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Alexion (ALXN) Q1 Earnings Beat Estimates, Guidance Raised

Zacks Equity Research

Alexion Pharmaceuticals, Inc. ALXN posted first-quarter 2019 adjusted earnings of $2.39 per share, which increased 42.3% from the year-ago quarter’s $1.68. Earnings also beat the Zacks Consensus Estimate of $2.19. Strong product revenues drove the bottom line in the quarter.

Revenues rose 22.6% year over year to $1.140 billion and exceeded the Zacks Consensus Estimate of $1.112 billion. Revenues were driven by increased sales of Soliris, Strensiq and Kanuma.  

Alexion’s shares have increased 22.7% in the past year against the industry’s decline of 12.4%. 

Revenues in Detail

Soliris (paroxysmal nocturnal hemoglobinuria [“PNH”] and atypical hemolytic uremic syndrome [aHUS]) sales were up 20% to $962 million in the reported quarter, driven by strong volume growth. While Strensiq (hypophosphatasia [“HPP”]) revenues were $130.1 million (up 18% year over year), Kanuma (lysosomal acid lipase deficiency [LAL-D]) contributed $23.5 million (up 20%) to quarterly revenues.

Cost Summary

Adjusted research and development (R&D) expenses were $159.4 million, down 1.4% year over year.

Adjusted selling, general and administrative (SG&A) expenses were $243.7 million, up 10.6% year over year.

2019 Guidance

Alexion raised its revenue and earnings guidance for 2019. The company expects earnings per share to be $9.25-$9.45, up from the previous guidance of $9.10-$9.30. Alexion projects revenues of$4.68-$4.75 billion, up from the prior outlook of $4.63-$4.70 billion. The Zacks Consensus Estimate for earnings is pegged at $9.31 and for sales at $4.75 billion.

Revenues for Soliris and Ultomiris are expected to be $4.02-$4.07 billion, up from $3.97-$4.02 billion guided previously.

Pipeline Update

In February 2019, the FDA grantedpriority review to Soliris in Neuromyelitis Optica Spectrum Disorder (NMOSD)indication and set an action date of Jun 28, 2019. Alexion has submitted applications in the European Union (EU) and Japan. Soliris has been granted Orphan Drug priority review in Japan. 

In December 2018, the FDA approved Ultomiris for adults with Paroxysmal Nocturnal Hemoglobinuria (PNH). The company strongly launched the drug in the United States for the same indication. Applications for approval in the EU and Japan are currently under review. A phase III study of Ultomiris in children and adolescents with PNH is currently underway.

In April 2019, Alexion submitted an application in the United States for the approval of Ultomiris in patients with Atypical Hemolytic Uremic Syndrome (aHUS). The company plans to file for regulatory approval in the EU and Japan in 2019. Further, a phase III study of Ultomiris in adolescents and children with aHUS is underway.

In the first quarter of 2019, Alexion initiated a phase III study of the drug in generalized Myasthenia Gravis (gMG).

Also, the company plans to initiate a phase III study of the drug in NMOSD by the end of 2019.

Moreover, Alexion plans to initiate a proof-of-concept study for Ultomiris in Amyotrophic Lateral Sclerosis (ALS) and an exploratory clinical studyin Primary Progressive Multiple Sclerosis (PPMS).

The company is enrolling and dosing a phase III study of ALXN1840 (WTX101) in Wilson disease, a rare genetic disorder with devastating hepatic and neurological consequences. 

Alexion topped earnings and sales estimates in the first quarter of 2019. We expect Soliris to continue driving growth. In the meantime, other new products — Strensiq and Kanuma — are doing well and likely to boost revenues. The company also launched Ultomiris in the United States for the treatment of PNH. The FDA set an action date of Jun 28, 2019 for Soliris for the treatment of NMOSD and granted priority review to the same. A potential approval will boost sales for the company.

 

Alexion Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

 

Alexion Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | Alexion Pharmaceuticals, Inc. Quote

Zacks Rank & Stocks to Consider

Alexion currently is a Zacks Rank #3 (Hold) stock.

Some better-ranked stocks worth considering are Ani Pharmaceuticals, Inc. ANIP Celsion Corporation CLSN and Arcus Biossciences Inc. RCUS. All of them carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ani Pharmaceuticals’ earnings per share estimates have increased from $5.90 to $5.97 for 2019 and from $6.58 to $6.62 for 2020 in the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with average beat of 2.30%.

Celsion’ loss per share estimates have narrowed from 94 cents to 78 cents for both 2019 and 2020 in the past 60 days.

Arcus Biosciences’ loss per share estimates have narrowed from $1.93 to $1.67 for 2019 and from $2.06 to $1.84 for 2020 in the past 60 days.

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