Alexion Pharmaceuticals, Inc. has finally announced the filing of its Form 10-Q with the Securities and Exchange Commission for the three quarters ended Sep 30, 2016. Shares of the company gained approximately 5% on Jan 4, during the after-hours trading session.

Shares of Alexion have underperformed the Zacks classified Medical-Biomedical and Genetics industry in the last one year. Particularly, the stock has lost 30.9% during this period, while the industry witnessed a decline of 21.3%.

In Nov 2016, Alexion had disclosed that there will be a delay in the filing of the company’s 10-Q as the Audit and Finance Committee was conducting an investigation into allegations made by a former employee regarding its sales practices involving its key drug, Soliris.

The Audit and Finance Committee concluded that it did not find any reason that would require the company to restate its previously issued financial results. Additionally, the investigation did not establish any occurrence of improper revenue recognition associated with “pull-in” sales of Soliris. This implied that all Soliris orders were valid and placed by customers for patients in order to fulfill an actual need. Moreover, there was no case where Soliris was sold to build up a stock of unwanted products.

However, the investigation did find a “material weakness” in the company’s internal controls over financial reporting as of Dec 31, 2015 and subsequent quarters. This was attributed to the senior management failing to set a proper tone at the top for an effective control environment.

Alexion has already commenced a series of remedial actions to maintain a strong internal control environment, including expanded training programs and new processes related to financial reporting, controls and compliance. Combining other process and procedure changes, management expects the material weakness to be effectively remediated in 2017.

Therefore, after evaluating the findings of the investigation, management, including the company’s new Interim Chief Executive Officer (CEO) and new Chief Financial Officer (CFO), have concluded that the consolidated financial statements included in the 10-Q present fairly, in all material respects, the company’s financial position, results of operations and cash flows for the period stated.

We remind investors that shares of Alexion touched a 52-week low last month after the company announced the sudden departure of the former CEO David Hallal and CFO Vikas Sinha from the company. While David Hallal resigned for personal reasons, Vikas Sinha left Alexion to pursue other opportunities. However, the timing of their resignations did raise suspicions.

In addition to the 10-Q for the third quarter of 2016, the company plans to file an Amended Form 10-K for the year ended Dec 31, 2015 this month to reflect that its disclosure controls and procedures were not effective as of that date, and that a material weakness existed. However, it will not require to make a restatement of the previously reported financial results.

2016 Outlook Affirmed

Alexion reiterated its outlook for 2016, providing much needed respite to investors. The company expects earnings within the previously guided range of $4.50 to $4.65 per share in 2016. Revenues are also anticipated to be within the previously guided range of $3.05 to $3.10 billion.

The Zacks Consensus Estimate for earnings is $3.86 on revenues of $3.09 billion.

Alexion will report full-year results on Feb 16 and provide an outlook for 2017 concurrently. Meanwhile, the company plans to present at the J.P. Morgan Healthcare Conference on Jan 9.

ALEXION PHARMA Price and Consensus

Zacks Rank & Stocks to Consider

Alexion currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in this industry include Cambrex Corporation , Arena Pharmaceuticals, Inc. and Anika Therapeutics Inc. (ANIK Quick QuoteANIK - Free Report) . While Cambrex and Arena sport a Zacks Rank #1 (Strong Buy), Anika carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cambrex’s earnings estimates increased 5.2% for 2017 over the last 60 days. The company posted a positive earnings surprise in three of the four trailing quarters, with an average beat of 19.78%. Its share price was up approximately 27% in 2016.

Arena’s loss estimates for 2017 narrowed by 3% over the last 60 days. The company posted a positive surprise in three of the four trailing quarters, with an average beat of 11.43%.

Anika’s earnings estimates for 2017 were up 0.5% in the last 60 days. The company has recorded a positive earnings surprise in each of the last four quarters, the average being 33.14%. Its share price gained approximately 36% in 2016.

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