Alexion Pharmaceuticals (ALXN) is at the top of McHugh's list. The biotechnology firm's one product, Soliris, is treating more individuals who are being diagnosed with PNH, a rare and dangerous blood disorder. The company won't have to deal with competition for about seven years, since it has an orphan drug designation from the Food and Drug Administration, and it is gaining approval to expand internationally. Researchers are also studying other applications for the drug.

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American Century's Thapar is similarly impressed by Alexion Pharmaceuticals (ALXN), which earned six cents a share in its most recent quarter, versus a loss of 75 cents a share a year earlier. Its drugs include Soliris, which treats a rare disorder called paroxysmal nocturnal hemoglobinuria, which destroys red blood cells. At $389,000 a year per patient, Soliris is hugely expensive -- but it targets a clearly defined patient base. The drug had net sales of nearly $60 million in the second quarter, up from $45.5 million in the first quarter and $9.8 million a year earlier. Regulators have approved its use in the U.S. and Europe, and it's expected to be introduced in Japan toward the end of next year. Alexion retains distribution rights in the U.S. and overseas, says Sustersic, who maintains that Soliris sales could reach at least $500 million a year.

forward PE of 49.6.

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The stock has had negative earnings, and the P/S is 147.

Aug. 16, 2007

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