Biotech Stock Alexion to take a hit as fails tests

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Alexion Pharmaceuticals’ (ALXN) sole marketed product is Soliris (eculizumab). Soliris is available for the treatment of two rare genetic disorders – paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome. As the company is entirely dependent on Soliris for growth, it should look to avoid any setback related to the product.

However, the FDA seems to be far from pleased with Soliris’ manufacturing facility at Rhode Island. The FDA had issued a warning letter last year as it felt that the company did not comply with the current Good Manufacturing Practices at the facility. Shares of the company had gone down on the news.

A re-inspection of the facility by the FDA earlier in the month failed to satisfy the U.S. regulatory agency once again. Following the latest inspection, the FDA issued a Form 483 to the company in which three observations were mentioned. The observations were different from the issues raised in the warning letter last year.

Alexion believes that the FDA observations will not impact the supply of Soliris and its financial health. However, additional manufacturing issues at the facility might invite stricter action from the FDA. This will hurt this one-drug company badly.

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Meanwhile, Alexion continues to develop Soliris for indications other than those already approved. To that end, Alexion announced the commencement of a multinational registration study to evaluate the safety and efficacy of Soliris for preventing delayed graft function (DGF) following kidney transplantation.

DGF is a serious complication resulting in the non-functioning of an organ after transplantation. DGF affected kidney transplant patients have to undergo dialysis.

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Apart from trying to expand Soliris’ label, Alexion is also working on developing other candidates. The most interesting candidate at Alexion is asfotase alfa (hypophosphatasia). A rolling submission to the FDA of the Biologics License Application is underway. The candidate is also under review in the EU. We expect investor focus to remain on updates regarding Soliris’ manufacturing issues and Alexion’s efforts to develop its pipeline.

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