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

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Alexion Pharmaceuticals, Inc. (ALXN - Free Report) is scheduled to release fourth-quarter 2020 results on Feb 4, before market open.

The company has an excellent track record, having delivered a trailing four-quarter earnings surprise of 17.44%, on average. In the last reported quarter, Alexion came up with an earnings surprise of 25.1%.

Shares of the company have decreased 0.4% in the past year against the industry’s 7.8% rally.

Let’s see how things have shaped up for the quarter to be reported.

What the Zacks Model Unveils

Our proven model predicts anearnings beat for Alexion this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.

Earnings ESP: Alexion has an Earnings ESP of +12.29% as the Zacks Consensus Estimate is pegged at a profit of $2.50 and the Most Accurate Estimate at $2.81. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

Alexion’s complement franchise consists of key growth driver, Soliris, which is approved for the treatment of paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS). Soliris is also approved for the treatment of generalized myasthenia gravis in adults who are anti-acetylcholine receptor antibody-positive. It is also approved to treat neuromyelitis optica spectrum disorder.

Soliris revenues increased in the last reported quarter, a trend that most likely continued in the to-be-reported quarter. Soliris net product sales were $1,042.3 million in the third quarter of 2019, representing a 5% increase year over year.

Investors are keen to know the performance of Alexion’s long-acting C5 complement inhibitor, Ultomiris. The drug generated sales of $289.3 million in the third quarter, leading to sequential growth. Sales have most likely increased in the fourth quarter as well. The drug is also approved for the treatment of atypical aHUS to inhibit complement-mediated thrombotic microangiopathy in adult and pediatric (aged one month or older) patients. The company achieved the goal of establishing Ultomiris as the new standard of care in PNH, with more than 70% of patient conversion from Soliris in the United States.

The company expects net product reveues of Soliris and Ultomiris to be in the range of $5,000 to $5,035 million for 2020.

Under the metabolic franchise, Alexion markets Strensiq for the treatment of patients with pediatric-onset hypophosphatasia and Kanuma for addressing lysosomal acid lipase deficiency. These drugs are likely to have contributed to the top line in the fourth quarter.

Key Recent Developments

During the fourth quarter, the company announced the decision to pause further enrollment in the phase III study of Ultomiris in adults with severe COVID-19 requiring mechanical ventilation. This decision was based on the recommendation of an independent data monitoring committee, following their review of data from a pre-specified interim analysis.

In December 2020, Alexion entered into a definitive agreement with U.K.-based pharmaceutical company, AstraZeneca Plc. (AZN - Free Report) , whereby the latter will acquire the former. While Alexion has solid prospects on a standalone basis, the combination will give it a chance to globalize its portfolio further. Moreover, upon completion, Alexion’s shareholders will own 15% of the combined company. The acquisition will also enable the company to advance its deep pipeline, as Alexion has been progressing from ultra-orphan to orphan and specialty conditions. We expect the company to provide updates on the same in the fourth quarter.

Stocks That Warrant a Look

Here are some other biotech stocks with the right mix of elements to beat on earnings this time around:

Biogen Inc. (BIIB - Free Report) has an Earnings ESP of +3.86% and a Zacks Rank #3.

Clovis Oncology Inc. (CLVS - Free Report) has an Earnings ESP of +3.65% and a Zacks Rank #3.

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