Alexion Pharmaceuticals is evaluating opportunities to expand the market for its only commercial product, Soliris (eculizumab), approved for a rare blood disorder.

The product, approved for the treatment of paroxysmal nocturnal hemoglobinemia (PNH) by FDA in 2007, has been exceeding expectations despite its limited market. The drug appears to be an ultra-orphan product that is on its way to achieving blockbuster status, based on the business model that companies like Genzyme Corp. proved profitable. Soliris has a small target patient population, but it is priced at more than $400,000 a year for treatment.

Alexion announced July 21 that second quarter sales of Soliris and total revenues increased 48% to $187.5 million year-over-year, while its profits increased 60%. Alexion earned $34.7 million, or 18 cents per share, in the three months ended June 30, up from $21.8 million, or 12 cents per share, in the prior-year quarter. The drug is now approved in most major markets including the U.S., EU, Japan, and Australia.

"We believe the acceleration in growth was driven by newly launched territories with the first full quarter in Australia and Japan getting back on track after the earthquake in March," wrote Leerink Swann analyst Howard Liang in a note to investors.

Management says its physician education programs, informing doctors about the extremely rare disease and how to diagnose it, are driving growth of Soliris. "Our efforts in our core territories as well as in emerging markets continued to be grounded in our ongoing disease awareness and diagnostic programs. Through these educational initiatives in Q2 as in prior quarters, we continue to observe in the U.S .and Western Europe that a large proportion of patients newly started on Soliris were also newly diagnosed," said Alexion Senior VP-Commercial Operations David Hallal on a same-day conference call.

The company is now focused on selling the drug in Turkey, Brazil, and Russia.

Expanding The Market Through New Indications

PNH is estimated to affect 8,000 to 10,000 people in North America and Europe, as well as another 1,000 to 2,000 people in Japan. While sales of the drug have been strong, the company hopes to continue to grow the brand through expanded indications.

Alexion filed a sBLA with FDA to extend Soliris' indications to include atypical Hemolytic Uremic Syndrome (aHUS), another rare indication in which blood clots in small blood vessels throughout the body can lead to kidney failure, stroke, heart attack and death. FDA granted the application a six-month priority review in the second quarter, which means the drug could gain approval for the indication by the end of the year.

Alexion is also studying Soliris as a treatment for patients undergoing kidney transplant who are at elevated risk of antibody mediated rejection, or acute humoral rejection (AHR). The biotech has received approval from FDA and EMA to conduct clinical trials and is preparing to initiate studies in the fall.

Soliris also proved useful in responding to a public health crisis in Germany. During the second quarter, Alexion provided Soliris free of charge to treat an increasing number of patients whose kidneys were failing after an outbreak of E. Coli from tainted food. The condition is called STEC-HUS, or Shiga-toxin-producing E. coli hemolytic uremic syndrome. More than 800 people needed treatment and more than a third of them were treated with Soliris, according to the company. Alexion has since decided to study Soliris in STEC-HUS. A clinical program has been initiated.

"We had not previously planned for a development program in this disorder [STEC-HUS]. We are now pleased to partner with the Paul-Ehrlich-Institut and the medical community in Germany to learn more about the potential role of eculizumab in this ultra-rare disease," said Stephen P. Squinto, exec VP and head of R&D at Alexion.

Due to the strong financial performance of Soliris and the expectation of approval for a new indication, Alexion was able to increase it sales guidance to a range of $745 million to $755 million for the full-year 2011 from the previous range of $720 million to $740 million. The company also increased its earnings per share forecast for the second time this year, predicting earnings of $1.10 to $1.15, up from $1.05 to $1.12. Alexion's stock jumped on the strong financial report, gaining 9% to reach $56.77 per share by close of the trading day.

-Lisa LaMotta (l.lamotta@elsevier.com)

Alexion Soars On Strong Q2 Soliris Sales

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