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Alexion (ALXN) to Report Q2 Earnings: What's in the Cards?

Zacks Equity Research

Alexion Pharmaceuticals Ltd. ALXN is scheduled to report second-quarter 2019 results, before the market opens, on Jul 24.

In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 9.13%. Moreover, Alexion’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average positive surprise being 16%.

The company’s shares have rallied 24% year to date compared with the industry’s growth of 0.2%.

What Our Model Indicates

Our proven model shows that Alexion is likely to beat earnings estimates in the to-be-reported quarter. This is because a stock needs to have — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — to be able to beat estimates.

Earnings ESP: Alexion has an Earnings ESP of +3.10% as the Zacks Consensus Estimate is pegged at $2.36 and the Most Accurate Estimate is pegged at $2.44. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #1, which increases the predictive power of ESP.

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

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 the drug has been robust. We expect the drug to continue driving sales in the second quarter.

Alexion is looking to expand Soliris’ label. The FDA, in June, approved Soliris to treat neuromyelitis optica spectrum disorder (NMOSD), based on positive data from the phase III study, PREVENT. The drug is under review for the same in Europe and Japan. Label expansion into additional indications would give Soliris access to a higher patient population and increase the commercial potential of the drug significantly.

In December 2018, The FDA approved Alexion’s long-acting C5 complement inhibitor, Ultomiris, for the treatment of adult patients with PNH, to be administered every eight weeks. The company launched the drug in the United States, ahead of schedule. At the first-quarter earnings call, management had said that the launch of Ultomiris has been strong. The drug recorded revenues of $24.6 million in the first quarter.  

Sales are expected to be higher in the second quarter. Meanwhile, Ultomiris was approved in Japan in June and in the EU earlier this month. However, these will not contribute to sales in the second quarter.

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 drive revenues in the second quarter.

Alexion also has an impressive pipeline. It has completed dosing in a phase I study of subcutaneous ALXN1210 co-administered with Halozyme's HALO ENHANZE drug-delivery technology, PH20. Pending co-formulation data, this next-generation subcutaneous formulation will be called ALXN1810. Alexion plans to initiate a first-in-human study of ALXN1720, a novel anti-C5 albumin-binding bi-specific mini-body that binds and prevents activation of human C5, later this year. We expect the company to provide updates on the pipeline when it reports second-quarter 2019 results.

Alexion Pharmaceuticals, Inc. Price and Consensus

Alexion Pharmaceuticals, Inc. Price and Consensus

Alexion Pharmaceuticals, Inc. price-consensus-chart | Alexion Pharmaceuticals, Inc. Quote

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.

Gilead Sceinces Inc. GILD has an Earnings ESP of +3.69% and a Zacks Rank #3. The company is scheduled to release second-quarter 2019 results on Jul 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

Regeneron Pharmaceuticals, Inc. REGN has an Earnings ESP of +5.76% and a Zacks Rank #3. The company is scheduled to release second-quarter 2019 results on Aug 6.

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