Alexion Pharmaceuticals (ALXN) Q4 2016 Results - Earnings Call Transcript

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Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) Q4 2016 Earnings Call February 16, 2017 10:00 AM ET

Executives

Elena H. Ridloff - Alexion Pharmaceuticals, Inc.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

David John Anderson - Alexion Pharmaceuticals, Inc.

Carsten Thiel - Alexion Pharmaceuticals, Inc.

Martin MacKay - Alexion Pharmaceuticals, Inc.

Analysts

Eric Schmidt - Cowen & Co. LLC

Anupam Rama - JPMorgan Securities LLC

Ying Huang - Bank of America Merrill Lynch

Laura Chico - Raymond James & Associates, Inc.

Matthew K. Harrison - Morgan Stanley & Co. LLC

Alethia Young - Credit Suisse Securities (NYSE:USA) LLC

Terence Flynn - Goldman Sachs & Co.

Robyn Karnauskas - Citigroup Global Markets, Inc.

Geoffrey C. Meacham - Barclays Capital, Inc.

Bradley P. Canino - Leerink Partners LLC

Yatin Suneja - SunTrust Robinson Humphrey, Inc.

Andrew Peters - Deutsche Bank Securities, Inc.

Operator

Please stand by, we're about to begin. Good morning and welcome to the Alexion Pharmaceuticals Incorporated Fourth Quarter and Full Year 2016 Conference Call. Today's call is being recorded. For opening remarks and introductions, I would now like to turn the call over to Elena Ridloff, Vice President Investor Relations. Go ahead, ma'am.

Elena H. Ridloff - Alexion Pharmaceuticals, Inc.

Thank you, Cody. Good morning, and thank you for joining us on today's call to discuss Alexion's performance for the fourth quarter and full year 2016, and our plans for 2017. Today's call will be led by David Brennan, our Interim CEO. David will start the call with an overview of our global performance, and will be joined by Dave Anderson, our Chief Financial Officer; and Carsten Thiel, our Chief Commercial Officer; as well as Martin MacKay, our Global Head of R&D.

You can access the webcast slides that will be presented on this call by going to the Events section of our Investor Relations page on our website.

Before we begin, I would like to point out that we will be making forward-looking statements, and these statements involve certain risks and uncertainties that could cause our actual results to differ materially. Please take a look at the risk factors discussed in our SEC filings for additional detail. These forward-looking statements apply only as of today and we undertake no duty to update any of these statements after the call.

I'd also like to remind you that we will be using non-GAAP financial measures, which we believe provide useful information for understanding of our ongoing business performance. Reconciliations of our financial results and financial guidance are included in our press release. These non-GAAP financial measures should be considered in addition to, but not a substitute for our GAAP results. Thank you. David?

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Thanks, Elena. In 2016, the Alexion team advanced our global leadership in rare diseases by serving more patients with Soliris, Strensiq, and Kanuma. We progressed our pipeline to drive further innovation for patients with rare and devastating diseases, and we delivered another year of solid financial performance.

Let's take a look at some of our key accomplishments on slide six. First, I'm pleased to report that for the full year of 2016 we delivered over $3 billion in total revenues, representing an 18% increase over 2015, and delivered non-GAAP EPS of $4.62. Dave will discuss the financial details for the full year as well as the fourth quarter.

Second, we delivered strong volume growth for Soliris and continue to see that the majority of the opportunity to serve patients with PNH and aHUS with our complement franchise is ahead of us. And third, we had our first full year of launch with our two metabolic therapies. The Strensiq launch is off to a great start, and we expect it to continue to be a strong additional driver of growth in 2017 and beyond. For Kanuma, we continue to apply our expertise in ultra-rare diseases to identify more patients faster through our enhanced disease awareness and diagnostic initiatives.

Turning now to R&D, our team made significant progress in advancing our lead programs in Q4. We're particularly pleased to have filed for regulatory approval in the U.S. and Europe for Soliris in refractory gMG. Today, there is an urgent medical need as there are no effective therapies for patients suffering from this ultra-rare and devastating disease. We look forward to working with regulatory authorities as they review our applications this year.

We've also initiated two Phase 3 trials of ALXN1210, one registration study in patients with PNH and another in patients with atypical HUS, both with once every eight-week dosing intervals. And finally, as we look to provide more options for patients, in Q4, we completed enrollment in the Phase 1 clinical study of a new formulation of ALXN1210 administered subcutaneously in healthy volunteers.

Moving to slide seven, I'd like to discuss four key priorities for 2017 that will enable us to achieve our next level of growth and maintain our global leadership in rare diseases. Number one, serve more patients with our three life-transforming therapies. We'll continue to leverage the unique infrastructure that we've built to serve an increasing number of patients with PNH and atypical HUS with Soliris. In our metabolic franchise, we'll drive continued identification of patients with HPP and LAL-D and expand global access for Strensiq and Kanuma by reaching funding agreements in additional European countries.

Number two, invest in our pipeline. We'll expand our innovation into new franchises through focused investments in our highest priority programs. Our teams will be working diligently to advance our late-stage complement programs, which include seeking regulatory approval for Soliris in Refractory gMG in the U.S., in Europe, and in Japan and completing enrollment in the Phase 3 Relapsing NMOSD study, as well as both of the ALXN1210 Phase 3 trials.

Number three, build for the future. To support our continued growth, we're committed to building our infrastructure to support our global operations as we aim to develop best-in-class capabilities. Equally important is maintaining Alexion's high-performing culture with our 3,000 employees working around the world to transform the lives of patients and their families.

And number four, focus on shareholder value. In 2017, we will deliver continued double-digit revenue and non-GAAP EPS growth while investing in our long-term future. We are focused on driving operational efficiencies and productivity to expand our operating margin, and have announced today that we've increased our share repurchase authorization to $1 billion. Dave will discuss this in more detail.

And importantly, I'm working closely with the board and its search committee, which I'm a member of, to find a truly exceptional new leader to be Alexion's permanent CEO to drive our future growth.

At this point, I'll turn the call over to Dave for a closer look at our financial performance. Dave?

David John Anderson - Alexion Pharmaceuticals, Inc.

Thanks, David, and good morning, everyone, and thank you for participating in today's call.

I want to start with a few general comments on the business and our performance for 2016 and also our outlook for 2017. I'm on slide number nine. First, as David said, we were very pleased with our financial performance in the fourth quarter of 2016, and for the full year. Despite a number of challenges, the organization kept its eye on the ball and the performance, and the way we were able to execute is very impressive.

Second, we saw continued momentum in complement and clear evidence of the strength we're building in metabolics, which is reflected in the numbers. Third, I'm going to be sharing with you, as you know, our 2017 guidance framework. It's important to note that we've received feedback from many of you on this. We think that we've incorporated that in what we've developed, and we believe that it's a both simplified and enhanced approach to guidance. And fourth, we're focused on delivering, as David said, double-digit revenue and EPS growth, operating margin expansion and shareholder value while simultaneously making the investments smartly across our business.

So let's move now to slide 10 and look at the performance in the fourth quarter. You can see that net product sales increased to $831 million, 19% above the year ago quarter. The revenue growth was driven by a strong 20% increase in volume, partially offset by currency headwinds of 2% compared to the same period last year.

Turning to slide 11, Soliris revenues, you can see, were $749 million in the quarter; year-over-year volume growth of 10%, driven by global growth in both PNH and HUS. We reported Strensiq revenues of $71 million and sequential growth largely benefiting from serving newly diagnosed HPP patients. And for Kanuma, we achieved revenues of $11 million, reflecting progress in diagnostic testing and patient identification in our initial launch countries.

And during the quarter, we delivered non-GAAP operating margin of 42%, non-GAAP EPS of $1.26 per diluted share, or 21% growth in EPS. We also recognized an impairment charge of $85 million related to SBC-103 in the fourth quarter. The charge was taken as a result of a strategic portfolio evaluation, increases in development and commercial timelines and also updated cash flows, and it's reflected in the GAAP results. Martin's going to talk more about this development program a little bit later in his remarks.

Turning to the full year on slide 12, the 2016 net product sales increased to nearly $3.1 billion or 18% over 2015. The revenue growth was driven by a strong 22% increase in volume, partially offset by 3% or $74 million in currency headwinds. Full-year Soliris growth was driven by volume growth of 14%, reflecting continued global growth in PNH and aHUS despite continued challenges with access and treatment interruptions in Latin America. And of course the Strensiq and Kanuma revenue growth reflect the first full year of launch of each product in initial countries.

Let's now look at full year 2016 on slide 13. You can see we recorded non-GAAP EPS of $4.62 per share. As the takeaway says, the $4.62 includes both higher interest expense and effective tax rate compared to 2015. In addition, we ended the year with strong cash flow generation and a strong balance sheet. We generated over $750 million in free cash flow in 2016. We ended the year with $1.3 billion in cash and marketable securities. And during the year, we also repurchased 3.1 million shares.

So let's turn now to slide 14 and transition to the outlook for 2017. What this slide provides is a perspective on total revenue, as well as Soliris and metabolics.

Importantly, as we developed this guidance, the numbers are balanced around the midpoint of the range, and we've laid out some of the variables that could drive our revenues either to the lower or the higher end of that range. We expect total revenues to be in the range of $3.4 billion to $3.5 billion. At the midpoint, it represents 12% total growth year-over-year. It includes $50 million to $60 million of foreign currency headwinds or 1.4% to 1.8% negative impact from FX and our expectations for the impact of ALXN1210 and other trials on Soliris.

If you exclude these headwinds, revenue growth would be 17% over 2016 at the midpoint. Looking at Soliris, our revenue guidance is $3.025 billion to $3.1 billion. Our expectation is we'll continue to identify a steady number of new patients with both PNH and aHUS globally in 2017. We also expect that patient recruitment for our ongoing and planned ALXN1210 trials as well as other studies will have a $70 million to $110 million impact headwind on Soliris revenues during the year.

In Latin America, access challenges will continue, but we expect Soliris revenues to stabilize year-over-year, and Carsten will make a few comments about that in a moment.

Turning to metabolics, we're guiding revenues of $375 million to $400 million. We expect metabolics growth to be moderate, importantly, in the early part of 2017, partially due to very strong Strensiq performance in 2016, which benefited from patients who had been identified prior to approval. We also anticipate Strensiq revenue per patient to be less than 2016, partly as a result of pricing assumptions and also importantly, younger patients initiating treatment compared to our first-year launch where we saw more adult patients.

And finally, we expect growth to accelerate throughout the year, as we reach agreements to expand access in European countries. With respect to Kanuma, we expect growth to be driven by continued patient identification in both our existing markets as well as additional European country launches in 2017, as we progress through the country-by-country reimbursement process.

Turning now to slide 15, I want to give you the highlight of the important drivers behind our expectations for 43% to 44% non-GAAP operating margin. First, we're forecasting non-GAAP R&D of 22% to 23% of revenues, and non-GAAP SG&A in the range of 25% to 26%.

In R&D, we announced our plans to initiate a Phase 3 PNH switch study, and as David said, we'll also have five ALXN1210 studies, running this year supporting the development of our clinical programs.

In SG&A, we're making investments in the preparation for potential launches of Soliris in refractory gMG and in our infrastructure to support our global operations and just a word about that. These infrastructure investments include legal compliance as well as IT systems upgrades as we aim to build best-in-class capabilities to support our sustained global growth.

And on slide 16, we're forecasting our non-GAAP EPS guidance for 2017 to be in the range of $5 to $5.25. This guidance represents 11% at the midpoint of the range and assumes a higher effective tax rate in 2017 compared to the actual 2016.

I also want to briefly comment on revenue and expense expectations for 2017. First, as has been in the case in the past, we expect limited quarter-over-quarter revenue growth from the fourth quarter of 2016 to the first quarter of 2017. Second, we would expect Soliris quarter-to-quarter revenue growth to be influenced by the ALXN1210 clinical trial enrollment ramp-up and Strensiq revenue to be influenced by the dynamics I previously described. Third, I'd like to highlight a slight change in how we'll recognize revenue for 2017 in certain non-U.S. markets.

In the past, we've deferred revenue sold through some distributors until the product is received by an end customer. For those select markets, we'll now be recording revenue shipped to certain distributors earlier as we have sufficient sales data to estimate returns. We anticipate the change will not have a material impact on our overall revenue recognized for the full year. However, the change may impact quarter-to-quarter revenue, primarily due to large Soliris orders in certain markets. And fourth, we would expect a typical pattern of operating expenses to be a little bit higher in both the second and the fourth quarters of 2017.

Turning now to slide 17, as David highlighted in his opening remarks, we anticipate long-term double-digit revenue growth to be driven by Soliris, Strensiq and Kanuma as well as the potential launches of Soliris in MG and ALXN1210. We also expect incremental margin expansion and the acceleration of EPS growth. And this slide will help you frame out some of the key variables that helped shape that outlook.

Turning to the next slide, we also remain focused on delivering long-term shareholder value foundational to that is the strong free cash flow that Alexion generates. Looking to 2017 and 2018, we're mindful of course of the dynamic tax environment and we're preparing for potential tax reform.

Our capital allocation priorities: supporting obviously the growth of our in-line products and funding new launches, investing in our most promising pipeline assets, evaluating and selectively pursuing external opportunities, and of course repurchasing shares to offset dilution as well as evaluating additional buyback opportunities. And as David said, we announced today we've increased our share repurchase authorization to $1 billion reflecting the confidence of both the leadership team as well as the board in the outlook for the company.

In closing, we're looking forward to delivering another solid year of growth in 2017, smartly deploying capital to deliver value. And with that, I'll turn the call over to Carsten for a look at our commercial operations. Carsten?

Carsten Thiel - Alexion Pharmaceuticals, Inc.

Thank you, Dave. In 2016, our global commercial operations continued to serve more patients with Soliris, Strensiq and Kanuma as we delivered 22% volume growth year-on-year reflecting the underlying strength of our core Soliris business, the strong launch of Strensiq in initial countries, and the beginning of our Kanuma launch in the U.S., Germany and Japan.

Starting on slide 20 with Soliris and PNH, in 2016, we continued to identify a steady addition of new patients, even in the territories where we have been operating the longest and despite the ongoing delays in new patient starts and treatment interruptions in Latin America. Additionally, we're still seeing that the majority of patients starting on Soliris are also newly diagnosed. This affirms our view that globally, the majority of patients with PNH have yet to receive an accurate diagnosis, let alone initiate treatment.

Turning to slide 21, in aHUS, we also continue to see a consistent number of new patients initiating Soliris treatment. Matched for time from their respective approvals, we continue to see more patients globally receiving Soliris for aHUS than they have been for PNH. Importantly in the U.S., as of the end of 2016, the number of aHUS patients being treated has now surpassed PNH. This supports our view that the opportunity to serve patients with aHUS is larger than that of PNH.

We're pleased with our performance in 2016 and expect continued growth ahead of us for Soliris in both PNH and aHUS even as we are simultaneously enrolling patients into the ALXN1210 trials.

Looking at slide 22, as we advance our leadership in complement, we're continuously growing our in-line business, while also leveraging our extensive capabilities to generate further growth through expanding to new indications. As announced in January, we have filed for regulatory approval in the U.S. and Europe for Soliris as a treatment for patients with refractory gMG.

I want to remind you that our focus will be on the refractory population, an ultra-rare segment of MG, which represents about 10% of the total MG population. For example, in the U.S., there are several thousand patients who have exhausted conventional therapies, and who are suffering from the debilitating symptoms of this devastating complement mediated disease. If approved, Soliris would be the first and only complement inhibitor to treat patients with refractory gMG.

In preparation for serving these patients, we're beginning to build our global neurology team who will be focused on educating neurologists on the destructive role of complement in gMG. Beyond Soliris, our goal is to drive continued innovation to provide more options for patients. ALXN1210, our longer-acting C5 antibody is in Phase 3 trials with dosing every eight weeks. This dosing schedule would reduce the number of infusions from approximately 26 per year with Soliris down to only six with ALXN1210. Physicians and patients have provided feedback that an every eight week treatment schedule would make a meaningful difference to their lives.

In addition to our Phase 3 trials in patients with PNH and aHUS, we are also developing a subcutaneous formulation of ALXN1210. Importantly, we have a strong global patent position for both Soliris and ALXN1210.

Soliris has broad IP extending into the next decade. We continue to build and strengthen our global patent position for Soliris and expect additional patents to be issued over the course of the next 12 to 18 months.

For ALXN1210, our composition of matter patent is in effect into 2035. We have great conviction in Soliris and our pipeline candidates and see the majority of growth ahead of us in our complement franchise.

Now, I would like to turn to our metabolic portfolio, starting with Strensiq on slide 23. We're very pleased with the success of our launch thus far. In the first full year of launch we achieved strong results due to the following: our successful, long-term disease awareness and diagnostic initiatives, which enabled us to identify patients prior to approval and also led to the steady identification of new patients with HPP. And the mix of patients we served in our first year of launch. For example, many of the initial patients are juvenile or adult patients with pediatric onset HPP who have suffered the devastating consequences of their disease for many years.

Going forward, we expect to continue to identify new patients with HPP and that these patients will predominantly be younger compared to what we saw in 2016. We look forward to Strensiq being a strong, additional driver of growth in 2017 and beyond.

Moving now to slide 24. We're in the early stages of the Kanuma launch in the U.S., Germany and Japan. Our commercial team is applying our rare disease expertise as we extend our LAL-D disease awareness and diagnostic education programs to a greater number of target physicians to drive rapid and accurate diagnosis.

More physicians are now adding LAL-D to their routine diagnostic workup, which is reflected by the increase we are seeing in testing. We expect a steady improvement in the diagnosis and treatment of children with LAL-D over time.

For both Strensiq and Kanuma, we will continue to progress the in-country funding processes for additional European countries in 2017, and are committed to securing funding for patients with pediatric onset HPP, and LAL-D. In parallel, we will continue to improve our disease education efforts to identify more patients with HPP and LAL-D. In 2017, I'm confident that our commercial organization will grow our complement and metabolic franchises, while also preparing for new launches and indications.

Now we'll turn the call over to Martin, who would will discuss our R&D programs. Martin?

Martin MacKay - Alexion Pharmaceuticals, Inc.

Thank you, Carsten. In 2016, the R&D team advanced our rare disease pipeline, which includes 10 programs in clinical development and multiple early-stage opportunities. Starting with our late-stage complement pipeline on slide 27, we are very pleased to have submitted marketing applications in the U.S. and Europe to expand the indication of Soliris as a treatment for patients with refractory generalized myasthenia gravis.

Today there is an urgent need among patients suffering with refractory gMG, an ultra-rare segment of the total MG population that has no effective treatment options. Despite existing therapies, these patients continue to face disabling limitations in their daily lives including difficulty walking, talking, swallowing and breathing normally.

We also plan to file for regulatory approval in Japan in the first half of 2017 and expect decisions from all three regulatory authorities later this year. Also in neurology, the multinational Phase 3 PREVENT study of eculizumab in relapsing NMOSD is progressing. We expect to complete enrollment in 2017 and to report data in 2018.

In transplant, we were disappointed to announce in December that the Phase 2/3 PROTECT study of eculizumab for the prevention of delayed graft function after kidney transplant did not meet its primary endpoint.

Now moving to slide 28, I would like to turn to ALXN1210, our longer-acting C5 antibody that, like Soliris, leverages the only proven modality for safe, rapid, complete and sustained C5 inhibition. We are simultaneously progressing the development of ALXN1210 dosed once every eight weeks for patients with PNH and atypical HUS.

Starting with PNH on slide 29, patients in several countries are being dosed in the multinational Phase 3 trial to evaluate the safety and efficacy of ALXN1210 compared to Soliris in complement inhibitor treatment-naïve patients. To broaden the PNH clinical development program, we have decided to also initiate a Phase 3 switch study of ALXN1210 administered intravenously every eight weeks compared to patients with PNH currently treated with Soliris.

The primary endpoint of the switch study is hemolysis as directly measured by percentage change in LDH levels. We plan to enroll approximately 200 patients in the switch study with a treatment duration of 26 weeks. This study will provide additional supportive data to demonstrate that existing Soliris patients can safely and effectively transition from Soliris to ALXN1210, and we'll also evaluate the benefit of an eight-week infusion schedule. We expect to complete enrollment in both these Phase 3 PNH studies in 2017.

Turning to slide 30, the ALXN1210 Phase 3 trial in patients with atypical HUS is also progressing as planned. Recruitment is underway in complement inhibitor treatment-naïve adolescent and adult patients with atypical HUS. We expect to complete enrollment in this trial by the end of the year.

In addition, we plan to initiate a Phase 3 trial of ALXN1210 in pediatric patients with atypical HUS in the second quarter of 2017. The primary endpoint of both studies is complete TMA response in complement inhibitor treatment-naïve patients with atypical HUS. We are pleased with the robust Phase 3 studies that have clinically meaningful endpoints which reflect the views of regulators. We continue to target an approval of ALXN1210 in either late 2018 or early 2019.

Lastly, with regard to ALXN1210, we are pleased to have completed enrollment of over 40 subjects in a Phase 1 study to evaluate a new higher concentration formulation delivered subcutaneously in healthy volunteers and look forward to progressing this program.

Moving to our metabolic pipeline programs on slide 31. Enrollment is ongoing in a pivotal study to evaluate the efficacy and safety of ALXN1101 in neonates with molybdenum cofactor deficiency, or MoCD Type A, a rapidly progressing lethal disease afflicting newborns.

Turning to SBC-103 on slide 32, SBC-103 is a recombinant form of the NAGLU enzyme which is administered intravenously for patients with mucopolysaccharidosis IIIB or MPS IIIB, a rare and devastating disorder with no available treatments. Yesterday at the WORLD Symposium meeting, researchers presented a late-breaking poster from our Phase 1/2 trial of SBC-103 administered every other week at doses up to 3 milligrams per kilogram for one year.

Preliminary findings showed in cerebrospinal fluid, 9 of 11 patients had a decrease in heparan sulfate across all doses compared to baseline. And for patients with initial dose assignment of three milligrams per kilogram, the mean reduction in CSF heparan sulfate levels from baseline was 16%.

We continue the dose escalation in our Phase1/2 trial with all patients randomized to either a five milligram per kilogram or 10 milligram per kilogram dose. As mentioned in this morning's press release, following a strategic evaluation, Alexion decided to reduce its investment in SBC-103. Patients currently enrolled in the Phase 1/2 study will continue to receive SBC-103. However, no additional Alexion studies are planned.

Turning to slide 33, in Q4, we also advanced samalizumab or ALXN6000, a first-in-class immunomodulatory humanized monoclonal antibody that blocks CD200 into clinical studies. Samalizumab may have a role as a targeted cancer therapy to small subsets of patients with cancer that have limited or no treatment options.

A Phase 1 study of samalizumab in patients with advanced solid tumors is ongoing and patients are also being enrolled in the Leukemia & Lymphoma Society's Beat AML Master trial. In addition to our clinical programs, we are also keenly focused on progressing our preclinical pipeline of approximately 25 programs. In 2017, we will focus on investing in our highest priority programs as we drive towards as many as six additional product or indication approvals in 2018.

I will now turn the call back to David. David.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Thank you, Martin. As you heard this morning, in 2016, the Alexion team extended our global leadership in rare diseases as we served more patients across our global operating platform with our life-transforming therapies and we advanced our rare disease pipeline.

As always, on behalf of the executive management team and our board, I'd like to thank our talented employees for a successful 2016 and for their dedication to our mission. The fundamentals of our business are strong. In 2017, we're focused on growing our complement and metabolic franchises, preparing for the potential launches of Soliris in refractory gMG and advancing our pipeline.

With that, operator, I'd like to open the line up for questions.

Question-and-Answer Session

Operator

Thank you. We will now turn to the question-and-answer portion of the call. Our first question comes from Eric Schmidt with Cowen & Co. Please go ahead.

Eric Schmidt - Cowen & Co. LLC

Thanks for the opportunity to ask question. Maybe for Dave on a sort of longer term perspective financial guidance you provided. I know your predecessors had put out specific 2018 guidance for operating margins of 48% to 49% and a tax rate of 15% to 16.5%. How should we think about those numbers under your regime? And maybe if I could just squeeze a quick one in for Martin. Can you get ALXN1210 approved for the subcu formulation with a simple

PK equivalency program or do you need to do a separate pivotal trial there? Thank you.

David John Anderson - Alexion Pharmaceuticals, Inc.

Yeah for sure. So, I think the first point related to the margin expansion really is going to be very positively driven by the long-term double-digit revenue growth outlook that both David and I referenced, and the opportunity to continue to leverage in that environment, continue to leverage SG&A. And our R&D investment is really going to be dependent upon the pipeline opportunities and the ongoing prioritization of our investments. So to the degree that that pipeline is rich, and we have significant opportunities, that's going to influence, obviously, the margin rate lower. To the degree there's less there, that's obviously going to influence the margin rate higher.

But we're absolutely committed, very focused on operating margin. We appreciate the significance of that, and we also are committed to increasing the leverage of our revenue growth and translating that into incremental both pre-tax and acceleration of EPS as we look out to the future.

With respect to the effective tax rate I think that that's a tough one right now for anybody to project. It's just a dynamic, fluid environment with respect to policymakers, what could happen. I mean, just take the border adjustment tax as an example, and whether or not that's going to be actually a viable component of any corporate tax reform. So I would say that for the second part of that question, it's really a stay tuned. We're very much on top of it, I said to you in terms of our own planning and analysis. And then Martin, over to you.

Martin MacKay - Alexion Pharmaceuticals, Inc.

Thank you, Dave. Thanks for the question, Eric. Clearly, we're going to have a very robust data set with ALXN1210 in our intravenous program from our Phase 2 studies. And then based on what we have there and what we are going to see on the ongoing subcutaneous Phase 1 study, we will then speak with health authorities to really decide on what options to progress of subcutaneous registration program. So in essence, Eric, just a little early to align on a particular option, but these will be the subject of discussions this year.

Eric Schmidt - Cowen & Co. LLC

Thank you.

Operator

Thank you. We'll now move on to our next question from Anupam Rama with JPMorgan.

Anupam Rama - JPMorgan Securities LLC

Hey, guys. Thanks so much for taking the question. Maybe a quick one on the de-prioritization of SBC-103. Was that more of a product specific decision or is there a broader read through to the synergy by technology platform here? Thanks.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

I think we'll let Martin take that one, Anupam.

Martin MacKay - Alexion Pharmaceuticals, Inc.

Thank you, David, and thank you, Anupam. Let me make a general comment, Anupam, and then I'll get specifically to your question. As you may imagine with the dynamic pipeline that we have, we're constantly making prioritization decisions and Dave alluded to this, when discussing the outlook and what kind of figures we're going to have there. So we constantly look at the program in that sense. In terms of SBC-103 particularly, you know, it pains to say that the patients that will continue on treatment with the randomized 5 milligram and 10 milligram. So we'll continue to look at those patients and evaluate this assay as time goes on for the rest of the year, and beyond. In terms of the PPU platform that you refer to, as I've said previously, we have a number of preclinical programs looking at this pipeline, looking at our pipeline of programs that could benefit from the platform and we'll continue to look at those over the next period. Hopefully that answers that both aspects of your question, Anupam.

Anupam Rama - JPMorgan Securities LLC

Yep. Thanks so much.

Operator

Thank you. We'll now take our next question from Ying Huang with Bank of America Merrill Lynch.

Ying Huang - Bank of America Merrill Lynch

Hi. Good morning. Thanks for taking my question. So a quick one maybe for Dave. I presume that your 2017 guidance for Soliris does not include the refractory gMG revenue, right? So that could be upside if it's approved by FDA by end of this year. And then also a quick question for Martin. Can you talk about the dosing for the subcu ALXN1210? I assume it's going to be a higher dose than what we saw from the Phase 3 of the intravenous IV formulation. Thanks.

David John Anderson - Alexion Pharmaceuticals, Inc.

Yeah, I think the first part of it is – and I think we've discussed this. Our expectation is that we would have very low revenue contribution from Soliris in refractory gMG over the course of 2017. Obviously very positive in terms of the outlook there with the potential to be a significant adder on future periods. Martin, you want to take that second one then?

Martin MacKay - Alexion Pharmaceuticals, Inc.

Yeah. Thank you, Dave. And thank you, Ying. Yes, in terms of the dose for ALXN1210 subcutaneous, Ying, as you may imagine it will be highly dependent on the results that we see in the Phase 1 volunteer study. As we've said, we're looking at higher concentration formulation of ALXN1210 so that also needs to be factored in. But really looking forward to seeing those data from the volunteer study and then taking the program from that point.

Ying Huang - Bank of America Merrill Lynch

Okay. Thanks.

Operator

Thank you. We'll now move on to our next question from Chris Raymond with Raymond James.

Laura Chico - Raymond James & Associates, Inc.

Good morning. This is actually Laura Chico on for Chris. Thanks for taking the question. I guess, just following up on the pipeline and the emphasis on ALXN6000. I guess, this is an asset that you've had around for a quite a while. I'm wondering if you could expand on the rationale for moving this forward, and how this really fits in strategically with the rest of the ultra-rare disease pipeline.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Great. Martin, can you I ask you to answer that?

Martin MacKay - Alexion Pharmaceuticals, Inc.

Yeah. Thank you, David and thank you, Laura for the question on samalizumab. You are correct. We did have this asset for some time. I'd say two things happened over that period. As you will recall, we did run a Phase 2 study with samalizumab early on. I must say from a kind of scientific basis, the world of I/O has progressed enormously during that time, and it was clear that we had an asset that had been in clinical studies involved in CD200, which is a key immune checkpoint protein expressed in a number of cancers, hematologic and solid malignancies.

So, having had this asset within our pipeline but not really moving, we were approached by people outside the company who were very interested and hence the Beat AML trial with the LLS society. Then internally as we reviewed the science around immunomodulation and cancer treatments, we could see that potentially samalizumab could play a role there and hence kicked off our own study.

In terms of the strategic position, Laura, we will work with samalizumab in devastating cancer disease. So in that respect, it's very much on strategy that will clearly be guided by the results in these first two studies that we're running. I hope that helps Laura.

Laura Chico - Raymond James & Associates, Inc.

Yes. Thank you very much.

Operator

Thank you. We'll now take our next question from Matthew Harrison with Morgan Stanley.

Matthew K. Harrison - Morgan Stanley & Co. LLC

Great. Thanks for taking the question. So, just two clarifications really for me. Dave Anderson, when you answered Eric's prior question around the prior 2018 guidance given out by the former management team, can I just press you a little bit more on that? I mean should we still rely upon that? I know you gave us sort of the push pulls around margin. But, should we still rely on that prior 2018 guidance or is that subject to change now?

And then second, Martin, just specifically on SBC-103, did you see something in the clinical data that caused you to de-prioritize that program? Thanks.

David John Anderson - Alexion Pharmaceuticals, Inc.

Well, I think, you know, it's when you look at what we've provided in terms of the framework for the outlook, longer-term outlook on the margin, one thing obviously that stands out is the continued enrollment in terms of the clinical enrollment for ALXN1210. I mean, that's going to be an important continued investment and, as we've talked about, really the top priority and from the standpoint of new product development and launch in the company. So that's clearly going to be a headwind in 2018. As a result, when you just do the math, carry forward the annualized impact, the numbers that were previously communicated really, really aren't reasonable in that context.

The other things we're going to continue to do smartly and invest very smartly would include, as I mentioned earlier, some of the IT systems upgrades, some of the other areas to build our best-in-class capabilities. That's going to be a multi-year effort. Those are much smaller in comparison. But what we will see is we'll continue to see, as I mentioned, SG&A leverage through that period and continued margin expansion. And I think right now it's too early for us to say, let's commit to a specific number in that future period, because it's going to continue to be dynamic relative to what we see coming out of our pipeline and the level of investment that we're making in terms of successful commercial launch. That's our real priority. Hopefully that's helpful.

Matthew K. Harrison - Morgan Stanley & Co. LLC

Yeah. Thank you.

David John Anderson - Alexion Pharmaceuticals, Inc.

And I think there was a – was there a second question as well?

Martin MacKay - Alexion Pharmaceuticals, Inc.

Yes. Yeah. Thank you again, Dave, and thanks for the question, Matt. Again, let me say a couple of things. We have high priority programs to invest in, as I think most of us have alluded to with the ALXN1210 program and broadening of that program, also ensuring full prioritization of NMOSD and MG. So we're fully focused on those programs and prioritizing them exceptionally highly as you may recall.

In terms of your specific point around the data, maybe just to remind folks what we presented yesterday; 9 of 11 of the patients had a decrease in heparan sulfate across all doses. And then I'd also add, as we look to those patients that had the initial dose assignment of 3 milligrams per kilogram, they had a 16% reduction in heparan sulfate, so that marker clearly reduced. What we've said over a period, Matt, as you know, is what we don't know about these reductions are how they're going to be reflected in neurocognition and brain structure.

And as you also know, we presented some early data on looking at the potential stabilization. That's what we really have to understand better, so when decisions are made on prioritization to be able to see on SBC-103. We keep the current patients randomized to the 5 milligram and 10 milligram. We'll clearly be very interested in those data, but we're not going to add patients to the study, nor are we going to start new studies until we really understand what's happening over that next period. Sorry, a slightly long answer, Matt, but hopefully it gets to the heart of your question.

Matthew K. Harrison - Morgan Stanley & Co. LLC

No. Thanks for the clarification. I appreciate it.

Operator

Thank you. We'll now take our next question from Alethia Young with Credit Suisse.

Alethia Young - Credit Suisse Securities (USA) LLC

Hey, guys. Thanks for taking my question. Maybe just one. It's a little bit more broad and probably around process improvements. The things that you found like, when looking closer at the business, I think you've cited there and discussed maybe impact to some of the operating leverages. Maybe just give us a little bit more granularity on that. Thanks.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Well, I would just make a comment that, as Dave and I have been able to dig deeper into the operations of the company and looking at the support, as Dave mentioned, we're going to make an investment to strengthen our infrastructure globally. As the company grew, it didn't grow systematically across countries in the same way, and I think we need to come up with a better operating platform to do that. That requires us to make some commitment, as Dave mentioned. Dave, do you want to give some more color to that?

David John Anderson - Alexion Pharmaceuticals, Inc.

Yeah, yeah, I think it's really two things. I think one thing is to build the support structure or infrastructure to continue to enable the significant success that we're experiencing, both with our in-line products as well as potential launches. And the second thing is really to ensure that we've got best-in-class capabilities to meet regulatory, legal, financial control, the entire framework that is necessary. And we feel that that's something that will represent for the company tremendous strategic strength. And we're going to do this obviously very smartly. We're literally adding additional focus and emphasis around some great work that's already been going on at Alexion.

But it's going to be a focused effort of ours and will really, again, I think significantly support our growth as well as, over time, our margin expansion, earnings acceleration over our multi-year plan period. So, I think it's a big commitment that we're making as an organization.

Operator

Thank you. We'll now take our next question from Terence Flynn with Goldman Sachs.

Terence Flynn - Goldman Sachs & Co.

Hi. Thanks for taking the question. Maybe just first on the switch trial, is that a non-inferiority or superiority endpoint? And then on Strensiq and Kanuma, just wondering the key EU territories that you guys are expecting to come onboard in 2017 with respect to your guidance. Thanks.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Good. Well, Martin, you want to take the first part and Carsten then will you come in on the EU and territories and the priorities?

Martin MacKay - Alexion Pharmaceuticals, Inc.

Yeah. As I mentioned, Terence, and again thank you for the question on the switch. We were absolutely intent here on broadening the clinical studies that we're doing with ALXN1210 and clearly we have very robust studies around the treatment-naïve patients in both PNH and atypical HUS. And again, the simple notion of then running a switch study where patients are already on eculizumab made complete sense, and it will be a trial where we look at patients continuing on eculizumab as well as switching to ALXN1210.

In terms of the details of the study, we've only given those out partially at the moment, but suffice to say tremendous amount of work went into both the design of the study and the clinical endpoints. This was really based on the Phase 2 studies that we have. It was based on 20 years of clinical experience with eculizumab. We've done a lot of PK and PD modeling along the way to really firm up on the dosage and the endpoints.

And then last, but not least, really importantly, discussions with regulators have all gone into the studies that we're running currently. So, I hope that helps, Terence.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Thanks, Martin. Carsten, would you like to comment on priorities in Europe?

Carsten Thiel - Alexion Pharmaceuticals, Inc.

Yeah. So, Terence, looking at access and I want to touch on both Strensiq and Kanuma, our country-by-country discussions remain on track. Remember it took about 18 to 36 months for us to get Soliris reimbursed and funded for aHUS. So we're on track. We expect to continue to make progress with these additional in-country funding processes. Obviously, the leading markets in EMEA are on top of our list. Just as a reminder, we have a very successful track record for obtaining funding for our therapies because of the transformative benefit that our products have. And so that will contribute to the progressive growth that we see in 2017.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Thank you, Carsten.

Operator

Thank you. We'll now...

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Next question.

Operator

Thank you. We'll now take our next question from Robyn Karnauskas with Citi.

Robyn Karnauskas - Citigroup Global Markets, Inc.

Hi, guys. Just a maintenance question follow-up. So when you're looking at the growth of Kanuma and Strensiq, can you talk a little bit about are you seeing any dropouts from Strensiq when you're guiding for growth or are patients staying on drugs? And for Kanuma, people are trying to figure out where you are in that process. Can you give any metrics on identification, some of your efforts that you started last year? Are you yielding any results from those efforts? Thanks.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Good. Carsten, you want to take both of those? I think they're obviously right down the commercial alley.

Carsten Thiel - Alexion Pharmaceuticals, Inc.

Yep. So, Robyn, maybe first to talk about Strensiq with your question about dropouts from Strensiq. It's actually quite remarkable that patients and physicians recognize the need for ongoing treatment. What we observed so far is a very low dropout rate on Strensiq, consistent with the label and consistent with the need for ongoing therapy.

On Kanuma, David mentioned this before, we are not satisfied with the launch uptake so far. And it's fundamentally related to the uptake of testing in our markets. And what's required for a successful diagnosis is routine testing when high-risk patients present with a hepatologist or endocrinologist. That means patients who have abnormal liver values, abnormal cholesterol values from lab tests. And those institutions that have added the DBS test to their routine testing panels are identifying patients. We're seeing more and more institutions building this routine testing into their daily standard, but we are today not where we want to be. So, for Kanuma, I think I really see three drivers of growth in the future.

The first one is that this testing continues to grow as it does right now. Number two, we've seen very promising clinical data with ongoing treatment of Kanuma. In fact, patients who have been treated for 52 weeks experience an improvement in the liver biopsy in their fibrosis stage.

And this has really surprised hepatologists who had not seen such an effect ever before. And then number three, as we are making progress with the in-country funding processes, this will add further momentum for Kanuma.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Good. Thank you, Carsten. Next question?

Operator

Thank you. We'll take our next question from Geoff Meacham with Barclays.

Geoffrey C. Meacham - Barclays Capital, Inc.

Good morning, guys, and thanks for the question. For Martin, I was just curious at the sizing of the ALXN1210 studies in PNH versus aHUS. Is that based on regulatory feedback or is there a more specific clinical or statistical reason? And how much can you leverage a patient database of perspective existing patients to speed up enrollment?

And then just to slip one in for David, is there a timeline you're looking at for the full-time CFO decision? Thanks – sorry CEO decision?

David Richard Brennan - Alexion Pharmaceuticals, Inc.

You got a smile from Dave Anderson on that.

Geoffrey C. Meacham - Barclays Capital, Inc.

Yeah, exactly.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Martin? Yep, please.

Martin MacKay - Alexion Pharmaceuticals, Inc.

Yeah, I'll kick off Geoff with the two part question that you asked on PNH and atypical HUS. Yeah, the sizings very much reflects the nature of the disease as well as the dosages and the endpoints that we're looking at. So, as you may imagine, they're very much fit for purpose. One thing I didn't quite answer with Terence's question, it will be a non-inferiority study with PNH in the switch study. So very much looking into that.

The second part of your question really runs off the first part, as I'm sure you intended. Just because of the experience that we have across the globe, and of course we know the investigators, we know patients and both in terms of those countries where there are treatment-naïve patients, we have a good handle on that, and which will allow enrollment, obviously in terms of the switch study where we're very familiar with the patients because of our model and the investigators working. So, these are a very robust studies that we're running across the ALXN1210 platform, but a degree of confidence that we have that we will be able to enroll in a good fashion.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Thank you, Martin. As to the search, as you know, the search is well underway by the subcommittee of the board – the search committee the board appointed and I'm part of that. Obviously, we're trying to be diligent and at the same time move through the process as quickly as possible. Our goal is to get a leader who has the same dedication and commitment to serving patients and their families with these devastating and rare diseases as the employees here who share that mission. So we're well underway with the search, and I hope to report out on it when we have a candidate, and in the meantime, I'm 150% committed to the interim role, because it doesn't feel interim, I can tell you that, but I'm all in.

Geoffrey C. Meacham - Barclays Capital, Inc.

Okay. Thank you very much.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Thanks. Next question?

Operator

Thank you. We'll take our next question from Geoffrey Porges with Leerink.

Bradley P. Canino - Leerink Partners LLC

Hi. This is Brad Canino on for Geoff. Question on the P&L as well, SG&A went from 25% to 28% in Q4. Could you just tell us how much of that Q4 number represented the cost of the Soliris sales investigation? And then if you could, could you tell us the expected duration of the ALXN1210 headwind to revenue. And when can we expect to see those sales back in the P&L? Thanks.

David John Anderson - Alexion Pharmaceuticals, Inc.

Sure, with respect to the fourth quarter of the 2016, and the SG&A, I don't have all the numbers in front of me, but think of it as essentially all of that increase is associated with the investigation. There's other, as you know, one-time expenses typically that we have in the fourth quarter. There's some items in both the second and fourth quarter, as I mentioned earlier, that if you look at our typical pattern. We can get that breakout for you later, but the significant item that influenced that would've been the investigation.

And then in terms of ALXN1210 headwind duration as we talked about, there will also be the annualized impact of the clinical study, and the enrollment in those the studies in 2018. So I think there's always going to be some timing variability. That's the nature of clinical trials. But for planning purposes, we would expect that that headwind would continue through 2018.

Bradley P. Canino - Leerink Partners LLC

Great. Thank you.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Thanks, Dave.

Operator

Thank you. We'll take our next question from Yatin Suneja with SunTrust Bank.

Yatin Suneja - SunTrust Robinson Humphrey, Inc.

Hi, guys. Thank you for taking my question. I have a big picture question. Could you maybe talk about, as you're looking at the business, how you are thinking about diversifying it away from just Soliris or Strensiq? I mean, if you look at the complement pipeline, it seems to be still focus on or around C5, which may become competitive and we haven't seen much success in the egg white platform. So could you tell us, should we expect more pipeline to come from internal projects, acquisition, early stage, last stage? And then a quick one on MG. Do you expect an AdCom meeting for the MG? Thanks.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Let me start with the view about our overall pipeline. I mean, I think we've made a very strong commitment as an organization to extend our success and expect to extend our success in the complement franchise well into the next decade. Carsten mentioned about our intellectual property protections, both are expected, some new intellectual property for Soliris along with the patents we have for ALXN1210. And so our goal is to continue to develop both ALXN1210 and Soliris for new indications. There are other complement mediated diseases that go along with some of the other complement inhibitor projects that we have in the pipeline, and Martin can comment on those in a minute.

In addition to that, I think we plan to be very active from a business development perspective to identify opportunities that we think fit with our model and with our strategy and bring them in. And so, I – and we're not committed to a particular area. I think the complement franchise, I think will continue to be a very important part of our future. We believe the metabolic franchise is positioned to grow for the next several years as well. We have samalizumab now underway, which could represent yet another diversification of the pipeline and we're very active on the business development front looking at other opportunities. Martin, can you maybe put some more color on that?

Martin MacKay - Alexion Pharmaceuticals, Inc.

Yeah. Thank you, David, and thanks for the question, Yatin. I'll take both questions. I'll follow up to some of David's comments and then specifically on myasthenia gravis. David, you've mentioned some of the programs you know, as well as having a metabolic franchise now with Strensiq and Kanuma. We have a number of other programs that we're running outside of complement. I would say that it's really important that we continue to have this sharp focus on our complement pipeline, not just C5 with obviously eculizumab and ALXN1210, but we have a number of other complement inhibitors pre-clinically that we're looking to progress against a number of different indications.

So, it's very much concentration, outcompete ourselves on complement as well as diversifying into other areas such as samalizumab and the metabolics. In terms of our programs in preclinical that we haven't spoken about, they're all lined up against devastating diseases looking for transformative treatments and they go across multiple therapeutic areas.

In terms of your specific question on myasthenia gravis and the advisory panel, it's too early to say whether the FDA will consider an advisory panel, but I would remind you the decision to file in the U.S., Europe and Japan was really based on very positive in-person meetings with regulators and all of those authorities.

We reviewed all the prospectively defined endpoints. As you know 18 out of 22 of the endpoints were pre-specified analyses and achieved P values of less than 0.05. So, very positive meetings with regulators. We'll wait to hear back from the FDA particularly in terms of an advisory panel.

Yatin Suneja - SunTrust Robinson Humphrey, Inc.

Great. Thank you very much.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Great. Thanks for your question. Thank you, Martin. Next question?

Operator

Thank you. We'll now take our final question from Andrew Peters with Deutsche Bank.

Andrew Peters - Deutsche Bank Securities, Inc.

Hi, guys. Thanks for taking my questions. A couple of quick ones. I guess first just maybe a bigger picture question on how you think about the sustainability of the kind of PNH and aHUS franchises. I know you mentioned that globally, the majority of PNH patients in particular have yet to be treated. Is that true for the core market, specifically the U.S. and Europe, and how do you think about that as it relates to longer-term growth?

And then just wanted to circle back on SBC-103 to Matthew Harrison's question earlier. It seemed like you were describing it more as waiting for the higher dose data and the neurocognition data that to play out. But I guess, how do you reconcile that with the impairment charge that you took this morning? I just want to understand what components of that portfolio review were really prioritized into the competitive landscape in MPS IIIB play into that decision? Thank you.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Great. Why don't we take the first part of the question, Carsten, on regarding PNH and future opportunities. I mean, I think you stated, we believe that got significant growth ahead of us.

Carsten Thiel - Alexion Pharmaceuticals, Inc.

Yeah.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

You want to give us some color on that one?

Carsten Thiel - Alexion Pharmaceuticals, Inc.

Yeah, Andrew, thank you for the question. As we have highlighted in the call, one metric we're looking at is how many patients are we finding in both in PNH as well as in aHUS. Year-over-year, especially in our leading markets, the U.S., and our European markets, we continue to identify the same number of patients as previously, and importantly, as it relates to their disease and severity of disease, and conversion to treatment, we see a consistent number of patients initiating treatment. And so this encourages us in our view that the majority of the opportunity for both PNH and aHUS is in front of us.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Good. Dave, do you want to comment on the considerations that went into the impairment charge?

David John Anderson - Alexion Pharmaceuticals, Inc.

Yeah, let me do that, and then I'll turn it over to Martin.

Martin MacKay - Alexion Pharmaceuticals, Inc.

Yeah.

David John Anderson - Alexion Pharmaceuticals, Inc.

For the research and the technical side of this, but it's really for us, obviously, annually a review of all of our assets, and in this case based upon that evaluation and driven by increases in both the development and commercial timelines, as well as the updated cash flows, that really led to the accounting and the decision from an accounting perspective to take the impairment. And Martin, then over to you just in terms of anything you would want to add from what you've already discussed on this subject.

Martin MacKay - Alexion Pharmaceuticals, Inc.

Thank you. Thank you, Dave, and really Andrew, as part of your question, therein lies the answer. We are continuing with the study with the patients that are currently on SBC-103 and randomized to either 5 milligrams or 10 milligrams. Very keen to look for this correlation between the heparan sulfate reductions and benefits to neurocognition and brain structure, so we'll continue to look at those. Working with Dave and looking at just what he said, no new patients into that particular study or additional trials until we really see those data. I hope that makes it clearer, Andrew.

Andrew Peters - Deutsche Bank Securities, Inc.

Yeah, that helps. Thank you.

David Richard Brennan - Alexion Pharmaceuticals, Inc.

Thanks for your questions. I think we're wrapped up here. Is that it. Great. Thank you all for participating, we appreciate it. Good. That wraps it up.

Operator

That was your last question and this concludes today's conference call. Thank you for your participation. You may now disconnect.

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