Early Thursday brought a bonanza of Q2 biotech earnings, led by IBD 50 stocks Biogen Idec, Celgene and Alexion Pharmaceuticals, which all reported substantial beats.
Then after the close, Gilead Sciences (GILD) added to the party. Its Q2 met flat earnings estimates of 50 cents a share, but sales rose 15% to $2.77 billion, more than $100 million above consensus. Gilead shares jumped 5% in late trading, after hitting a record high during the regular session.
Wall Street was especially interested in Biogen's (BIIB) report since it was the first quarter after the launch of Tecfidera, its potential blockbuster multiple-sclerosis pill. The wait was rewarded as the company reported $192 million in revenue from the drug, trouncing analysts' estimate of $70 million. Analyst Mark Schoenebaum of ISI Group said in an email to clients that buy-side analysts that he polled had expected $90 million to $100 million.
Overall sales rose 21% to $1.72 billion — $100 million above consensus. Earnings rose 26% to $2.30 a share, hammering estimates of $1.93.
Biogen also raised its 2013 sales growth guidance to 22%-23%, topping consensus of 20%. EPS guidance of $8.25-$8.50 was also above the range and represents at least 26% growth over last year.
The only fly in the ointment was that, on the conference call with analysts, executives said Tecfidera's launch in the European Union was taking longer than expected. The drug has already been approved there, but Biogen has been in talks with regulators about whether it's sufficiently novel to get 10 years of exclusivity from competition (a separate issue from patent exclusivity). The company had said in May that it expected this to be resolved by year-end, but implied Thursday it might take longer.
"(S)uggested visibility still unclear so this will be a binary event," wrote RBC Capital Markets analyst Michael Yee in a research note. "If they don't get exclusivity, stock may fall to $200 and would be buying opportunity as it's only a 10-15% EPS hit.
Biogen shares rose as much as 3.5% but ended up a fraction.
Celgene (CELG) didn't have such nail-biting drama, but it did offer a nice quarter of growth for its main product Revlimid as well as a couple of launches. Total sales rose 17% to $1.56 billion — $67 million above consensus. Profit rose 25% to $1.52 a share, beating estimates by 8 cents. The stock, already buoyed by data earlier this month supporting Revlimid as a first-line cancer treatment, hit another new high before closing up 3.4% at 140.65.
Celgene also lifted its full-year guidance. It added 25 cents to its EPS forecast, now $5.80-$5.90, up around 19%. The firm sees 15% revenue growth to $6.2 billion, about $200 million more than previously expected.
Alexion (ALXN) also beat estimates but its stock fell 2%, possibly due to dimming prospects for a buyout. This month, Bloomberg News reported that Roche (RHHBY) was seeking funding to buy Alexion. But on the Swiss drug giant's own conference call Thursday, CEO Severin Schwan said he is not seeking a "big mega-merger acquisition" and will focus on bolt-ons. With a market cap of nearly $21 billion, Alexion would be a pretty big bolt-on.
In the meantime, Alexion's Q2 profit jumped 56% to 73 cents a share, beating estimates by 5 cents. Sales rose 35% to $370 million. The firm both lifted and narrowed its 2013 guidance range, which now calls for earnings of $2.87-$2.97 a share, with sales of $1.52 billion to $1.53 billion.