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Alexion (ALXN) to Report Q1 Earnings: What's in the Cards?

Zacks Equity Research

Alexion Pharmaceuticals Ltd. ALXN is scheduled to report first-quarter 2019 results, before the market opens, on Apr 25.

The company’s shares have rallied 19.6% in the past year against the industry’s decline of 14.4%.

Let’s see how things are shaping up for this announcement.

Factors at Play

Alexion’s complement franchise consists of key growth driver, Soliris, which is approved for the treatment of two severe and ultra-rare disorders — paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS) — resulting from chronic uncontrolled activation of the complement component of the immune system.

The company continues to identify and treat a consistently high number of new patients suffering from PNH and aHUS with Soliris across its 50-country operating platform. The underlying growth of Soliris has been robust. We expect the drug to drive sales in the first quarter.

The FDA had also approved the drug for the treatment of refractory gMG in patients, who are anti-acetylcholine receptor antibody-positive. The drug was approved in Europe as well for this indication. Label expansion of the drug has boosted sales significantly.

In December 2018, the FDA approved Ultomiris for the treatment of adult patients with PNH, well ahead of its action date of Feb 18, 2019. It is the first and the only long-acting C5 complement inhibitor to receive an approval for this indication.

Approval of new drugs should further boost sales.

Under its metabolic franchise, the company markets Strensiq for the treatment of patients with pediatric-onset hypophosphatasia (HPP) and Kanuma for the treatment of patients with lysosomal acid lipase deficiency (LAL-D). These drugs are expected to boost revenues in the first quarter.

What Our Model Indicates

Our proven model does not conclusively show that Alexion is likely to beat earnings estimates in the to-be-reported quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. But that is not the case here, as you will see below.

Earnings ESP: Alexion has an Earnings ESP of -1.37% as the Zacks Consensus Estimate is pegged at a profit of $2.16 and the Most Accurate Estimate is pegged at a profit of $2.19. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Alexion Pharmaceuticals, Inc. Price and EPS Surprise

 

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

Zacks Rank: The company carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive Earnings ESP to be confident of an earnings beat.

Note that Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement are best avoided.

Stocks That Warrant a Look

Here are some large-cap pharma stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Pfizer Inc. PFE has an Earnings ESP of +0.65% and a Zacks Rank #3. The company is scheduled to release first-quarter 2019 results on Apr 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

Glaxo SmithKline plc. GSK has an Earnings ESP of +2.63% and a Zacks Rank #3. The company is scheduled to release first-quarter 2019 results on May 1.

Novo Nordisk A/S NVO has an Earnings ESP of +0.8% and a Zacks Rank #3. The company is scheduled to release its first quarter 2019 results on May 3.

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