What happened

Shares of Alexion Pharmaceuticals (NASDAQ:ALXN) ended August down 11% according to data provided by S&P Global Market Intelligence, as the biotech experienced a roller coaster to finish off the month.

Interestingly, both the highs and lows involved Amgen (NASDAQ:AMGN).

A roller coaster on an up-and-down track.

Image source: Getty Images.

So what

Alexion got a boost late in the month when Spanish television network Intereconomia cited unnamed sources who said Amgen could offer $200 per share to buy the biotech, which would peg its value at close to $45 billion. Shares zoomed up, but the bump was rather fleeting -- that'll happen with unsubstantiated rumors.

A few days later, the U.S. Patent Office's patent trial and appeal board disclosed that it will review three of Alexion's patents on top-selling Soliris at the request of Amgen, which is developing a biosimilar to Soliris that treats a blood disorder called paroxysmal nocturnal hemoglobinuria (PNH) and a few other diseases.

Sales of Soliris were $980.8 million in the second quarter alone, making up 80% of Alexion's product sales. On the surface, losing patent protection on Soliris early would seem to be a big deal.

Now what

Fortunately, Alexion has already developed a follow-on treatment for PNH called Ultomiris that generated $54.2 million in the second quarter. As patients switch to Ultomiris, the patents on Soliris become less important.

Patients will still use Soliris for diseases other than PNH, but Alexion has methods patents for use in the those diseases that expire in the 2023 to 2026 time frame, giving it some time to milk the drug -- and perhaps even switch those patients to Ultomiris.

That is, if Amgen doesn't buy it first.