Uncertainty reigns at Alexion
- Alexion Pharmaceuticals revealed in a U.S. Securities and Exchange Commission filing that it is looking into claims from a former employee about some hinky sales practices for its rare disease drug.
- "Specifically, the Audit and Finance Committee is investigating whether Company personnel have engaged in sales practices that were inconsistent with Company policies and procedures and the related disclosure and other considerations raised by such practices," said the filing.
- Soliris (eculizumab) is not only Alexion's best-selling drug, but the most expensive drug in the world. The drug costs approximately $669,000 per patient per year in the U.S.
Alexion hit a snag recently when it revealed that its investigating allegations from a former employee about the sales practices for its drug. The company has retained outside counsel.
"At this point in time, the Audit and Finance Committee’s investigation has not identified instances where Soliris orders were not placed by customers for patients or any facts that require the Company to update its previously reported historical results," said Alexion in a statement on Nov. 9.
The investigation pushed the company to delay its quarterly filing with the SEC. It has yet to file it’s the report and the company said it wouldn't file until the investigation is complete.
RBC Capital Markets analyst Simos Simeonidis said in a note to investors that he expects the investigation could take weeks to a couple of months.
"Given the general nature of the practices alleged, we think that the worst case scenario may involve restatement of financials from prior year(s) sales of Soliris. Obviously, it is still possible that the investigation gets concluded with finding that there was little/no wrongdoing by Alexion," wrote Simeonidis.
"However, given that the Board decided to conduct a full investigation before filing the 10Q, instead of proceeding with the filing and simply including disclosures about the existence of the investigation, makes us believe that this is not a trivial matter," he added.
The company has also canceled an appearance earlier in November at the Credit Suisse Healthcare Conference, causing the market to speculate that there could be an acquisition underway or major trouble at the company.
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