UPDATE: Citigroup Initiates Coverage on Alexion Pharmaceuticals with Neutral Rating, $104 PT

In a report published Friday, Citigroup initiated coverage on Alexion Pharmaceuticals

with a Neutral rating and $104.00 price target. Citigroup noted, “Alexion's Soliris has consistently exceeded expectations since its launch. The drug has become a late stage pipeline on its own and has driven Alexion to be a very successful beat and raise story. Accordingly, Alexion is now trading at a very high P/E multiple that reflects optimistic expectations for upward EPS revisions. If history is a guide, Alexion will need to post significant upside surprises to offset the natural P/E multiple contraction that is likely ahead. While we are optimistic about Soliris' growth, we are only in-line with consensus estimates in the next 2 years. Thus, in the absence of tremendous upside we are worried that the risk/reward profile of the stock is not attractive. We also anticipate that Soliris' label expansion into AHR, MG, and NMO will take 2 years longer than expected. Our doc checks also suggest that Soliris' high price could impede adoption in NMO and MG and limit the market opportunity.” Alexion Pharmaceuticals closed on Thursday at $93.59.