Alexion Pharmaceuticals’ ALXN second-quarter 2015 earnings (including stock-based compensation expense) of $1.13 per share missed the Zacks Consensus Estimate of $1.31. Earnings were above the year-ago figure of 99 cents per share.
Including one-time items, Alexion’s earnings of 83 cents per share in the reported quarter were in line with the year-ago quarter.
Alexion’s revenues climbed 24.1% year over year in the second quarter to $636.2 million. We note that most of Alexion’s revenues are generated from Soliris sales. Net product sales surpassed the Zacks Consensus Estimate of $629 million.
Quarterly Details
Soliris sales were up 24% to $636 million driven by new patients in both the approved indications – paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS).
Operating expenses (excluding stock-based compensation expense and upfront and milestone payments related to license and collaboration deals and other special items) were on an upswing. The increase was due to a rise in research and development (R&D) expenses (37% higher) and selling, general and administrative (SG&A) expenses (21.2% higher).
2015 Outlook Revised
The company revised its 2015 outlook to include the impact of the acquisition of Synageva BioPharma Corp. The company revised its revenue guidance upward. The company expects revenues in the range of $2.6–$2.62 billion (previous guidance: $2.55–$2.6 billion). The guidance includes a negative foreign exchange translation impact of approximately 6% ($160 million). The (pre earnings) Zacks Consensus Estimate of $2.6 billion is at the low end of the guided range.
The company expects adjusted earnings per share in the range of $4.70 to $4.80 in 2015 as compared to the previous guidance of $5.60 to $5.80. The (pre earnings) Zacks Consensus Estimate is $5.29.
Our Take
Alexion’s second-quarter results were mixed with the company missing earnings estimates but beating on revenues. We expect growth at Alexion to continue to be driven by strong Soliris sales in the PNH and aHUS indications. Launch of new products Strensiq and Kanuma should boost revenues and substantially reduce the company’s dependence on Soliris for growth. Both Strensiq and Kanuma are currently under regulatory review in the U.S. The FDA has granted Breakthrough Therapy designation to the candidates. We are also impressed by Alexion’s efforts to develop its pipeline.
Alexion currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Ligand Pharmaceuticals Incorporated LGND, AmerisourceBergen Corporation ABC and Anacor Pharmaceuticals, Inc. ANAC. While Ligand carries a Zacks Rank #1 (Strong Buy), Anacor and AmerisourceBergen holds a Zacks Rank #2 (Buy).
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