Alexion bets $1.4B on Portola and its laggard bleeding drug Andexxa

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Alexion has made no secret of its plan to diversify beyond its blockbuster rare disease franchise. Now, the company has taken a flier out on a disappointing drug that targets severe bleeding—and it’s hoping to parlay its hospital contacts into a sales boost that’ll appease unruly investors.

Alexion agreed to buy Portola Pharmaceuticals and its sole approved medicine, anticoagulant reversal agent Andexxa, in a deal valued at around $1.4 billion, the drugmakers said Monday.

That’s $18 per share in cash—a 131% premium on Portola’s Monday closing price of $7.76 per share.


The Portola buyout will take Alexion beyond a rare-disease portfolio dominated by blockbuster C5-inhibitor Soliris and follow-up drug Ultomiris. The centerpiece of the deal is a bleeding reversal agent, Andexxa, designed for patients using two common anticoagulant drugs, Xarelto and Eliquis.

So far, Andexxa has delivered disappointing sales, but Alexion still sees promise—even if it’ll take a while for that promise to pay off.

Execs were straightforward with analysts on a Monday call, saying the Portola buy would take time to add value given Andexxa’s minuscule commercial penetration––around 3% in the factor Xa reversal agent market––and a raft of strategic changes yet to be rolled out.

«The way we look at value here is long-term value,» CFO Aradhana Sarin told analysts. «This is a diversification play for us .. [and] we’ll need to have a really heavy lift in the next few quarters and years to drive value here.»

However, Alexion believes its commercial team can lean on a «near-complete overlap» between the healthcare providers its current sales and outreach teams now target and the potential market access points for Andexxa, CCO Brian Goff said. The Portola drug is used in emergencies in acute-care settings, and Soliris and Ultomiris are often first used in hospitalized patients.

Andexxa currently sports the FDA’s approval to reverse the effects of severe bleeding in patients taking Johnson & Johnson and Bayer’s Xarelto, or Bristol Myers Squibb and Pfizer’s Eliquis. The drug’s patents currently protect its market exclusivity through 2030, Alexion said.

In all, Alexion predicts that Andexxa could expand far beyond the 17.7 million patients treated in 2020, with an immediate market boost in the U.S. and future rollouts in the EU and elsewhere, Goff said.

Alexion’s latest acquisition is part of a targeted plan to add depth to the rare disease drugmaker’s portfolio amid pressure from restive investors.

In December, Alexion’s directors opted not to put itself on the block after a «good faith» conversation with Elliott Advisors—an affiliate of infamous proxy brawler Elliott Management, which requested the sale, the company said.

As part of its rebuttal to Elliott’s request, Alexion’s board touted its corporate strategy, including its «M&A leadership, including evaluating, negotiating and executing on numerous mergers, acquisitions and sales of major companies throughout their careers.»

Alexion’s pivot to M&A coincided with a minor shakeup at the top after CFO Paul Clancy––a «careful steward» of the company’s finances, according to one analyst––was replaced in September by Sarin, Alexion’s former chief strategy and business officer responsible for $2 billion in pipeline acquisitions prior to her promotion.

In Sarin, who joined Alexion in 2017 as senior vice president and head of business development and corporate strategy, Alexion elevated an “unknown quantity” due to her lack of C-suite experience, SVB Leerink analyst Geoffrey Porges said at the time of the transition.

A month after Sarin was promoted, Alexion ponied up $930 million to acquire Achillion, a developer of oral small-molecule factor D inhibitors for indications like paroxysmal nocturnal hemoglobinuria (PNH), which Alexion’s Soliris and Ultomiris both treat.

Meanwhile, Alexion is in the midst of a gung-ho patient-switching campaign from Soliris to Ultomiris, a process that has gone better than expected so far. 

As of January, 59% of existing U.S. PNH patients taking Soliris had moved over to Ultomiris, putting Alexion well on track to hit its 70% target in that indication and atypical hemolytic uremic syndrome by 2020. Soliris hit $3.56 billion in sales in 2019 with biosimilar challengers expected to hit the EU in 2022.

Meanwhile, Soliris has scored two key approvals in neurology in recent years, including FDA nods in neuromyelitis optica spectrum disorder in June and myasthenia gravis back in 2017. Both indications came with blockbuster sales potential at the time.




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