Alexion Spikes Amid Report Activist Elliott Management Is Pushing for Change

Alexion Pharmaceuticals Inc. (ALXN) shares surged almost 6% on Friday, Dec. 8, amid reports that activist investor Elliott Management is pressing for major changes on the company's board if it doesn't outline plans to boost growth.

The New York Times reported late Thursday that Elliott wants the biopharmaceutical group to detail plans to boost its share price by the end of the month, including a strategy to potentially sell the company outright, or it will begin a proxy fight for seats on the board. 

Alexion got a rare boost to its share price in October when the U.S. Food and Drug Administration approved its flagship Soliris drug, which is used to treat adult patients with generalized myasthenia gravis (gMG).

The approval came after the European Commission in August greenlighted the extension of the indication for Soliris to include the treatment of refractory gMG in adults who are anti-AChR antibody-positive. In March, Alexion submitted an application to Japan's Ministry of Labour and Welfare to extend the indication for Soliris as a potential treatment for patients with anti-AchR antibody-positive refractory gMG.

However, the stock was downgraded by TheStreet.com's quantitative service last month and our technical expert, Bruce Kamich, argued that its weak dynamics suggest the stock is likely to remain on the defensive.

"In this daily bar chart of ALXN, below, we can see that ALXN is below both the declining 50-day line and the bearish 200-day moving average line," Kamich wrote. "The daily On-Balance-Volume (OBV) line topped in October and has turned lower telling us that selling pressure has become more aggressive."

"The trend-following Moving Average Convergence Divergence (MACD) oscillator turned down below the zero line at the end of October for an outright sell signal," he added. "The price action the past two or three weeks looks like a bearish continuation pattern so further declines would be anticipated."

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