It has been more than a month since the last earnings report for Alexion Pharmaceuticals, Inc. . Shares have lost about 14.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Alexion Tops Earnings, Lags Sales, Ups 2017 View
Alexion posted third-quarter 2017 adjusted earnings of $1.44 per share which was higher than the year ago earnings of $1.23 by 17.1%. Earnings also beat the Zacks Consensus Estimate of $1.13. Strong product revenues drove the bottom-line in the quarter.
Revenues rose 8% year over year to $859 million, but slightly missed the Zacks Consensus Estimate of $869 million. Revenues were driven by increased sales of Soliris, Strensiq and Kanuma. However, sales declined sequentially by 5.8% as the order were shifted from the third to the second quarter of 2017 thus impacting the third quarter sales. The company benefitted by favorable timing of orders in the preceding quarter directly impacted sales growth in the third quarter. Negative impact of currency headwind on the top line was less than 1% ($5 million).
Revenue in Detail
Soliris (paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS)) sales were up 4% to $756 million during the quarter driven by strong volume growth. While Strensiq (hypophosphatasia (HPP)) contributed $87 million to revenues, up 44% year over year, Kanuma (lysosomal acid lipase deficiency (LAL-D)) contributed $16 million (up 79%) to quarterly revenues.
Cost Summary
Research and Development (R&D) expenses (excluding stock based compensation) were $175 million, down 2.2% year over year.
Selling, general and administrative (SG&A) expenses (excluding stock based compensation) were $230 million, up 14.4% year over year.
2017 Guidance
Alexion increased] earnings guidance for 2017. The company expects adjusted earnings per share to be in the range of $5.50 to $5.65 up from its previous expectation of $5.40 to $5.55.
Meanwhile, the company also raised the lower end of the total revenue guidance, It projects revenues to be in the range of $3.475 to $3.525 billion versus prior expectation of $3.45 to $3.53 billion. In fact, revenue guidance for Soliris was also tightened to a range of $3.09-$3.13 billion from the previous expectation of $3.07-$3.13 billion.
Pipeline Update
In October 2017, 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. Further, the European Commission also approved the drug for the same indication in Augsust 2017. The label expansion should help the company in boosting the revenues.
In August 2017, the company also strengthened its patent portfolio with three new United States’ patents for Soliris that extend protection into 2027.
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 study earlier this year and will report data in mid 2018.
The company also advanced the ALXN1210 clinical development programs which is being evaluated in phase III studies for the treatment of PNH and aHUS in the third quarter.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. In the past month, the consensus estimate has shifted lower by 12% due to these changes.
VGM Scores
Currently, Alexion's stock has an average Growth Score of C, however its Momentum is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for momentum investors than those looking for value and growth.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
Image: Bigstock
Alexion (ALXN) Down 14.6% Since Earnings Report: Can It Rebound?
It has been more than a month since the last earnings report for Alexion Pharmaceuticals, Inc. . Shares have lost about 14.6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Alexion Tops Earnings, Lags Sales, Ups 2017 View
Alexion posted third-quarter 2017 adjusted earnings of $1.44 per share which was higher than the year ago earnings of $1.23 by 17.1%. Earnings also beat the Zacks Consensus Estimate of $1.13. Strong product revenues drove the bottom-line in the quarter.
Revenues rose 8% year over year to $859 million, but slightly missed the Zacks Consensus Estimate of $869 million. Revenues were driven by increased sales of Soliris, Strensiq and Kanuma. However, sales declined sequentially by 5.8% as the order were shifted from the third to the second quarter of 2017 thus impacting the third quarter sales. The company benefitted by favorable timing of orders in the preceding quarter directly impacted sales growth in the third quarter. Negative impact of currency headwind on the top line was less than 1% ($5 million).
Revenue in Detail
Soliris (paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS)) sales were up 4% to $756 million during the quarter driven by strong volume growth. While Strensiq (hypophosphatasia (HPP)) contributed $87 million to revenues, up 44% year over year, Kanuma (lysosomal acid lipase deficiency (LAL-D)) contributed $16 million (up 79%) to quarterly revenues.
Cost Summary
Research and Development (R&D) expenses (excluding stock based compensation) were $175 million, down 2.2% year over year.
Selling, general and administrative (SG&A) expenses (excluding stock based compensation) were $230 million, up 14.4% year over year.
2017 Guidance
Alexion increased] earnings guidance for 2017. The company expects adjusted earnings per share to be in the range of $5.50 to $5.65 up from its previous expectation of $5.40 to $5.55.
Meanwhile, the company also raised the lower end of the total revenue guidance, It projects revenues to be in the range of $3.475 to $3.525 billion versus prior expectation of $3.45 to $3.53 billion. In fact, revenue guidance for Soliris was also tightened to a range of $3.09-$3.13 billion from the previous expectation of $3.07-$3.13 billion.
Pipeline Update
In October 2017, 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. Further, the European Commission also approved the drug for the same indication in Augsust 2017. The label expansion should help the company in boosting the revenues.
In August 2017, the company also strengthened its patent portfolio with three new United States’ patents for Soliris that extend protection into 2027.
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 study earlier this year and will report data in mid 2018.
The company also advanced the ALXN1210 clinical development programs which is being evaluated in phase III studies for the treatment of PNH and aHUS in the third quarter.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. In the past month, the consensus estimate has shifted lower by 12% due to these changes.
Alexion Pharmaceuticals, Inc. Price and Consensus
Alexion Pharmaceuticals, Inc. Price and Consensus | Alexion Pharmaceuticals, Inc. Quote
VGM Scores
Currently, Alexion's stock has an average Growth Score of C, however its Momentum is doing a bit better with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Based on our scores, the stock is more suitable for momentum investors than those looking for value and growth.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.