9th Jan 2024 11:43
(Alliance News) - German bank Berenberg talked up AstraZeneca PLC's Alexion Pharmaceuticals, believing it is still in good shape despite some competitors entering the market.
Berenberg, after a meeting with Alexion's management, noted the unit made "significant progress" in 2023. FTSE 100-listed AstraZeneca sealed the USD39 billion buyout of Alexion in July 2021.
"We continue to view this business as a high-value asset within AstraZeneca, contributing USD7.8bn of sales in 2023 (17% of total revenue)," Berenberg said.
"We forecast 4% per annum sales growth for the Alexion business through 2023-30, driven by the strength of the legacy complement business, leveraging AstraZeneca's global footprint and pipeline contribution. Our Alexion sales forecasts are 4% ahead of consensus for 2025. This supports 6% pa revenue growth for AstraZeneca group versus large pharma average of 3% per annum [excluding obesity drugs]."
Alexion is an operator in the complement disease market. The body's complement system is what strengthens key parts of the immune system including antibodies.
Once a solo operator in the field, competition for Alexion is arriving. However, Berenberg does not believe this will hurt Alexion.
"Alexion created the complement disease market in 2007 and delivered the only innovation (Ultomiris with its infusion every two months) until the recent arrival of new drug mechanisms of action and alternative drug administration," the German bank said.
Brussels-listed Argenx SE, Nasdaq-listed Apellis Pharmaceuticals Inc and Zurich-listed Novartis AG are among the competitors in the market now.
"We continue to believe Ultomiris remains differentiated through its dosing frequency and do not expect a mass exodus to new therapies," Berenberg said.
"Catalysts" for Alexion in 2024 include more treatment approvals for Ultomiris, as well as Danicopan.
Berenberg rates AstraZeneca at 'buy' and has a price target of GBP125.00. Astra shares traded 0.7% higher at 10,850.00p each in London on Tuesday morning.
By Eric Cunha, Alliance News news editor
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