Alexion Pharma Stock A Buy After A Pair Of 'De-Risking' Events In 2017

Following two key de-risking event, namely the second-quarter strategic update and hiring of an industry veteran as the chief financial officer, JP Morgan upgraded shares of Alexion Pharmaceuticals, Inc. ALXN.

The firm sees the new CFO hiring as a positive readthrough, signaling low potential for additional headline risks related to Soliris sales practices, etc.

The rating on Alexion Pharma's shares was improved to a Buy from Neutral and the price target on the shares was increased from $163 to $175.

Analyst Anupam Rama noted that the company prudently set low expectations for the second half of 2017 on the second-quarter earnings call. The analyst believes the Street's focus now shifts to the second half of 2017 and the first half of 2018 clinical catalysts, which it believes would be key drivers over the next six to 12 months.

Key Catalysts

The key catalysts the analyst looks forward to include:

• PDUFA date of October 23 for Soliris MG.
• Decision on Soliris myasthenia gravis, or MG, in Japan expected in early 2018.
• ASH 2017, which the analyst believes will see the presentation of multiple competitive complement updates.
• Phase 3 PNH naïve study data on ALXN120 expected in early second quarter of 2018.

See also: Attention Biotech Investors: September Ushers In Another Slew Of PDUFA Catalysts

JP Morgan said the upgrade was based on its positive expectations on a supplemental approval of Soliris for MG by the October PDUFA data and its continued positive stance on ALXN1210 as a long-term defense point for Alexion's complement franchise.

Based on feedback from physicians, the firm expects the strength of the phase 3 REGAIN data to lead to Soliris approval.

"Additionally, post a series of physician calls in the space, while competitor complement players will have updates in the next 6-18 months, we believe the '1210 profile is already clinically compelling and the burden is on competitors to produce meaningful data," the firm added.