Alexion (ALXN) to Report Q4 Earnings: What’s in the Cards?

Alexion Pharmaceuticals Ltd. ALXN is scheduled to report fourth-quarter 2018 results, before the market opens, on Feb 4.

Alexion’s shares have increased 1.7% in the past year, against the industry’s decline of 21.3%.

Let’s see how things are shaping up for this announcement.

Factors in Play

Alexion’s complement franchise consists of key growth driver, Soliris, approved for the treatment of two severe and ultra-rare disorders resulting from chronic uncontrolled activation of the complement component of the immune system — paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS).

Alexion continues to identify and treat a consistently high number of new patients with PNH and aHUS with Soliris across its 50-country operating platform. The underlying growth of Soliris has been robust. We expect Soliris to drive sales in the fourth quarter.

In order to further increase the commercial potential of the drug, Alexion is working on expanding Soliris’ label into additional indications. The FDA had also approved the drug for the treatment of refractory gMG in patients who are anti-acetylcholine receptor antibody-positive. The drug was approved in Europe as well for this indication. Label expansion should further boost sales for the drug.

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 fourth quarter.

Alexion is looking to diversify its portfolio and reduce its dependence on its blockbuster drug, Soliris. In May 2018, Alexion acquired Sweden-based biopharmaceutical company, Wilson Therapeutics AB. The acquisition added a late-stage candidate, WTX101 to the company’s pipeline. The candidate is currently in phase III for the treatment of Wilson disease, a rare genetic disorder.

Alexion’s efforts to develop its pipeline are impressive. Recently, the company announced that the phase III study of its long-acting C5 complement inhibitor Ultomiris (ravulizumab-cwvz/ALXN1210), conducted in complement inhibitor-naive patients with atypical hemolytic uremic syndrome (aHUS), met its primary objective of complete thrombotic microangiopathy (TMA) response. The company plans to file regulatory submission in the United States in the first half of 2019, followed by similar applications in the European Union and Japan.

Last month, the FDA approved Ultomiris for the treatment of adult patients with PNH, well ahead of its action date of Feb 18, 2019. Ultomiris is the first and the only long-acting C5 complement inhibitor to get an approval for this indication.

Alexion is also conducting a phase I study of subcutaneous ALXN1210, co-administered with Halozyme Therapeutics, Inc.’s HALO ENHANZE drug-delivery technology, PH20. Pending the co-formulation data, this next-generation subcutaneous formulation will be called ALXN1810 and has potential to further extend the dosing interval to once every two weeks or once a month.

We expect updates on the candidate in fourth-quarter earnings call.

Stocks That Warrant a Look

Here are some health care 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. According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. Zacks Rank #4 or #5 (Strong Sell) stocks are best avoided.

Regeneron Pharmaceuticals Inc. REGN has an Earnings ESP of +6.80% and a Zacks Rank #3. The company is scheduled to release fourth-quarter report on Feb 6.

Bausch Health Cos Inc. BHC has an Earnings ESP of +6.08% and a Zacks Rank #2. The company is scheduled to release fourth-quarter results on Feb 20.

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