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Alexion (ALXN) to Report Q3 Earnings: What's in the Cards?

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Zacks Equity Research
·5 min read
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Alexion Pharmaceuticals, Inc. ALXN is scheduled to release third-quarter 2020 results on Oct 29, before market open.

The company has an excellent track record, delivering an earnings beat in the trailing four quarters by 14.18%, on average. In the last reported quarter, Alexion came up with an earnings surprise of 21.96%.

Shares of the company have increased 9.3% in the year so far against the industry’s decline of 3.3%.

Let’s see how things are shaping up for the quarter to be reported.

Factors at Play

Alexion’s complement franchise consists of key growth driver, Soliris, which is approved for the treatment of paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS). Soliris is also approved for the treatment of generalized myasthenia gravis (gMG) in adults who are anti-acetylcholine receptor (AChR) antibody-positive. It is also approved to treat neuromyelitis optica spectrum disorder (NMOSD).

Soliris revenues declined in the last reported quarter, a trend that most likely continued in the to-be-reported quarter. The company witnessed accelerated conversion from Soliris to Ultomiris during the second quarter and expects the same to have continued in the third quarter.

Investors will be keen to know the performance of Alexion’s long-acting C5 complement inhibitor, Ultomiris. Notably, the drug generated sales of $251.1million in the second quarter, leading to sequential growth. Sales have most likely increased in the third quarter as well. The drug is also approved for the treatment of atypical aHUS to inhibit complement-mediated thrombotic microangiopathy (TMA) in adult and pediatric (aged one month or older) patients. The company achieved its goal of establishing Ultomiris as the new standard of care in PNH with more than 70% of patient conversion from Soliris in the United States. The trend is likely to have continued in the third quarter.

A phase III, randomized, controlled trial of Ultomiris in adults with COVID-19 who are hospitalized with severe pneumonia or acute respiratory distress syndrome is underway. We expect the company to provide updates on the same when reports the quarterly results.

Under its metabolic franchise, Alexion markets Strensiq for the treatment of patients with pediatric-onset hypophosphatasia (HPP) and Kanuma for addressing lysosomal acid lipase deficiency (LAL-D). These drugs are likely to have contributed to the top-line as well in the third quarter.

In July 2020, the company completed the acquisition of Portola Pharmaceuticals, Inc. The acquisition added Factor Xa inhibitor reversal agent,Andexxa [coagulation factor Xa (recombinant), inactivated-zhzo], marketed as Ondexxya in Europe, to Alexion’s commercial portfolio. Andexxa is the first and only approved Factor Xa inhibitor reversal agent and has demonstrated transformative clinical value by rapidly reversing the anticoagulant effects of Factor Xa inhibitors, Xarelto (rivaroxaban) and Eliquis (apixaban), in severe and uncontrolled bleeding. Hence, R&D expenses are likely to have increased as well. We expect updates on the same by the company during the third-quarter earnings release.

The company plans to raise 2020 full-year revenue guidance by more than $200 million when it reports third quarter results.

Moreover, investors will be keen to know if the coronavirus pandemic has affected the demand for other marketed drugs and those in clinical studies.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Alexion this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here as you will see below.

Earnings ESP: Alexion has an Earnings ESP of -0.41%. 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 #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks That Warrant a Look

Here are some biotech stocks with the right mix of elements to beat on earnings this time around:

Alkermes Plc. ALKS has an Earnings ESP of +142.86% and a Zacks Rank #3.

Alnylam ALNY has an Earnings ESP of +4.23% and a Zacks Rank #3.  

 Amgen Inc. AMGN has an Earnings ESP of +0.01% and a Zacks Rank of 3.

Alexion Pharmaceuticals, Inc. Price and EPS Surprise

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

Alexion Pharmaceuticals, Inc. price-eps-surprise | Alexion Pharmaceuticals, Inc. Quote

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