Alexion Pharmaceuticals Is Still A Buy, Despite Rx Kanuma's Review-Date Delay

In a report issued Friday, Brean Capital analyst Jonathan Aschoff looks into Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) and, after some minor model adjustments, reiterated a Buy rating and $221.00 target price on the stock.

The slight tweak in the firm’s financial model was triggered by the company’s announcement that “the FDA has extended the Priority Review PDUFA date for Kanuma (enzyme replacement therapy to treat lysosomal acid lipase deficiency; LAL-D) by a standard three months from the previously disclosed September 8, 2015 PDUFA date.”

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According to the FDA request, Alexion recently presented additional CMC information. Therefore,“The FDA took its standard liberty of allowing itself an extra three months to review the new material.” Having said this, the analysts at Brean do not expect to see any further delays in the approval of Kanuma, and they consider the current postponement as “immaterial” to both Alexion and their investment thesis.

However, given the adjustments in the revenue estimates, the firm’s non-GAAP EPS estimates for the third and fourth quarter of the year were trimmed to $0.96 and $0.91, respectively, from a prior estimate of $0.97 and $0.95, respectively. Alexion’s management, on the other hand, reiterated its 2015 guidance. Brean is now in the midpoint of the $4.70–$4.80 per share non-GAAP earnings guidance range, and no longer at the high end of it.

EU Approval

Earlier this week, Alexion said that the European Commission had approved Kanuma “for the treatment of LAL-D for patients of all ages.”

The report explained, “Kanuma is the first treatment approved in the EU for LAL-D, a rare genetic metabolic disease in which patients of all ages could suffer multi-organ damage and premature death.”

The company also announced that the European Commission accepted Strensiq as well for the treatment of HPP, making it, once again, the first approved therapy for this condition.

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