Alexion Pharmaceuticals, Inc. ALXN posted fourth-quarter 2017 adjusted earnings of $1.48 per share which were higher than the year-ago earnings of $1.26 by 17.1%. Earnings also beat the Zacks Consensus Estimate of $1.28. Strong product revenues drove the bottom line in the quarter.
Revenues rose 9.5% year over year to $909.7 million and exceeded the Zacks Consensus Estimate of $878 million. Revenues were driven by increased sales of Soliris, Strensiq and Kanuma.
Following the earnings release, shares of the company rose 0.7%. Over a year, Alexion’s share price has declined 7.3%, underperforming the industry’s gain of 1.4%.
Revenues in Detail
Soliris (paroxysmal nocturnal hemoglobinuria (“PNH”) and atypical hemolytic uremic syndrome (aHUS)) sales were up 6% to $791.9 million during the quarter driven by strong volume growth. While Strensiq (hypophosphatasia [“HPP”]) contributed $95.6 million to revenues, up 36% year over year, Kanuma (lysosomal acid lipase deficiency [LAL-D]) contributed $21.9 million (up 99%) to quarterly revenues.
Adjusted research and development (R&D) expenses were $188.6 million, up 1.3% year over year.
Adjusted selling, general and administrative (SG&A) expenses were $245.2 million, up 4.8% year over year.
Earnings per share for 2017 were $5.86, up 27% year over year.
Revenues in 2017 came in at $3.55 billion, up 15% year over year.
Alexion expects adjusted earnings per share in the range of $6.60-$6.80. It projects revenues in the range of $3.85-$3.95 billion. Revenue guidance for Soliris is expected to be in the range of $3.33-$3.40 billion. The Zacks Consensus Estimate for earnings for 2018 was $7.07 per share which is line with the guidance while for sales it was $4.06 billion which is higher than the guidance range.
The outlook assumes unfavorable Soliris revenue impact of $90 million to $110 million from ALXN1210 and other clinical trial recruitment versus prior year.
Alexion expects to incur additional restructuring and related expenses of approximately $30 million to $70 million related to the 2017 restructuring activities.
Alexion received FDA approval for label expansion of Soliris to treat patients with refractory generalized myasthenia in adults who are anti-acetylcholine receptor (AchR) antibody-positive in United States, and Japan during the fourth quarter. Further, the European Commission also approved the drug for the same indication in August 2017. The label expansion should help the company in boosting the revenues.
Currently, Alexion is evaluating Soliris in a couple of other phase III studies — PREVENT — for the treatment of relapsing neuromyelitis optica spectrum disorder. The company completed enrollment in the trail and expects to report data in mid 2018.
The company also advanced the ALXN1210 clinical development program which is being evaluated in phase III studies for the treatment of PNH and aHUS during the quarter. The company completed enrollment in the PNH trial and expects to report data from the study in the second quarter of 2018. Enrollment for aHUS is expected to be complete in the second quarter of 2018 and Alexion expects to report data from this study in the fourth quarter of 2018.
Alexion exceeded earnings estimates and sales estimates in the fourth quarter. We expect growth at Alexion to continue being driven by Soliris. In the meantime, other new products — Strensiq and Kanuma — are doing well and should boost revenues. Mention a qualitative line on 2018 guidance
We are also impressed by Alexion’s efforts to develop its pipeline, especially the label expansion efforts for Soliris and the recent approval of Soliris to treat patients with refractory generalized myasthenia in the United States, Europe and Japan.
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 carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the health care space are XOMA Corp XOMA, Exelixis EXEL and Sucampo Pharma SCMP. All of them carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
XOMA’s loss per share estimates have narrowed from 99 cents to 42 cents for 2018 in the last 60 days. The company pulled off a positive earnings surprise in one of the last four quarters, with an average beat of 47.92%. Share price of the company skyrocketed 556.9% over a year.
Exelixis’ earnings per share estimates have moved up from 72 cents to 77 cents for 2018 in the last 60 days. The company delivered positive earnings surprise in the last four quarters, with an average beat of 572.92%. Share price of the company surged 37.6% over a year.
Sucampo’s delivered a positive earnings surprise in three of the last four quarters, with an average beat of 15.63%. Share price of the company surged 55.2% over a year.
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