JPM: Alexion to take Ultomiris into tough ALS study as switching campaign exceeds expectations

Alexion's winning its campaign to switch patients from its blockbuster Soliris to next-gen follow-up Ultomiris. Not content to simply move patients over, though, the company's taking a swing at a new Ultomiris indication where other candidates have struck out.

The company will start a phase 3 trial for Ultomiris in amyotrophic lateral sclerosis (ALS), an indication with few approved treatments, the drugmaker said Tuesday. 

Instead of painting your typical rosy picture of future success, Alexion CEO Ludwig Hantson admitted it's a long shot. Basically, ALS is not on Alexion's list of high-probability wins. 

"We are aware that this is a high-risk, high-reward program," Hantson said Tuesday at the annual J.P. Morgan Healthcare Conference in San Francisco. 

Alexion submitted an investigational new drug application to the FDA for Ultomiris in ALS in the fourth quarter and plans to launch the phase 3 study this quarter, the drugmaker said in a release.

RELATED: Alexion shoots down 'proactive' sale demand from activist investor

The fact that Alexion feels free to take a swing at ALS might come down to its rousing success with Ultomiris. By Jan. 10, the drug had won over 59% of existing U.S. paroxysmal nocturnal hemoglobinuria (PNH) patients who'd been taking its predecessor Soliris. Those numbers come just one year after Ultomiris' launch and put the drug well on track to Alexion's internal goal of 70% switching in that indication by mid-year.

Ultomiris' success helped spur Alexion to 20% quarter-over-quarter revenue growth in the last three months of 2019, the drugmaker said, giving shareholders some breathing room as stalwart Soliris faces challenges on all sides.

Last week, Apellis Pharmaceuticals' late-stage candidate for PNH topped Soliris in improving patients' hemoglobin levels at 16 weeks, according to phase 3 head-to-head data released Tuesday. But with the Ultomiris switching campaign going so well, Apellis' data fell "short by a wide margin" in positioning the drug as a Soliris competitor and should offer a "sigh of relief" to concerned investors, Piper analyst Christopher Raymond said.

Soliris is also facing patent challenges from a number of drugmakers, including Amgen, which was once rumored to be a potential Alexion suitor for a buyout.

RELATED: Alexion inks deal to acquire Achillion for $930M upfront

Alexion is facing pressure from within despite its recent success. In November, Alexion's directors opted not to pursue a sale after a "good faith" conversation with Elliott Advisors—an affiliate of infamous proxy brawler Elliott Management, which requested the sale, the company said.

As part of its rebuttal to Elliott's request, the board touted its corporate strategy, including its "M&A leadership, including evaluating, negotiating and executing on numerous mergers, acquisitions and sales of major companies throughout their careers."

Hantson backed up that M&A record Tuesday, touting the drugmaker's recent pickup of biotech Achillion for $930 million in December as a diversifying addition to Alexion's portfolio and "a good reflection of our goal to bring external innovation into this company."

Editor's Note: This story has been updated to correct an error.