Stock (Symbol) |
Alexion Pharmaceuticals (ALXN) |
Stock Price |
$182 |
Sector |
| Healthcare |
Data is as of |
| December 21, 2015 |
Expected to Report |
| Jan 27 – Feb 1 |
Company Description |
 Alexion Pharmaceuticals, Inc. (Alexion) is a biopharmaceutical company focused on serving patients with severe and ultra-rare disorders through the development and commercialization of life-transforming therapeutic products. Its marketed product Soliris (eculizumab) is the first and only therapeutic approved for patients with two ultra-rare and severe disorders resulting from chronic uncontrolled activation of the complement component of the immune system: paroxysmal nocturnal hemoglobinuria (PNH), an ultra-rare and life-threatening blood disorder, and atypical hemolytic uremic syndrome (aHUS), an ultra-rare and life-threatening genetic disease. Source:Thomson Financial |
Sharek’s Take |
 Alexion Pharmaceuticals (ALXN) is rare disease (orphan drug) specialist which produces few drugs but sells them at a high price. It has one big drug now, Soliris, and another in the pipeline in Asfotase Alfa. Alexion acquired Synageva Biopharma in May to add a third rare disease drug, but ALXN paid 135% more than Synageva’s stock was worth, and it will take a while to see if ALXN can get $1 billion in sales out of Synageva’s drug Kanuma like it thinks it can (the company does $2.5 billion in sales now). Alexion also has a few other drugs in development. ALXN doesn’t give consistent profit growth, it’s either blockbuster or bust. Profits were down around 10% last qtr because of the acquisition, and -10% growth looks to continue for a few more qtrs. This is a long-term investment as the three drugs are expected to boost profits from $4.97 this year to $9.19 in 2018. I’m inclined to sell the stock, but this profitable Biotech has no long-term debt and the company is takeover target. I’d hate to sell then see the stock pop due to a buyout offer or big drug news. Thus I will reduce my position in ALXN, and wait it out. |
One Year Chart |
 This stock hasn’t gone anywhere in a year. Investors felt ALXN paid too much for Synageva and the stock fell after the acquisition was announced. It also fell during a market downturn in August. 2015 estimates have dropped from $5.89 to $4.97 due to the acquisition, but profits will benefit long-term. At 33x earnings, the stock is right at my 2016 Fair Value. So ALXN could be here a year from now. |
Fair Value |
 ALXN always sells for a high multiple. The P/E is usually 32 to 44, so I guess you can say the stock is “low” right now. The stock is right at my 2016 Fair Value and in my eyes could be dead money this year. But if I sell it could take off and leave me behind. |
Bottom Line |
When you look at the ten-year chart you see the quality of the stock. I was considering selling ALXN, but this chart makes me think otherwise. I think the best course of action is to sit and wait. |
Power Rankings |
Growth Stock Portfolio
34 of 38Aggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
