Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

Alexion Pharmaceuticals Inc. is the latest in a long line of biopharma dealmakers to wish for a time machine. 

Its $8.4 billion acquisition of Synageva in 2015 was meant to help resolve its dependence on its leading rare-disease drug Soliris. It's not working.

Synageva's lead drug Kanuma has had a glacial launch, with just $11 million in sales in the fourth quarter. It may never reach the $1 billion in sales Alexion once projected. And its leading pipeline asset looks like a wash; Alexion announced Thursday it was pumping the brakes on developing the drug.

Alexion already feels risky, given that its CEO and CFO stepped down in December during a probe of allegedly dodgy sales practices. Its lack of a viable Soliris plan B makes it much more so. 

Room to Fall
Alexion shares have taken a beating recently, but are still risky given the company's overdependence on a single drug
Source: Bloomberg

Soliris is expected to pass $3 billion in revenue next year, but the drug is not immune to setbacks. Further sales growth may depend on extending its use, and the drug missed goals in two different trials last year.

The drug's extreme pricing -- with a list price of more than $700,000 a year for some patients  -- has attracted competitors such as Alnylam Pharmaceuticals Inc. and Omeros Corp., which may eat into its sales. Alexion is working on an improved Soliris successor drug, but it may not succeed and could face competition from other firms. 

Soliris accounted for 90-plus percent of Alexion revenue in 2016. Analysts project that share will drop to 77 percent in 2020, but that relies on optimistic forecasts for some of its other drugs. No other biopharma company with Alexion's level of revenue is even 70-percent reliant on a single product. 

The vast majority of Alexion's revenue is expected to come from Soliris for the foreseeable future
Source: Bloomberg

The company's big effort to diversify looks like an $8.4 billion disaster -- notably catastrophic even in the boom-bust world of biotech deals. Its new management needs to own up to that and make more and better bets to diversify away from Soliris. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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