(Reuters) - Alexion Pharmaceuticals Inc (ALXN.O) raised its profit and sales forecast for the year after the French government agreed to raise reimbursement payments for the company’s treatment for two rare blood disorders.
The company’s stock jumped nearly 7 percent in afternoon trade.
The drug, Soliris, which costs about $440,000 per patient a year, is the only approved treatment for two potentially fatal conditions that can damage vital organs including the kidneys, heart and brain.
Soliris, the company’s sole product on the market, is approved in the United States, the European Union and Japan for the treatment of paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome.
“This is a testament to the drug’s dramatic (therapeutic) effect,” Morningstar analyst Stefan Quenneville said, as Alexion continues to achieve favorable reimbursement terms even in an austere pricing environment in Europe.
Deutsche Bank analysts said the French government’s decision should bode well for Alexion’s ongoing reimbursement discussions in Spain and Italy.
Britain’s healthcare costs watchdog earlier this month asked the biotechnology company to explain Soliris’ expensive price before deciding whether the treatment should be paid for by the state health service.
Wall Street expects the drug to generate $3.1 billion a year by 2017.
Wells Fargo analyst Brian Abrahams said the company’s raised forecast was somewhat unexpected, even though he had assumed that the company’s negotiations with the French government would result in a positive outcome.
The drugmaker raised its full-year adjusted earnings forecast to $4.37-$4.47 per share from its previous estimate of $3.70-$3.80.
The company raised its sales outlook to $2.15-$2.17 billion from $2.00-$2.02 billion.
Alexion said the earnings estimate includes 37 cents and $88 million attributable to sales related to years prior to 2014, which would be recorded in the first quarter.
Soliris is also undergoing development for use in other “orphan” indications, or conditions that affect less than 200,000 people in the United States. The status ensures the company seven years of market exclusivity.
Cheshire, Connecticut-based Alexion’s shares were trading at $179.51 on the Nasdaq. They have gained over 80 percent of their value over the past year.
Reporting by Natalie Grover in Bangalore; Editing by Sriraj Kalluvila