Alexion: Hoping to Be Big in Japan

Recently, Alexion Pharmaceuticals (NASDAQ:ALXN) received approval from Japan’s Ministry of Health, Labour and Welfare (MHLW) for its New Drug Application (NDA) of Soliris (eculizumab). The company was seeking approval for Soliris to treat patients with paroxysmal nocturnal hemoglobinuria (PNH). Alexion expects to launch the drug in Japan by year-end.

PNH is a rare genetic blood disorder characterized by chronic red blood cell destruction, or hemolysis. Currently, Soliris is the only drug available for the treatment of PNH patients. Soliris received orphan drug status from the MHLW in 2009 and was approved under a priority review.

In addition to the US, Soliris is approved in the European Union, Canada, Latin America and Australia. The drug received marketing approval in South Korea and Switzerland in 2010. Soliris has been granted orphan drug designation for the treatment of PNH, which means Alexion has market exclusivity for the drug for seven years in the US and ten years in Europe.

We believe the approval of Soliris in Japan will boost its sales when it is launched. Soliris is the only US Food and Drug Administration (FDA) approved product of Alexion. The drug recorded sales of $386.8 million (US–$159,829; ex US–$226,971) in 2009, a 49% rise over 2008.

Alexion is exploring the use of Soliris in other indications as well. These include atypical hemolytic uremic syndrome, an inherited disorder frequently leading to kidney failure; kidney transplant patients who have a high risk of organ rejection; dense deposit disease, a rare and severe kidney disorder; myasthenia gravis, a rare and severe neuromuscular disorder; multifocal motor neuropathy, a rare and severe autoimmune disorder.

Currently, there are no approved treatments for any of these disorders and the successful development of Soliris for one or more of these indications will further help expand the market potential for this product. Strong Soliris sales have helped the company achieve profitability since the second quarter of 2008. We are Neutral on the stock.