After getting burned by an activist investor calling for a sale, Alexion has found itself defending its corporate strategy. But one area where Alexion has exceeded expectations is in backstopping sales of blockbuster Soliris—and a welcome settlement with Amgen will give the drugmaker even more breathing room.
Alexion reached a deal with Amgen late last week to settle three inter partes patent reviews, staving off U.S. biosimilar versions of Soliris until 2025 unless other challengers join the field, according to a Securities and Exchange Commission filing. Previously, an analyst favored Alexion in the IPR fight but predicted Amgen could launch its biosim as early as 2022 if it prevailed.
As part of the settlement, Amgen won a non-exclusive, royalty-free license to market its Soliris biosim beginning March 1, 2025, to treat paroxysmal nocturnal hemoglobinuria (PNH). Soliris is also approved in the U.S. to treat atypical hemolytic uremic syndrome (aHUS), myasthenia gravis (gMG) and neuromyelitis optica spectrum disorder (NMOSD).
The U.S. Patent and Trademark Office's Patent Trial and Appeal Board had been scheduled to hear the Soliris patent reviews June 16, an Alexion spokeswoman said. The companies will now jointly ask the board to terminate Amgen's petitions. Additional details of the settlement are confidential, and Alexion did not comment on its legal strategy.
An Amgen spokeswoman said in an email the drugmaker is "pleased with the settlement and the certainty that it provides of our ability to launch a biosimilar to Soliris."
The deal will likely provide Alexion the needed runway to complete its patient-switching campaign from Soliris––Alexion's flagship drug at $3.95 billion in sales in 2019––to follow-up med Ultomiris.
What effect the decision will have on activist investor Elliott Management's call for a "proactive" sale of the company, however, is less certain.
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Amgen was once considered a possible suitor for an Alexion buyout before the patent board picked up the Big Biotech's petitions in an August gut punch for Alexion.
Amgen alleged in February that the “patented subject matter was anticipated and/or obvious in view of prior art, and that the patent claims (for Soliris) are therefore invalid,” Alexion disclosed in a July filing.
Before the patient board took up the reviews in August, SVB Leerink analyst Geoffrey Porges said he expected Alexion to prevail in the case. His team had projected no U.S. biosimilars to Soliris until 2027 but said Amgen could launch a biosim by 2022 if it won its case.
Even with a long runway, though, Alexion had aimed to preempt an unexpected patent loss by moving a big chunk of its Soliris PNH patients over to Ultomiris by mid-2020. By the end of the first quarter, Alexion had switched 67% of those patients––well on its way to reaching its 70% target by the middle of the year.
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But Alexion might have bigger fish to fry now: Elliott Advisors, an affiliate of infamous proxy fighter Elliott Management, went public with its complaints about the company's management and corporate strategy in a May open letter.
The firm blasted Alexion's $1.4 billion buyout of Portola Pharmaceuticals, calling the acquisition a symptom of Alexion's "go-it-alone, trust-us" approach toward investors. Alexion inked the deal to acquire the bleeding drug Andexxa, a reversal agent for blockbuster anticoagulant meds Xarelto and Eliquis, which has delivered disappointing sales since its launch in 2018.
Elliott acknowledged in its letter that Alexion's Soliris-to-Ultomiris switching campaign has so far been "successful"—but only in spite of the drugmaker's failure to pick the right management and M&A deals.
In a statement, an Elliott spokesperson called the IPR fight "overblown" but noted "a sensible settlement would remove a significant source of uncertainty and leave the door open for the company to explore strategic alternatives without further delay, the value-maximizing pathway for the company in Elliott’s view."
In a note to investors after Elliott's public turn last month, Porges said he had heard similar discontent from other Alexion investors with "similar dismay, and fatigue, with the company’s returns."
Porges agreed that Alexion's recent M&A investments were "underwhelming" and suggested pursuing a sale might not be a worst-case scenario for the drugmaker.
"We agree that the most immediate and obvious value-creation opportunity would be the sale of the company to a larger acquirer, and concur that Alexion’s portfolio would be a good fit with a number of much larger companies that have significant interests in rare disease treatments already," Porges wrote.