Alexion's Drug Trial Miss Doesn't Change Analysts' Long-Term Thesis

Alexion Pharmaceuticals, Inc. ALXN announced that Soliris has failed to meet primary endpoints in a Phase II/III study related to the prevention of delayed graft function in adult recipients of diseased-donor kidney transplants who have elevated risk of disease.

Soliris failed to achieve a statistically significant reduction in DCF incidents compared to a placebo.

Despite the disappointing news, several Wall Street analysts remain bullish on Alexion stock.

Voices From The Street

Leerink analyst Geoffrey Porges is more concerned with Alexion pouring money and resources into research that offers limited value for shareholders.

“The failure of Soliris for the prevention of delayed graft function (DGF) after kidney transplantation does not materially impact our long-term Soliris forecasts for growth rate, but does represent another example of Alexion ploughing Soliris profits into high risk trials for low value indications,” Porges explained.

Leerink maintains an Outperform rating and $211 price target for Alexion.

BMO Capital Markets analyst Ian Somaiya has reduced the firm’s price target for Alexion from $171 to $165 following the trial failure, but he believes investors should be buying any potential dips in the Outperform-rated stock.

“We therefore recommend investors gradually build a position in ALXN as recent changes do not diminish Alexion’s sustainable growth opportunity or burgeoning pipeline,” Somaiya explained.

A Deutsche Bank analyst said that positive trial results “would have been nice,” but the DGF failure will have “little impact to our overall thesis.”

Deutsche Bank lowered its price target for Alexion from $164 to $160 but maintains a Buy rating on the stock.

Alexion shares are up 0.7 percent in early Thursday trading.