not far from the company's starting point in the same city.
In September 2017, Alexion announced it would be moving its headquarters to Boston, Massachusetts in mid-2018.
Alexion Pharmaceuticals was founded in 1992 at Science Park in New Haven, Connecticut by Steven Squinto and Leonard Bell. Bell served as the company's CEO until 2015. In 2000, Alexion moved its headquarters from New Haven to Cheshire, Connecticut. Alexion moved back to New Haven following the completion of New Haven's Downtown Crossing project in December 2015.
Since 2006, Alexion has been a supporter of healthcare research and quality studies at Duke University for aspirin and Clopidogrel (trade name Plavix).
Alexion received U.S. Food and Drug Administration (FDA) approval for Soliris in 2007. It was initially approved to treat paroxysmal nocturnal hemoglobinuria, a rare blood disorder. In 2010, there was an outbreak of hemolytic-uremic syndrome caused by Enterohaemorrhagic Escherichia coli (EHEC) in Germany. Soliris was considered a treatment option because of its effectiveness in treating Atypical hemolytic uremic syndrome, an illness similar to the one caused by the EHEC infection.
In April 2011, Alexion was added to the NASDAQ-100, a group composed of the 100 largest non-financial stocks traded on the NASDAQ; with a market value of USD 8.5 billion it replaced Genzyme Corporation.
In April 2015, Bell was replaced as CEO by David Hallal. In 2016, the company became a member of the Pharmaceutical Research and Manufacturers of America (PhRMA).
In December 2016, Alexion's board of directors announced new leadership. David Brennan, a current board member, became interim CEO. David Anderson, formerly the CFO of Honeywell, was appointed CFO, replacing Vikas Sinha. In March 2017, Alexion named Ludwig N. Hantson as its new CEO.
In 2000, Alexion purchased Proliferon Inc., a San Diego, California-based development-stage biopharmaceutical firm, for US$41 million in Alexion stock. Alexion CEO, Leonard Bell, cited Proliferon's ability to produce an "unlimited amount of antibodies" as the reason for the acquisition. At the time Proliferon's annual revenue was about $2.5 million and its assets were valued at $2.1 million. The company has since been renamed Alexion Antibody Technologies Inc.
In December 2011, Alexion acquired Montreal-based Enobia Pharma Corp, the developer of asfotase alpha, a drug used to treat the genetic disorder hypophosphatasia.
In May 2015, Alexion announced plans to purchase the Lexington firm Synageva BioPharma, a maker of rare disease treatments, in a $8.4 billion stock-and-cash deal. The price represented more than a 135% premium over Synageva's market cap at the time. It also represented a valuation of about ten times projected peak sales, double what is typical for the biotech industry.
The following is an illustration of the company's mergers, acquisitions, spin-offs and historical predecessors:
(Acq 2000, restructured into Alexion Antibody Technologies Inc)
Enobia Pharma Corp
As of 2017 Alexion Pharmaceuticals shares are mainly held by institutional investors (Fidelity Investments, T. Rowe Price, BlackRock and others)
Alexion has employed a strategy of developing drugs to combat rare diseases. Since the targeted user base is small for such drugs, clinical drugs tend to be quicker and cheaper than those for mass market drugs. Additionally, big pharmaceutical companies have tended to ignore these markets, creating a niche with minimal competition for Alexion. Insurance companies have generally been willing to pay high prices for such drugs; since few of their customers need the drugs, a high price does not significantly impact the insurance companies' outlays. "The success of specialty drugs for rare diseases comes at a time when the traditional drug business of selling medicines to the masses is in decline...Specialty drugs have gotten more expensive than anyone imagined."
Alexion's first drug, Soliris, first launched in 2007, used to treat the rare disorders atypical hemolytic uremic syndrome (aHUS) and Paroxysmal nocturnal hemoglobinuria (PNH). It has been approved for use in Canada, the European Union, Japan, and the United States; however, availability in Canada is limited. In Canada, access to the drug is mostly through private clinics; groups such as the Canadian Association of PNH Patients are lobbying to change that. The drug costs roughly $450,000 a year, and is considered the world's most expensive drug. The price of the drug is so high that very few individuals can pay the price. As a result, Alexion hires public relations firms to help families institute campaigns to pressure their governments to pay for the drug. Alexion is putting pressure on to governments to receive their payments from the public purse. The prices charged have a very high margin above the cost price. In addition, much of the research for the development of Soliris originates from publicly funded universities. There is an ethical question as to the pricing of the drug and the ethics of the drug manufacturer. Alexion is well on the way to developing a second very high price and high margined drug.
In September 2011, the FDA officially approved the use of Soliris as a treatment for atypical hemolytic-uremic syndrome in both adults and children. More than half of people with aHUS end up dying of it as a result of damage to vital organs/organ failure (usually involving the kidneys) caused by uncontrolled complement activation. The FDA's decision to grant approval received a positive response from the medical community with the director of Pediatric Nephrology at Atlanta's Children's hospital calling it "the most important advance that has been made for patients and families with this disease".
By 2010 Soliris was considered to be the most expensive drug in the world. It costs £340,200 per year for treatment in the UK and $500,000 a year in Canada. and US$409,500 a year in the United States (2010). In the case of the rarest diseases that afflict fewer than 10,000 people, biotech companies who own the only approved drugs to treat those diseases "can charge pretty much whatever they want." "Before testing Soliris for PNH, Alexion tested the drug for rheumatoid arthritis, which afflicts 1 million Americans. The trials failed. But if it had worked for arthritis, Alexion would likely have had to charge a much lower price for this use, as it would have to compete against drugs that cost a mere $20,000." Alexion started selling Soliris in 2008 making $295 million in 2007 with its stock price rising to 130% in 2010.
In April and May 2013, a controversy arose in Belgium when the media revealed that the government had refused to pay for a seven-year-old boy's treatment because Soliris was too expensive. The boy's medicine cost 9,000 euros every two weeks. On May 4, 2013, De Standaard reported that a press relations (PR) agency working for Alexion had helped the boy's parents communicate their story to the press. It was also reported that the parents had believed their benefactor was a Dutch organization for patients, and that the PR agency acted with permission from Alexion. Several politicians stated that the company was attempting to 'blackmail' the government, charges which Alexion denied. By May 7, 2013 an agreement had been reached to reimburse the medicine.
Pharma, the Belgian pharmaceutical industry's association, opened an internal investigation into the affair, for possible breach of the association's ethical standards by Alexion. However, on June 12, Alexion received a court gag order against Pharma, preventing it from communicating its investigation. At the same time, Pharma opened a court case against Alexion Pharma Belgium. The gag order was revoked by the end of September 2013, but the case was still pending in March 2015.
In October 2017 the FDA approved the use of Soliris to treat adult patients with generalized myasthenia gravis (gMG). In November 2017 the company received a patent for Soliris from the Japanese Patent Office.
In October 2015, Alexion's second drug, Strensiq (asfotase alfa), was approved by the US FDA. It is used to treat hypophosphatasia, a rare metabolic disorder.
Kanuma, which Alexion acquired in its acquisition of Synageva, was approved in 2015 to treat lysosomal acid lipase deficiency, a fatal genetic disorder that cause fatty material to build up in blood vessel walls, the liver, and other tissues. Alexion estimates that the drug could eventually have annual sales of more than $1 billion.
In 2013, 36% Alexion's sales originated in the US, down from 37% the previous year; 33% came from Europe, down from 35%; Japan accounted for just over 10%. Revenue was impacted by higher unit volumes for Soliris (up 40%), and a decreased average price related to rebates in Europe. Acquisition related costs fell significantly from $22 million to just $5 million. R&D spending reached a record high of $317 million in 2013 up 83% from the previous year.
When Soliris was first approved, peak annual sales were estimated at $150 million. However, by September 2013 quarterly sales of Soliris topped $400 million. Sales during the first quarter of 2015 were just over US$600 million, and are still on the rise.
Before the Synageva purchase announcement, Alexion was valued at $34 billion. The stock is up roughly 800% in the last five years and is currently trading at 46 times estimated earnings. Due to the niche nature of its market and the high cost of Soliris, the company has enjoyed a high profit margin.