Photo: Simon Dawson/Bloomberg

Is Alexion Pharmaceuticals on the comeback trail? It seems so.

It’s been a rough two years for the maker of drugs that treat rare diseases. Since mid-2015, when Alexion (ticker: ALXN) traded above $200, shares have tumbled more than 35% on worries about the durability of its main drug Soliris, political furor over high drug prices, and the abrupt departure of its two top executives amid an investigation into sales practices.

On Thursday, Alexion announced mixed fourth-quarter results, a full-year revenue forecast that was better than many expected and a $1 billion stock buyback.

Alexion earned $1.26 per share, a penny per share above estimates. And while revenue rose 19% to $831 million, it fell short of the $836.6 million expected by Wall Street. Still, some feared worse. And Alexion has a habit of issuing conservative guidance. Moreover, it still sees revenue and per share profit growing at a double-digit clip this year. Shares fell 1.2% Thursday to $130.39.

“Once every three to four years a profitable biotech company runs into trouble, usually self-inflicted – they rarely survive as independent entities,” says Leerink analyst Geoffrey Porges. “The leverage from a growing, successful, long duration portfolio is enormous for an acquirer and $3 billion in incremental growing revenue is just too tantalizing for acquirers to pass up.”

In December, Credit Suisse estimated that Alexion could fetch as much as $197 in a takeover, which would represent a 50% gain from current levels.

Alexion is the sixth highest capitalized biotech company in the Standard & Poor’s 500. Sales totaled almost $3.1 billion last year with $2.8 billion coming from Soliris.

Two years ago, Alexion paid $8.4 billion for Synageva, a small rival in the orphan drug market. The deal has been widely panned, a criticism that gained resonance today when Alexion said it was not planning additional studies on the Synageva drug SBC-103.

But according to Leerink’s Porges, Alexion’s 2017 forecast provides reassurance about Soliris.

The company expects to earn $5 a share to $5.25 a share in 2017 on revenue of $3.4 billion to $3.5 billion. That means Alexion expects sales to rise 10% to 13%, implying an 8% rise in Soliris sales this year. Porges finds that impressive given the impact of a strong U.S. dollar and other headwinds, without which Soliris sales could grow as much as 14%.

In September, Barron’s characterized Alexion as an undervalued growth play. That proved premature (to be charitable). Over the next three months, the stock fell as the company weathered an investigation into sales practices, a delayed SEC filing, and the sudden departure of CEO David Hallal and CFO Vikas Sinha.

The key question facing Alexion, however, is ALXN1210, an experimental drug now in late-stage clinical trials. Setbacks or disappointments with the drug could send shares even lower. But given the current risk and reward profile of the stock, we remain bullish.