But three in one year? Investors are questioning the speed in which Alexion is ramping up, sending shares down after the biotech announced that it was acquiring Enobia Pharma.
In January, Alexion announced the acquisition of Taligen Therapeutics to gain access to its preclinical compounds, and a few weeks later it doubled down, purchasing the rights to an early-stage orphan drug developed by Orphatec Pharmaceuticals. Neither was all that expensive: Alexion shelled out $111 million for Taligen and Orphatec's drug cost just $3 million, although both deals contained milestone payments to the sellers if the purchased drugs are a success.
At $610 million upfront, the newest acquisition is considerably more expensive because Enobia's asfotase alfa is already in phase 2 development. Alexion is also on the hook for up to another $470 million if asfotase alfa is approved and a commercial success.
Technically, Alexion can afford the acquisition; it'll pay for Enobia with cash on hand -- $445 million at the end of the third quarter -- and has a $300 million in-bank debt already lined up. But the added interest and R&D expenses will cut into the bottom line un til the drug starts generating income in late 2014.
Longer term, though, the acquisition is likely to pay off. Asfotase alfa treats a rare disease called hypophosphatasia, which fits in nicely with Alexion's orphan drug Soliris. A second revenue-generating drug will have more of an effect on profits than the first because many of the company's base expenses won't go up with the addition of the second drug.
Orphan drugs such as Solaris, Shire Pharmaceuticals'
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