Stock Analysis & Valuation Alexion Pharmaceuticals, Inc. (AXP.DE)

• Previous Close: €153.90
• Sector Valuation Confidence Level: High

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	n/a	n/a
Intrinsic value (DCF)		n/a
Graham-Dodd Method	37.80	-75
Graham Formula	68.70	-55

Strategic Investment Analysis

Company Overview

Alexion Pharmaceuticals, Inc. (AXP.DE) is a leading biotechnology company specializing in rare disease therapeutics. Headquartered in Boston, Massachusetts, and listed on the Deutsche Börse (XETRA), Alexion focuses on developing and commercializing innovative treatments for ultra-rare disorders. The company’s flagship products include ULTOMIRIS (ravulizumab-cwvz) and SOLIRIS (eculizumab), both C5 inhibitors used to treat paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS). Additionally, Alexion markets Strensiq (asfotase alfa) for hypophosphatasia and Kanuma (sebelipase alfa) for lysosomal acid lipase deficiency. With a robust pipeline featuring ALXN1210, ALXN1810, and ALXN1840 in advanced clinical trials, Alexion is positioned as a key player in the rare disease market. The company collaborates with biotech firms like Halozyme Therapeutics and Dicerna Pharmaceuticals to expand its therapeutic reach. Alexion’s revenue of €6.07 billion in FY2020 underscores its strong commercial execution and leadership in niche markets with high unmet medical needs.

Investment Summary

Alexion Pharmaceuticals presents a compelling investment case due to its dominant position in the rare disease market, particularly with blockbuster drugs like SOLIRIS and ULTOMIRIS. The company reported €6.07 billion in revenue and €603.4 million in net income for FY2020, supported by strong operating cash flow of €3 billion. However, risks include pipeline dependency, competitive pressures from biosimilars, and regulatory hurdles in rare disease drug approvals. The lack of dividends may deter income-focused investors, but growth-oriented portfolios could benefit from Alexion’s innovation-driven strategy and expanding global footprint.

Competitive Analysis

Alexion Pharmaceuticals holds a competitive edge through its focus on ultra-rare diseases, a niche with limited competition and high barriers to entry. Its first-mover advantage with SOLIRIS, the first approved C5 inhibitor, has solidified its market dominance. ULTOMIRIS, a next-generation therapy with less frequent dosing, further strengthens its position. However, competitors like Roche (with crovalimab) and Novartis (with iptacopan) are developing alternative C5 inhibitors, threatening Alexion’s monopoly. The company’s pipeline diversification into subcutaneous formulations (ALXN1210 SC) and new indications (e.g., Wilson disease with ALXN1840) mitigates reliance on a single product. Alexion’s collaborations with Halozyme and Dicerna enhance its technological capabilities, but its high debt (€2.56 billion) and reliance on a few blockbuster drugs remain vulnerabilities. The acquisition by AstraZeneca in 2021 could provide additional R&D resources but may also introduce integration risks.

Major Competitors

• Roche Holding AG (ROG.SW): Roche is a global leader in biotechnology, with a strong rare disease portfolio including crovalimab, a potential competitor to Alexion’s C5 inhibitors. Roche’s vast resources and established commercial infrastructure give it an edge in market penetration. However, its broader focus (oncology, diagnostics) dilutes its rare disease specialization compared to Alexion.
• Novartis AG (NOVN.SW): Novartis is developing iptacopan, an oral factor B inhibitor for PNH, posing a threat to Alexion’s IV/subcutaneous therapies. Novartis’s strong R&D budget and global reach are strengths, but its rare disease segment is smaller than Alexion’s. The oral formulation could disrupt Alexion’s market if approved.
• Regeneron Pharmaceuticals, Inc. (REGN): Regeneron competes in rare diseases with drugs like Dupixent (though not directly overlapping with Alexion’s focus). Its strength lies in antibody technologies and partnerships (e.g., Sanofi), but it lacks Alexion’s depth in complement system therapeutics.
• Biogen Inc. (BIIB): Biogen has a neurology-focused rare disease portfolio (e.g., Spinraza for spinal muscular atrophy) but no direct overlap with Alexion’s complement inhibitors. Its expertise in CNS diseases is a strength, but it lags in hematology and metabolic rare diseases.