200 Jobs Promised at Alexion Amid €450 Million Expansion
May 11, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Connecticut-based Alexion Pharmaceuticals Inc. invest $700 million to create 200 jobs in West Dublin as part of "one of the largest healthcare investments in the history of the state,” Irish officials said Monday.
Alexion will make the additions at its College Park headquarters in Blanchardstown well into 2019, adding 20,000 square metres to the site and an additional 800 construction jobs as it completes the plan.
"This is one of the largest investments in healthcare in the history of the Irish State, putting an additional €450m into a site is a real statement of intent from Alexion," said Irish Development Authority chief Martin Shanahan.
Alexion its added investment in Ireland was prompted by the "high caliber talent" its seen from its Irish workforce so far. When the work is finished, Alexion will have 500 total workers at the site.
It’s been a big month for the company. Last week Alexion Pharmaceuticals Inc. (ALXN)’s $8.4 billion cash and stock deal to acquire Synageva BioPharma was dubbed the most robust rare disease pipeline in the biotech industry, David Hallal, Alexion’s chief executive officer said in a conference call.
“Synageva is an ideal strategic and operational fit for Alexion that aligns with what we know well and do well -- providing life-transforming therapies to an increasing number of patients with devastating and rare diseases,” Hallal said this morning during the conference call. The acquisition is expected to be finalized sometime in mid-2015, the company said .
Hallal said the deal with Synageva aligns with what Alexion “knows well and does well” and means the company could have new therapies on the market to treat rare metabolic diseases by the end of the year, including Alexion’s lead drug Soliris, which was developed to treat paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS). Soliris has generated more than $2 billion in revenue since its launch in 2007.
New therapies that will bolster Alexion’s bottom line include the anticipated launches of Strensiq and Kanuma, which Hallal anticipates will generate billions of dollars in revenue.
Strensiq enzyme-replacement therapy was developed to heal the skeletal manifestations of hypophosphatasia (HPP), a sometimes fatal metabolic bone disease. The U.S. Food and Drug Administration (FDA) granted a Breakthrough Therapy designation for Strensiq and accepted Alexion’s Biologics License Application (BLA) for priority review. The company is also seeking approval for the drug from regulatory authorities in Europe and Japan.
Kanuma though may be the jewel in the deal. Hallal said the drug represents a “blockbuster billion dollar plus opportunity.”
Biotech analyst Joshua Schimmer of Piper Jaffray quickly summed up the deal in a note to investors Wednesday, saying “Diversification is good: The more ALXN can move beyond dependence of Soliris given the theoretical longer-term threats to the franchise (especially biosimilars) the better. As much as investors might want to ignore this risk, we're glad ALXN isn't,” he wrote. “Solid lead asset + strategic fit: There's a reason GEVA has long been speculated as an acquisition target for ALXN: the parallels between Kanuma and Soliris for PNH are fairly obvious and it clearly is right in ALXN's global wheelhouse. Peak sales should exceed $1B and be extremely durable.”
Kanuma is under Priority Review with the FDA and has been granted accelerated assessment of its Marketing Authorization Application (MAA) by the European Medicines Agency. Kanuma has been granted Breakthrough Therapy Designation by the FDA for LAL-Deficiency presenting in infants. Regulatory decisions in the U.S. and Europe are expected in the second half of 2015. LAL-D is a fatal disorder that leads to the buildup of fatty material in the liver, blood vessel walls and other tissues.
“This is in our wheel house. This is what we know well and what we do well,” Hallal said of the therapy for metabolic diseases.
Hallal, who took over as CEO of Alexion last month, said the deal with Synageva is coming at the strongest point in the company’s history. He said the company is in a strong financial, commercial and clinical position and it is looking to launch eight new products to treat 11 different maladies over the next three years. In addition to the drugs listed above, the deal includes Synageva’s SBC-103, an investigational enzyme replacement therapy in an ongoing Phase I/II trial for patients with mucopolysaccharidosis IIIB. SBC-103 was granted Fast Track designation by the FDA in January 2015.
In related news, Alexion may soon be pressured to issue a dividend payment. Although the biotech sector doesn’t typically offer dividends to its investors, market watchers are closely watching the dividends being offered by Gilead Sciences, Inc. , Amgen and GlaxoSmithKline as possible signs that the broader sector might soon begin issuing payouts to shareholders as the climate changes.
Front and center? Regeneron Pharmaceuticals, Inc. , Celgene Corporation and Alexion Pharmaceuticals Inc. (ALXN), who some biotech experts think might soon be next to dole out a piece of the profits in the form of dividends.
In an article on investors forum the Motley Fool in April, a panel of biotech columnists took a stab at guessing which sector companies could begin to issue payouts soon.
“Most biotechs are reluctant to start paying a dividend as long as they have promising candidates to invest in internally,” said Dan Caplinger, who covers finances. “While it's a bit of a stretch to expect Regeneron Pharmaceuticals to consider a dividend right now, it could easily be in position to do so in the not-too-distant future.”
His colleague, Sean Williams, said that he thought Alexion will be next in line. “Following Gilead, I'd suggest the next biotech company likely to begin paying a dividend to investors is Alexion Pharmaceuticals,” said Williams.
“Alexion primarily focuses on rare and ultra-rare disease drugs, with Soliris being its lone drug approved by the FDA,” he added. “Soliris is currently approved in two indications: paroxysmal nocturnal hemoglobinuria, an ultra-rare blood disorder that results in premature destruction of a patient's red blood cells, and atypical hemolytic uremic syndrome, an ultra-rare disease capable of damaging vital organs.”
However, other members of Motley Fool’s stable said that if they had to pick, Celgene would be the next biotech offering up dividends, though Biogen, Inc.’s significant profits and strong pipeline also make is a possibility.
“Between Biogen, Inc. and Celgene, I'm going to guess that Celgene is more likely to offer a dividend first because its management has been more willing during the last couple of years to use cash to repurchase shares,” wrote Brian Orelli.
“[Celgene’s] share repurchases are a clear sign that the company has a little extra money sitting around with nothing else to spend it on. At this point, share repurchase plans are the better option as these programs can be slowed down or shut off if better opportunities arise, whereas investors don't respond well to dividends that go away,” said Orelli.
“At some point, however, the level of repurchases becomes so large that it makes more sense to return at least some of the free cash flow to investors directly.”