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Alexion (ALXN) Q2 Earnings Beat Estimates, Guidance Raised

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Alexion Pharmaceuticals, Inc. (ALXN - Free Report) posted second-quarter 2019 adjusted earnings of $2.64 per share, which increased 27.5% from the year-ago quarter’s $2.07. Earnings also beat the Zacks Consensus Estimate of $2.36. Strong product revenues drove the bottom line in the quarter.

Revenues rose 15.2% year over year to $1.203 billion and exceeded the Zacks Consensus Estimate of $1.174 billion. Revenues were driven by increased sales of Soliris, Strensiq and Kanuma. However, foreign currency negatively impacted revenues by 1%.

Alexion’s shares have increased 25.7% year to date compared with the industry’s growth of 0.7%. 

Revenues in Detail

Soliris (paroxysmal nocturnal hemoglobinuria [“PNH”] and atypical hemolytic uremic syndrome [aHUS]) sales were up 9.2% to $980.8 million in the reported quarter, driven by strong volume growth. Soliris net product sales for the second quarter declined $31.6 million due to a recent judicial order on the drug’s pricing in Canada.

While Strensiq (hypophosphatasia [“HPP”]) revenues were $141.3 million (up 13% year over year), Kanuma (lysosomal acid lipase deficiency [LAL-D]) contributed $26.2 million (up 22%) to quarterly revenues.

Ultomiris (ravulizumab-cwvz) net product sales were $54.2 million in the reported quarter.

Cost Summary

Adjusted research and development (R&D) expenses were $148.7 million, down 6.1% year over year.

Adjusted selling, general and administrative (SG&A) expenses were $255.8 million, up 11% year over year.

2019 Guidance

Alexion raised its revenue and earnings guidance for 2019. The company expects earnings per share to be $9.65-$9.85, up from the previous guidance of $9.25-$9.45. Alexion projects revenues of $4.75-$4.80 billion, up from the prior outlook of $4.68-$4.75 billion. The Zacks Consensus Estimate for earnings is pegged at $9.51 and for sales at $4.78 billion.

Combined revenues for Soliris and Ultomiris are expected to be $4.10-$4.13 billion,up from $4.02-$4.07 billion guided previously.

Pipeline Update

In June 2019, the FDA approved Soliris for adults with anti-aquaporin-4 (AQP4) auto antibody-positive NMOSD. Applications for approval in the European Union (EU) and Japan are under review. Alexion plans to initiate a phase III study in children and adolescents with NMOSD by the end of 2019.

Ultomiris was approved for adults with PNH in Japan in June 2019 and in the EU in July 2019. A phase III study of Ultomiris in children and adolescents with PNH is underway.

The FDA granted Priority Review to the drug for the treatment of atypical hemolytic uremic syndrome (aHUS) and set an action date of Oct 19, 2019. Alexion plans to file for regulatory approvals in the EU and Japan in the second half of the year. A phase III study of Ultomiris in children and adolescents with aHUS is underway.

Dosing is underway in a single, PK-based phase III study of Ultomirisdelivered subcutaneously once per week to support registration in PNH and aHUS. Data are expected by early 2020. Dosing is also underway in a phase III study of the drugin generalized myasthenia gravis (gMG).

Alexion plans to initiate a phase III study of Ultomirisin NMOSD by the end of the year,.

Dosing is ongoing in a phase III study of ALXN1840 (WTX101) in Wilson disease, a rare genetic disorder with devastating hepatic and neurological consequences.  Enrollment is expected to complete in early 2020.

Alexion plans to initiate a phase II/III study of ALXN1830 (SYNT001) in warm autoimmune hemolytic anemia (WAIHA) in early 2020.

Our Take

Alexion topped earnings and sales estimates in the second quarter of 2019. We expect Soliris to continue driving growth. In the meantime, other new products — Strensiq and Kanuma — are performing well and likely to boost revenues. The company also launched Ultomiris in the United States for the treatment of PNH. The FDA also approved Soliris for the treatment of NMOSD in June 2019. The label expansion of the drug will drive sales for the company.

Zacks Rank & Other Stocks to Consider

Alexion currently is a Zacks Rank #1 (Strong Buy) stock.

Some other top-ranked stocks in the biotech sector are Alnylam Pharmaceuticals Inc. (ALNY - Free Report) , Acorda Therapeutics Inc. (ACOR - Free Report) and Applied Genetics Technologies Corp. (AGTC - Free Report) . While Alnylam and Acorda sport a Zacks Rank #1, Applied Genetics carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Alnylam’s loss per share estimates have narrowed from $6.90 to $6.43 for 2020 in the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with average beat of 8.93%.    

Acorda’s loss per share estimates have narrowed from $3.09 to $3.05 for 2020 in the past 60 days. The company delivered a positive earnings surprise in the trailing four quarters, with average beat of 79.32%.    

Applied Genetics’ loss per share estimates have narrowed from $2.39 to $2.15 for 2020 in the past 90 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with average beat of 83.47%.    

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