Alexion Pharmaceuticals, Inc. (ALXN), Amgen, Inc. (AMGN), Baxter International Inc. (BAX): The Treatment of Rare Diseases Offers Unique Opportunities

Also involved in the treatment of blood diseases is Baxter International Inc. (NYSE:BAX). Unlike Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), Baxter International Inc. (NYSE:BAX)’s revenues are not dependent on a single therapy treatment. Its diversified product suite of therapies and medical devices generated just more than $14 billion per year in revenue.  

While Baxter International Inc. (NYSE:BAX) confirmed guidance for the year, it generated strong sales from its biosciences and biotherapeutics departments with both up 6% , while sales from its medical products division were up just 2%. The company is further expecting an extra $100 million from U.S. sales of its immunoglobulin therapy,  which amounts to 6%-8% growth for the region. While Baxter International Inc. (NYSE:BAX)’s relative sales growth pales in significance to Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN)’s, it confirms the growth opportunity in therapeutics from a company that boasts revenues at many multiples to Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN).

Outlook
Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) has a lock on the treatment of PNH and aHUS, and the 35% growth in quarterly revenue for Soliris suggests that there is plenty more upside despite the relatively low number of people affected by these diseases. Soliris approval for the treatment of NMO has the potential to increase the number of Soliris users by 70%, which would have obvious benefits on revenue.

Thanks to its low PEG ratio, CNBC’s Jim Cramer thinks of Alexion as a takeover candidate. Comparable PEG ratios can be found in its competitors Amgen, Inc. (NASDAQ:AMGN) and Baxter International Inc. (NYSE:BAX) as well, however. Amgen, Inc. (NASDAQ:AMGN)’s market cap of $82 billion makes it a more probable acquirer rather than acquiree, with Baxter’s $38 billion market cap perhaps a little more attractive. Baxter International Inc. (NYSE:BAX)’s market-cap-to-revenue ratio of 2.7 is far more attractive than Alexion’s 16.0, so based on this simple comparison it’s possible that Jim may be looking at the wrong takeover candidate. Alexion could soon find itself attracting suitors if it continues with its recent successes, however.

The article The Treatment of Rare Diseases Offers Unique Opportunities originally appeared on Fool.com and is written by Declan Fallon.

Declan Fallon has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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