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Alexion's (ALXN) Earnings Beat Estimates in Q3, Guidance Up
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Alexion Pharmaceuticals, Inc. posted third-quarter 2018 adjusted earnings of $2.02 per share, which came in higher than the year-ago earnings of $1.44 by 40.3%. Earnings also beat the Zacks Consensus Estimate of $1.75. Strong product revenues drove the bottom line in the quarter.
Revenues rose 19.5% year over year to $1.026 billion and marginally missed the Zacks Consensus Estimate of $1.028 billion. Revenues were driven by increased sales of Soliris, Strensiq and Kanuma.
Year to date, Alexion’s shares have increased 2.8%, against the industry’s fall of 15.8%.
Revenues in Detail
Soliris (paroxysmal nocturnal hemoglobinuria (“PNH”) and atypical hemolytic uremic syndrome (aHUS) sales were up 17.6% to $888 million in the reported quarter, driven by strong volume growth. While Strensiq (hypophosphatasia [“HPP”]) contributed $113.2 million to revenues, up 30% year over year, Kanuma (lysosomal acid lipase deficiency [LAL-D]) contributed $25.3 million (up 54%) to quarterly revenues.
Cost Summary
Adjusted research and development (R&D) expenses were $162.3 million, down 7.6% year over year.
Adjusted selling, general and administrative (SG&A) expenses were $224.5 million, up 2% year over year.
2018 Guidance
The company raised its earnings per share and revenue guidance for 2018. It expects earnings per share to be $7.45-$7.60, up from the previous forecast of $7.00-$7.15. Alexion projects revenues of $4.02-$4.05 billion, up from its previous expectation of $3.98-$4.01 billion. The Zacks Consensus Estimate for earnings for 2018 was pegged at $7.23, while for sales it was $4.06 billion.
Revenues for Soliris are expected in the $3.46-$3.48 billion range compared with 3.42-$3.44 billion estimated earlier.
The outlook assumes unfavorable Soliris revenue impact of $90 million to $110 million from ALXN1210 and other clinical trial recruitment versus the prior year.
Pipeline Update
The application for Ultomiris (ALXN1210) in adults with PNH is currently under review in the United States, Europe and Japan. The FDA has set an action date of Feb 18, 2019. In September 2018, Ultomiris was granted Orphan Drug Designation in Japan. Further, a phase III study of Ultomiris in children and adolescents with PNH is currently ongoing.
Enrollment of ALXN1210 in phase III study administered intravenously every eight weeks in complement inhibitor treatment-naïve adolescent and adult patients with aHUS is complete and Alexion expects to report data from this study in early 2019. The company expects to file for regulatory approval in aHUS following approval in PNH. A phase III study of ALXN1210 in children with aHUS is currently underway.
In late 2018, Alexion plans to initiate a single, PK-based phase III study of ALXN1210 delivered subcutaneously, once per week, to support registration in PNH and aHUS.
During the quarter, the company initiated a phase I study of subcutaneous ALXN1210 co-administered with Halozyme Therapeutics, Inc.’s(HALO - Free Report) ENHANZE drug-delivery technology, PH20. Pending co-formulation data, this next-generation subcutaneous formulation will be called ALXN1810, and has the potential to further extend the dosing interval to once every two weeks or once per month.
In September 2018, Alexion announced positive results from the phase III PREVENT study, in which patients with anti-aquaporin-4 (AQP4) auto antibody-positive relapsing neuromyelitis optica spectrum disorder (NMOSD)received eculizumab or placebo on top of stable standard-of-care therapy. The study met its primary endpoint of time to first adjudicated on-trial relapse, demonstrating that treatment with eculizumab reduced the risk of relapse by 94.2% compared to placebo. The company is rapidly preparing regulatory submissions in the United States, EU and Japan, and expects to submit applications in early 2019.
The company is also enrolling patients in a phase III study of WTX101 in Wilson disease.
Acquisition
During the third quarter, the company inked a deal toacquire Syntimmune for $1.2 billion. Syntimmune develops antibody therapeutics, targeting the neonatal Fc receptor (FcRn). The acquisition will add a mid-stage candidate, SYNT001 to Alexion’s pipeline. The candidate is currently being evaluated in phase Ib/IIa studies, in patients with warm autoimmune hemolytic anemia (WAIHA) and in patients with pemphigus vulgaris (PV) or pemphigus foliaceus (PF). The acquisition will further diversify Alexion’s rare diseases pipeline. It should be a strategic fit with the company’s existing rare diseases franchises and will enable the company to provide treatments of diseases like warm autoimmune hemolytic anemia, where SYNT001 is the first, and currently the only anti-FcRn therapy in clinical development.
Our Take
Alexion exceeded earnings and marginally missed sales estimates in the third quarter of 2018. We expect Soliris to continue driving the company’s growth. In the meantime, other new products — Strensiq and Kanuma — are doing well and will boost revenues.
We are also impressed by Alexion’s efforts to develop its pipeline and its application for Ultomirisis under review in the United States, EU and Japan. The company The company also completed the acquisition of Wilson Therapeutics to begin rebuilding the clinical pipeline. The company entered into an agreement to acquire Syntimmune in order to further diversify its rare diseases pipeline
Alexion Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
CRISPR Therapeutics’ loss per share estimates have narrowed from $2.95 to $2.92 for 2018 over the past 60 days. The company delivered a positive earnings surprise in two of the trailing four quarters with an average beat of 19.50%. Share price of the company has increased 49.1% year to date
Gilead’s earnings per share estimates have moved up from $6.58 to $6.63 for 2018 and from $6.48 to $6.58 for 2019 in the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters with an average beat of 6.43%.
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Alexion's (ALXN) Earnings Beat Estimates in Q3, Guidance Up
Alexion Pharmaceuticals, Inc. posted third-quarter 2018 adjusted earnings of $2.02 per share, which came in higher than the year-ago earnings of $1.44 by 40.3%. Earnings also beat the Zacks Consensus Estimate of $1.75. Strong product revenues drove the bottom line in the quarter.
Revenues rose 19.5% year over year to $1.026 billion and marginally missed the Zacks Consensus Estimate of $1.028 billion. Revenues were driven by increased sales of Soliris, Strensiq and Kanuma.
Year to date, Alexion’s shares have increased 2.8%, against the industry’s fall of 15.8%.
Revenues in Detail
Soliris (paroxysmal nocturnal hemoglobinuria (“PNH”) and atypical hemolytic uremic syndrome (aHUS) sales were up 17.6% to $888 million in the reported quarter, driven by strong volume growth. While Strensiq (hypophosphatasia [“HPP”]) contributed $113.2 million to revenues, up 30% year over year, Kanuma (lysosomal acid lipase deficiency [LAL-D]) contributed $25.3 million (up 54%) to quarterly revenues.
Cost Summary
Adjusted research and development (R&D) expenses were $162.3 million, down 7.6% year over year.
Adjusted selling, general and administrative (SG&A) expenses were $224.5 million, up 2% year over year.
2018 Guidance
The company raised its earnings per share and revenue guidance for 2018. It expects earnings per share to be $7.45-$7.60, up from the previous forecast of $7.00-$7.15. Alexion projects revenues of $4.02-$4.05 billion, up from its previous expectation of $3.98-$4.01 billion. The Zacks Consensus Estimate for earnings for 2018 was pegged at $7.23, while for sales it was $4.06 billion.
Revenues for Soliris are expected in the $3.46-$3.48 billion range compared with 3.42-$3.44 billion estimated earlier.
The outlook assumes unfavorable Soliris revenue impact of $90 million to $110 million from ALXN1210 and other clinical trial recruitment versus the prior year.
Pipeline Update
The application for Ultomiris (ALXN1210) in adults with PNH is currently under review in the United States, Europe and Japan. The FDA has set an action date of Feb 18, 2019. In September 2018, Ultomiris was granted Orphan Drug Designation in Japan. Further, a phase III study of Ultomiris in children and adolescents with PNH is currently ongoing.
Enrollment of ALXN1210 in phase III study administered intravenously every eight weeks in complement inhibitor treatment-naïve adolescent and adult patients with aHUS is complete and Alexion expects to report data from this study in early 2019. The company expects to file for regulatory approval in aHUS following approval in PNH. A phase III study of ALXN1210 in children with aHUS is currently underway.
In late 2018, Alexion plans to initiate a single, PK-based phase III study of ALXN1210 delivered subcutaneously, once per week, to support registration in PNH and aHUS.
During the quarter, the company initiated a phase I study of subcutaneous ALXN1210 co-administered with Halozyme Therapeutics, Inc.’s (HALO - Free Report) ENHANZE drug-delivery technology, PH20. Pending co-formulation data, this next-generation subcutaneous formulation will be called ALXN1810, and has the potential to further extend the dosing interval to once every two weeks or once per month.
In September 2018, Alexion announced positive results from the phase III PREVENT study, in which patients with anti-aquaporin-4 (AQP4) auto antibody-positive relapsing neuromyelitis optica spectrum disorder (NMOSD)received eculizumab or placebo on top of stable standard-of-care therapy. The study met its primary endpoint of time to first adjudicated on-trial relapse, demonstrating that treatment with eculizumab reduced the risk of relapse by 94.2% compared to placebo. The company is rapidly preparing regulatory submissions in the United States, EU and Japan, and expects to submit applications in early 2019.
The company is also enrolling patients in a phase III study of WTX101 in Wilson disease.
Acquisition
During the third quarter, the company inked a deal toacquire Syntimmune for $1.2 billion. Syntimmune develops antibody therapeutics, targeting the neonatal Fc receptor (FcRn). The acquisition will add a mid-stage candidate, SYNT001 to Alexion’s pipeline. The candidate is currently being evaluated in phase Ib/IIa studies, in patients with warm autoimmune hemolytic anemia (WAIHA) and in patients with pemphigus vulgaris (PV) or pemphigus foliaceus (PF). The acquisition will further diversify Alexion’s rare diseases pipeline. It should be a strategic fit with the company’s existing rare diseases franchises and will enable the company to provide treatments of diseases like warm autoimmune hemolytic anemia, where SYNT001 is the first, and currently the only anti-FcRn therapy in clinical development.
Our Take
Alexion exceeded earnings and marginally missed sales estimates in the third quarter of 2018. We expect Soliris to continue driving the company’s growth. In the meantime, other new products — Strensiq and Kanuma — are doing well and will boost revenues.
We are also impressed by Alexion’s efforts to develop its pipeline and its application for Ultomirisis under review in the United States, EU and Japan. The company The company also completed the acquisition of Wilson Therapeutics to begin rebuilding the clinical pipeline. The company entered into an agreement to acquire Syntimmune in order to further diversify its rare diseases pipeline
Alexion Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Alexion Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | Alexion Pharmaceuticals, Inc. Quote
Zacks Rank and Other Stocks to Consider
Alexion carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the biotech sector are CRISPR Therapeutics AG (CRSP - Free Report) and Gilead Sciences, Inc. (GILD - Free Report) . Both of them sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CRISPR Therapeutics’ loss per share estimates have narrowed from $2.95 to $2.92 for 2018 over the past 60 days. The company delivered a positive earnings surprise in two of the trailing four quarters with an average beat of 19.50%. Share price of the company has increased 49.1% year to date
Gilead’s earnings per share estimates have moved up from $6.58 to $6.63 for 2018 and from $6.48 to $6.58 for 2019 in the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters with an average beat of 6.43%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>