Alexion Up 14%; SG Cowen Bullish On Antibody Drug Trials
DOW JONES NEWSWIRES
By Roger Cheng
Of DOW JONES NEWSWIRES
NEW YORK -- Alexion Pharmaceuticals Inc. (ALXN) shares reached a 52-week high Thursday on the heels of an optimistic call on the fate of one of its potential antibody candidates.
After meeting with Alexion Chief Executive Leonard Bell on Wednesday, SG Cowen analyst Eric Schmidt said he sees steady progress at the New Haven, Conn., company with the clinical trials for its antibody candidate eculizumab.
Schmidt, who maintains an outperform rating on the company, said in a note his confidence on a positive clinical outcome for eculizumab is high. Aside from the meeting, the analyst cited positive Phase I and II trials.
Eculizumab, which is being developed to treat paroxysmal nocturnal hemoglobinuria, or PNH, kidney disease and rheumatoid arthritis patients, is set to undergo Phase III trial in early 2004, Schmidt said.
PNH is a rare disease where a person is born with defective blood cell that's missing anti-inflammatory functions. The disease is characterized by severe anemia and risk of blood clotting, or thrombosis. About 5,000 to 10,000 patients have PNH, Bell told Dow Jones Newswires. The other intended use for eculizumab, kidney disease, has a wider market of 100,000 U.S. patients, he added.
While the drug has several uses, SG Cowen's Schmidt believes the most compelling data comes from its treatment of PNH. He believes there's a market opportunity of $100 million to $200 million that Alexion can reach without the partnership of a larger drug company. The stock should appreciate as investor anticipation over the drug mounts.
"We believe additional long-term data on eculizumab in PNH at this year's American Society of Hematology meeting (in December) followed by the start of Phase III trials earlier next year will trigger strong stock performance," Schmidt said.
Bell said Schmidt probably focused on that aspect of the presentation because of the marked improvement of patients using eculizumab.
Schmidt or a member of his household owns a stake in Alexion, but his firm doesn't have an investment banking relationship with the company.
Alexion recently traded at $20.15, up $2.48, or 14%, on volume of 480,500 shares. Average daily volume is 249,600 shares.
Earlier Thursday, shares rose to $20.23, above the 52-week high of $20.15 set June 17.
While touting his confidence in Alexion's eculizumab, SG Cowen's Schmidt added that the company's other lead drug candidate, pexelizumab, still has a mixed outlook.
Pexelizumab, developed to reduce the incidence of death or myocardial infarction in patients undergoing coronary bypass surgery or cardiopulmonary bypass, hit a snag when it failed to meet its primary endpoint in its Phase III trials. The drug, however, did meet important secondary endpoints, Schmidt said.
Alexion's Bell said the company was encouraged by the outcome of that trial and continues to be encouraged by pexelizumab. He said the overall intensive treatment clinical results were positive.
Investors were enamored with Alexion when pexelizumab won fast-track status from the Food and Drug Administration in September 2000. They've since shied away since the disappointing trial data. Wall Street holds little to no expectations for the drug, Schmidt said. Alexion is forming a partnership with Proctor & Gamble Co. (PG) in development of the drug.
Alexion has yet to have meaningful discussions with the FDA on the potential marketing approval of pexelizumab, Schmidt said, adding that its future is "less clear."
There is still a chance the drug can be approved, given its strong secondary endpoint results, positive Phase II trials and clean safety profile, Schmidt said, adding that he expects a regulatory decision by the end of the year.
Bell said the company will proceed with more Phase III trials on the drug.
-By Roger Cheng, Dow Jones Newswires; 201-938-5393; roger.cheng@dowjones.com
Updated October 2, 2003 2:47 p.m.
[The amazing thing (if they are correct, which I somehow doubt) is that the markets have completely discounted pexelizumab but are sending the share price northwards based on speculations with regard to the results from a drug that is not yet out of phase II] |
