New Haven drugmaker Alexion Pharmaceuticals’ profits soared 38 percent in the second quarter despite a federal probe and recent c-suite shakeup, as the company announced a restructuring of its research and development strategy and an end to key partnerships.
While retaining its mission to develop treatments for rare diseases, the company will shift its focus from the ultra rare disease space to rare diseases generally, said CEO Ludwig N. Hantson.
With its broadened focus, Hantson said Alexion is focusing on therapeutic remedies related to hematology, nephrology, neurology and metabolic disorders.
In the period ended June 30, Alexion’s net income climbed 38 percent, to $165 million, or 73 cents a diluted share, from $120 million, or 53 cents a diluted share, in the year-ago period.
Sales from drug products totaled $912 million vs. $753 million in the year-ago period, a 21 percent increase.
Sales of its drugs Soliris, Strensiq and Kanuma rose 16 percent, 84 percent and 114 percent, respectively compared with the second quarter a year ago, the company said.
Restructuring
In order to restructure its R&D functions, the company will seek a third party partner for two clinical programs, cPMP replacement therapy and samalizumab, a potential cancer treatment, as it “de-prioritizes” those programs, Alexion said. The cPMP replacement therapy is a potential treatment for an ultra-rare, genetic metabolic disorder that causes irreversible neurologic damage within the first weeks of life.
Company officials also said it is discontinuing its preclinical programs, including those involving mRNA therapies. The change will result in the immediate termination of partnerships with Moderna Therapeutics, Blueprint Medicines and Arbutus Biopharma, they said.
The sudden change comes despite news in March that Alexion would spend up to $80 million plus royalties to license a Canadian firm’s drug delivery technology to develop an undisclosed drug involving at least two of those companies. Alexion had said it was acquiring exclusive rights to Vancouver, B.C.-based Arbutus Biopharma Corp.’s licensed technology to bring its own drug candidate rapidly through product development.
The license would have allowed Alexion to use Arbutus’ proprietary “lipid nanoparticle” technology to deliver “messenger RNA” therapeutics aimed at diseases caused by protein deficiencies. In 2014, Alexion partnered with Moderna Therapeutics in Cambridge to focus on mRNA therapeutics.
In response to a question about how it will execute its new plan, Hantson said, “I’m confident we’re on the right path to deliver significant value. We’re in a great position to strengthen Alexion, building on our strong foundation.”
The company’s c-suite realignment followed an in internal probe of sales practices of its Soliris drug following a complaint by a former employee, which has since been resolved. But earlier this month, Alexion became the focus of a probe by the U.S. Department of Health and Human Services’ Office of Inspector General in connection with an earlier federal investigation involving its support for charities that aid Medicare patients. That probe is ongoing.
