Wednesday, February 20, 2008

Alexion Pharma (NASDAQ:ALXN): Possible bounce play?

Dan from Shark Biotech ( shot me some interesting thoughts on Alexion Pharma (NASDAQ:ALXN) this morning:

Another stock that is complete free fall is ALXN which has dropped by 17 points since they reported earnings last week. ALXN sells a drug called Soliris which is the only drug approved to treat PNH a rare blood disorder that causes the destruction of red blood cells.

The stock fell despite the fact the company reported sales of Soliris which beat estimates and increased guidance for 2008. What killed the stock was a downgrade from Wachovia on the assumption that sales would slow in 2009 as the company fully penetrates the PNH market.

Whats important to note that other than Germany the company has really not made any inroads in to the European market. In fact the company just recently launched the drug in the UK. In Asia as well the drug has not yet launched and will probably not do so for at least another 18 months. So although here in the US the drug the market will fully penetrated by the end of this year there is still a lot of worldwide growth to come.

Another factor to consider is the company's pipeline where they are studying Soliris in a number of new indications such as myasthenia gravis and multifocal motor neuropathy. A new indication for the drug would obviously open up a whole new market for which current estimates have not yet factored in .

Although this is not the best market for catching falling knives I am going to start a position in ALXN here at 58 . If it falls more I will consider adding.

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