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Shares of Alexion Pharmaceuticals (NASDAQ: ALXN), a biotech focused on rare diseases, fell 9.9% in March, according to data fromS&P Global Market Intelligence. The drop was much worse than the 2.5% fall in the biotech sector in general, as measured by the iShares Nasdaq Biotechnology ETF (NASDAQ: IBB).
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The sell-off was primarily caused by news that the company is looking to raise capital.Alexion filed paperwork with the SEC stating that it plans to raise $100 million through a common stock offering.
Here's a review of the key headlines out of Alexion in March:
- Alexion's founder and board member Dr. Leonard Bell announced that he will not stand for reelection as a director. His term is scheduled to end on May 10.
- The company announced that the FDA has accepted its label expansion application for Soliris as a treatment for patients with refractory generalized myasthenia gravis who are anti-acetylcholine receptor antibody-positive. The agency said it plans on making a decision by Oct. 23.
- Soliris was also submitted to regulators in Japan as a hopeful treatment for patients with refractory generalized myasthenia gravis who are anti-acetylcholine receptor antibody-positive.
- Alexion's board announced that it hired Dr. Ludwig Hantson as its new permanent CEO. Hantson was successfully lured away from Baxalta, where he served as president and CEO. This hiring fills the void left by former CEO David Hallal, who resigned in December "for personal reasons."
Beyond news from the company itself, Alexion also managed to attract some positive praise from the analyst community, too. Analysts from two companies -- UBS and Instinet -- initiated coverage on the stock during March, and both rated shares a buy. They set price targets of $138 and $148, respectively, which were higher than the share price at the time.
And yet, despite all that, shares still took a nose dive during the month.
It has been a rough fewmonths to be an Alexion shareholder. In November, the board of directors announced that it wasconducting an internal investigation into the company's sales practices related to Soliris, which delayed the filing of its quarterly report. Roughly a month later, the company's longtime CEO and CFO exited. To add insult to injury, Alexion then announced that Soliris had failed to meet its primary endpoint inits phase2/3 PROTECT study.
Thankfully, the company has since filed its quarterly report, concluded its investigation, and hired a new CEO. That should go a long way toward rebuilding investor confidence in this company. Meanwhile, the analyst community is projecting profit growth in excess of 18% annually from here. If the company's troubles are finally in the rear view mirror, then shareholders appear to have plenty of reasons to expect better times ahead.
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