Big-cap biotechs Alexion Pharmaceuticals (ALXN) and Celgene (CELG) both beat third-quarter estimates and raised guidance Thursday, but their stocks headed in opposite directions.
Alexion rose 6.4%, with its shares coming from a comparatively soft Relative Strength Rating of 56. The company also announced that the Food and Drug Administration granted "breakthrough therapy" designation for its drug candidate Alxn1101, which is in early-stage testing to treat a rare genetic disease called molybdenum cofactor deficiency type A.
The FDA created the designation last year to help speed the approval of drugs that could bring a major improvement upon existing treatments for serious conditions. So far 22 other drugs have received it, including Alexion's asfotase alfa for another rare condition called hypophosphatasia.
Currently, however, Alexion's only other approved drug is Soliris, and it raked in $400.4 million in the third quarter. That's up 36% from the year-earlier quarter and about $5 million more than analysts' consensus. Profit, excluding one-time items, rose 38% to 83 cents a share, beating estimates by 4 cents.
Alexion also added about $10 million to its full-year sales guidance, now $1.535 billion to $1.54 billion vs. $1.13 billion last year. It also added a few cents to its EPS guidance, now $3.02 to $3.04.
On the conference call discussing results, CEO Leonard Bell credited the continued rollout of Soliris for its second disease indication. Since 2007 it's been sold as a treatment for an ultra-rare condition called paroxysmal nocturnal hemoglobinuria (PNH), but over the last couple years it's been picking up approvals for atypical hemolytic uremic syndrome (aHUS), another very rare but serious condition.
On the call, Bell said U.S. patient uptake for aHUS is ramping faster than it did during the PNH rollout. The new indication is gaining traction in Europe and recently won approval in Japan.
Bell also said the company expects to file for approval of asfotase alpha in mid-2014, potentially ending Alexion's single-drug dependence.
Celgene's shares slid 1.3% to 157.96. It ranks No. 13 on the latest IBD 50, and on Monday hit an all-time high above 161.
Celgene said revenue rose 18% over the year-earlier quarter to $1.67 billion, about $30 million above consensus estimates. Profit rose 21% to $1.56 a share, beating estimates by 2 cents.
The company said full-year product sales are now expected to exceed the previously guided $6.2 billion, but didn't say by how much. Last year's sales totaled $5.51 billion. Celgene lifted and tightened its 2013 EPS range to $5.90-$5.95, but that was still a bit shy of analyst consensus of $5.98.
On a conference call to discuss results, JMP Securities analyst Michael King said guidance seemed conservative, given that the fourth quarter has traditionally been strong for Celgene.
Company Chief Financial Officer Jacqualyn Fouse said this year's Q4 is going to suffer from the entrance of a generic version of its Vidaza drug, a treatment for myelodysplastic syndromes (a group of bone-marrow diseases). She also said the firm is ramping up spending ahead of the expected launch of apremilast, a psoriasis treatment awaiting an FDA decision by the end of the first quarter.
Investors might also be put out that Celgene is pushing till next quarter the much-anticipated refiling of its lead drug Revlimid for a new indication in Europe, RBC Capital Markets analyst Michael Yee wrote in a research note Thursday. It's approved only as a relapse treatment for the blood cancer multiple myeloma, but the company aims to get it approved as a front-line treatment.
Yee said it "is not really clear" why the delay but says the firm's 2017 guidance of $12 billion in sales and $13-$14 in EPS is still "highly achievable."