Alexion Pharmaceuticals Inc. (ALXN) could view Sage Therapeutics Inc. (SAGE) and Ra Pharmaceuticals Inc. (RARX) as potential acquisition targets, according to BMO Capital Markets Corp. analyst M. Ian Somaiya in a Tuesday, Sept. 12, note.
New Haven, Conn.-based Alexion on Tuesday announced plans to cut about 20% of its global workforce as part of a restructuring that would result in $250 million in non-GAAP pre-tax savings annually by 2019. The firm said it plans to reinvest about $100 million annually to build its pipeline via business development and additional complement indications.
The company also said it will move its headquarters to Boston by mid-2018. New Haven will be the firm's Center of Excellence for its complementary research and process development teams.
The relocation news "was a bit surprising and should stir discussion about potential business development (BD)," wrote Somaiya. "Our top targets for Alexion are SAGE and RARX."
In the announcement, Alexion said the move to Boston will "provide access to a larger biopharmaceutical talent pool and a variety of life-sciences partners to further support future growth initiatives."
Shares of Alexion closed at $144.07 on Tuesday, up 0.8%. The company has a market capitalization of $32.15 billion.
Alexion reiterated its previously announced strategy which involves growing its rare disease business; focusing research on its complement expertise and development on the core areas of hematology, nephrology, neurology and metabolic disorders; pursuing business development and optimizing infrastructure.
Somaiya wrote that business development "eventually will be needed to rebuild the pipeline and while management indicated opportunities within and outside the complement space will be considered (including expanding into orphan from ultra-rare/rare diseases)," he expects that Alexion will consider Ra Pharmaceuticals due to its diversified complement pipeline and Sage due to its diverse pipeline.