* Alexion shares close almost 13 percent higher
(Adds analyst comments)
By Soyoung Kim and Deena Beasley
NEW YORK/LOS ANGELES, July 12 Swiss drugmaker
Roche Holding AG is seeking financing for a potential
bid for Alexion Pharmaceuticals Inc, a transaction that
if successful would be the largest healthcare deal of the year,
two people familiar with the matter said on Friday.
Shares of Alexion surged 12.6 percent to close at $114.26 on
the Nasdaq, valuing the U.S. drugmaker, which specializes in the
treatment of severe, rare diseases, at more than $22 billion.
There is no guarantee that a bid for Alexion will
materialize, added the sources, who asked not to be identified
because the matter is not public.
Roche and Alexion declined to comment. Bloomberg first
reported Roche's bid interest in the company.
Analyst Mark Schoenebaum of ISI Group said an impromptu
survey of his clients showed some 55 percent believe a deal will
happen, at a price no greater than $130.60, based on 173
Roche is best known for its portfolio of cancer drugs,
including the blockbuster Avastin, as well as a growing
diagnostics business. A buyout of Alexion would allow it to
diversify into a newly lucrative area for drugmakers, said
Guggenheim analyst Bret Holley.
"We continue to view this area (rare diseases) as very
attractive, with high market penetration and strong drug pricing
supporting substantial revenue growth," he wrote in a research
note. "However, we would be very surprised if Alexion was
actively soliciting an acquisition...we would expect that any
deal to acquire the company would almost certainly be at a
An Alexion transaction would mark Roche's biggest
acquisition since 2009 when it paid nearly $47 billion to gain
full ownership of Genentech.
In 2011, French drugmaker Sanofi SA bought Genzyme
Corp, the first company to show that it could make money from
treatments for rare diseases, for $20.1 billion.
PROFITING FROM NICHE TREATMENTS
Pharmaceutical companies are increasingly interested in
developing or buying orphan drugs or treatments for rare
diseases, as their more conventional products have lost patent
protection and consequently market share to generic competitors.
Drugs for rare diseases can command prices of more than
$500,000 a year, and have been highly profitable for other
But Sanford Bernstein analyst Geoffrey Porges questioned
whether a bid for Alexion would make sense for Roche in terms of
improving its drug development pipeline or reducing costs.
"Unlike other acquisition targets, we view Alexion's assets
and people as very ... specific," he said in a note. "We believe
the synergies available to an acquirer of Alexion would be
Alexion, based in Cheshire, Connecticut, currently sells
Soliris, a treatment for two genetic disorders: paroxysmal
nocturnal hemoglobinuria (PNH), a life-threatening blood
disorder that can lead to anemia, pain and difficulty in
breathing, and atypical hemolytic uremic syndrome (aHUS), which
can damage vital organs including the kidneys, heart and brain.
Sales of Soliris, despite treating only a few thousand
patients worldwide, are forecast by analysts to reach $1.5
billion this year and $2.6 billion by 2017 - thanks to a U.S.
list price of around $440,000 per patient a year.
Alexion is also conducting trials of Soliris in patients
with several other ultra orphan genetic diseases, a term used to
define genetic conditions that occur in fewer than 20 people per
A bid for Alexion would make sense if Roche is serious about
moving into the orphan drug space, said Janney Montgomery
analyst Kimberly Lee. She said Roche had not been considered a
likely player in that market, compared with companies like
GlaxoSmithKline, Pfizer and Sanofi.
Compared with the overall biotech sector - the Nasdaq
Biotech Index has increased 45 percent over the past 12
months - Alexion's shares have lagged, up just 4 percent for the
year before Friday's jump.
Shares of Roche have gained 45 percent over the past year.
Lee said a $120-a-share bid for Alexion had been rumored
when the stock was trading near $98, but that price now would
not be a large enough premium to get a deal done.
If it happens, a Roche bid for Alexion would mark the second
potential biotech acquisition in less than two weeks. On June
30, cancer drugmaker Onyx Pharmaceuticals rejected as
inadequate an unsolicited bid from Amgen that valued
the smaller company at roughly $10 billion.
Shares of BioMarin Pharmaceutical, another maker of
drugs for orphan diseases, rose more than 7 percent on Friday.
A potential bid for Alexion would follow Roche's failed
attempt last year to buy U.S. gene-sequencing company Illumina
Inc for $6.7 billion after shareholders held out for a
(Additional reporting by Ransdell Pierson in New York; Editing
by Michele Gershberg, Matthew Lewis and Leslie Gevirtz)