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A Rare Approach Widens the Moat for This Biotech

Alexion's diversifying pipeline and focus on attractive rare-disease markets are strengthening its competitive position.


Stefan Quenneville: We think that Alexion (ALXN) is a biotech company that has a widening moat because of its broadening pipeline, which was helped by its recent acquisition of Synageva BioPharma, and its strategy to focus on attractive rare-disease markets. 

Unlike most pharma and biotech companies that are typically interested in diseases that affect a lot of people like diabetes or asthma, Alexion focuses on rare and severe afflictions that only impact a few thousand people globally. So, while rare diseases makes it sound like a small opportunity, this is actually an area with some of the strongest pricing power in the drug industry, particularly for very effective drugs that treat serious chronic disorders. Rare-disease markets also tend to have less competition and a more welcoming regulatory pathway. 

Stefan Quenneville, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.