Drug Development

Dear Alexion: Geoff Meacham has some tough love to offer as you plan the rest of your year

Geoff Meecham, Barclays analyst

Last month Barclays senior analyst Geoff Meacham rocked a few boats by taking a Dutch uncle’s approach in advising Gilead’s executive crew, suggesting they get deadly serious about doing something dramatic to correct its drifting course. Now, he’s crafted a new letter filled with tough love for Alexion $ALXN, which he sees as a company that could use a bucket of cold water in the face to wake up from its crisis-plagued existence.

First, he offers, that embarrassing sales probe and the swinging door at the executive suite has “wreaked havoc on investor sentiment.” Your communications strategy? Suboptimal. But let’s not get bogged down by your past shortcomings.

Looking forward, Meacham coaches Alexion to throw out some of the dead wood and start executing much, much better.

Ludwig Hantson

“We think that fully writing down Synageva is an important step to move on from a failed transaction; history can’t be changed, but assurances that a more robust deal vetting process is being put in place would be helpful, in our view,” writes the analyst, taking on an $8.4 billion deal in 2015 that gave them the floundering Kanuma — 2016 sales: $29 million — and a failed pipeline therapy.

Next steps: Expand the Soliris label, get cracking on the development of ALXN1210 — an anti-C5 antibody that inhibits terminal complement for patients with paroxysmal nocturnal hemoglobinuria (PNH) — and get your executive team under new CEO Ludwig Hantson on message.

He notes:

(M)ore effective communication of business trends and the overall strategy would collectively go a long way in winning back investors.

In the meantime, why don’t you think about executing a company sale.

But in the push to reset the business and investor expectations, we think it is important to consider all strategic options, including a potential sale of the company, which should be among the top priorities.


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