Investors raise concern about Alexion valuation

July 14
11:45 PM 2013

The acquisition for Alexion Pharmaceuticals Inc would help Roche dive in a new thriving industry of developing drugs for rare diseases. However, the company demanded a price that Roche is not willing to pay.

Two sources said that Alexion is looking for potential buyers interested for the Basel-based firm. Big pharmaceutical firms were drawn even with sky high prices offered for the company. The marketing costs of treatments for orphan diseases also increased buyer interest after their older drugs lose patent protection.

Acquiring Alexion would mark another attempt from Roche. The company wanted to diversify its product as strings of failure sprung out from its own research operation. It wanted to go beyond its core cancer competencies through acquisitions of big names in the industry.

According to analyst Mark Schoenebaum of ISI, some investors were concerned about the valuation. Alexion shares currently traded 32 times forecast earnings for the next 12 months. This was according to a data shown by Thomson Reuters. This was more than double Amgen Inc's 13.2 times and a premium to Biogen Idec Inc's, 24.1 times.

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