Alexion to buy Portola Pharma for $1.4B

Buyer sees opportunity in Portola's Andexxa, which treats excessive bleeding

The drug company Alexion Pharmaceuticals announced Tuesday that it would spend $1.4 billion to acquire Portola Pharmaceuticals, which sells a medicine called Andexxa used to stop life-threatening bleeding in patients who have been given certain anticoagulants.

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Alexion will pay $18 per share for Portola, which closed at $7.76 per share on Monday.

Portola shares were up 129%, at $17.78, on Tuesday morning, while Alexion shares were down 5.3%, at $98.34.

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"This acquisition is particularly exciting as it immediately diversified our commercial stage portfolio and provided the opportunity to apply our demonstrated global commercial excellence," Alexion CEO Ludwig Hantson said on an investor call Tuesday morning.

Alexion's revenue is heavily dependent on sales of its rare-disease drugs Ultomiris and Soliris, which together were responsible for $4.3 billion of Alexion's $5 billion in product sales in 2019. Portola reported 2019 sales of $111.5 million for Andexxa, which is marketed as Ondexxya in Europe.

Alexion is paying a healthy premium over Portola's closing price on Tuesday. But Portola shares have dropped precipitously in recent months; they were trading at $23.88 as recently as Dec. 31. The stock fell 78.7% between May 3 of last year and the close of trading on Tuesday.

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ALXNALEXION PHARMACEUTICALS INC.
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Alexion says it sees opportunity for expansion for Andexxa sales. The drug treats excessive bleeding in patients taking so-called Factor Xa inhibitors, a type of anticoagulant. The Factor Xa inhibitor market has been growing, and Alexion expects it to grow by 12.5% a year over the next 10 years. And the company says that up to 5% of patients on a Factor Xa inhibitor experience "serious bleeds." Those bleeds can be stopped by Andexxa.

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"We have identified a clear path for accelerating and maximizing Andexxa's growth and are confident that we can leverage the full power of our established market access, commercial and operations organizations to enhance access and broaden the number of patients [helped] by Andexxa," Hantson said on the investor call.

In the question-and-answer portion of the call, SVB Leerink analyst Geoff Porges noted that Alexion's current products like Soliris are generally used chronically over the long term, while Andexxa is used once in an emergency setting.

Hantson countered that the company does have an "established acute-care hospital platform."

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"We have those strong networks in the hospital, and we have a capability, as we've shown over the years, of commercial excellence and market access," he said.