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Alexion (ALXN) Beats on Q1 Earnings & Sales, Lowers Guidance
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Alexion Pharmaceuticals, Inc. posted better-than-expected results for the first quarter of 2020 but trimmed its outlook for the year.
First-quarter adjusted earnings of $3.22 per share comfortably beat the Zacks Consensus Estimate of $2.70 and grew from $2.39 in the year-ago quarter.
Moreover, revenues rose 27% year over year to $1.44 billion in the reported quarter and surpassed the Zacks Consensus Estimate of $1.35 billion. Revenues were driven by higher sales of Soliris, Strensiq, Kanuma and Ultomiris.
Shares of Alexion have lost 9.1% in the year so far against the industry’s growth of 3.7%.
Revenues in Detail
Soliris (paroxysmal nocturnal hemoglobinuria [PNH], atypical hemolytic uremic syndrome [aHUS], and generalized myasthenia gravis [gMG]) sales were up 6% year over year to $1.02 billion in the reported quarter.
Long-acting C5 complement inhibitor, Ultomiris, for the treatment of adult patients with PNH and aHUS generated sales of $222.8 million compared with $24.6 million in the year-ago quarter and $170.2 million in the previous quarter.
Strensiq revenues were $172.2 million (up 32% year over year). Kanuma contributed $26.7 million (up 14% year over year) to quarterly revenues.
Cost Summary
Adjusted research and development (R&D) expenses increased to $185.7 million from $159.4 million in the year-ago quarter.
Adjusted selling, general and administrative (SG&A) expenses were $259.1 million, up from $243.7 million in the year-ago quarter.
2020 Guidance Lowered
Alexion now expects adjusted earnings per share of $10.45-$10.75 (previous guidance: $10.65-$10.85). The company now projects revenues of $5.23-$5.33 billion (previous guidance: $5.50-$5.56 million).
Combined revenues from Soliris and Ultomiris are now estimated at $4.49- $4.57 billion (previous guidance: $4.76-$4.80 billion).
The guidance was lowered due to the ongoing coronavirus crisis.
Pipeline Update
The company recently initiated a phase III study on Ultomiris in a subset of adults with COVID-19. It has also donated Soliris for compassionate use and expanded access programs.
Alexion plans to initiate a phase II/III study in children and adolescents with neuromyelitis optica spectrum disorder (NMOSD) in mid-2020. Another phase III study on Soliris is underway for addressing children and adolescents with gMG.
Alexion Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Meanwhile, applications for the approval of Ultomiris in aHUS are under review in the EU and Japan. Last month, Alexion announced a positive opinion for Ultomiris in aHUS from the European Medicines Agency’s Committee for Medicinal Products for Human Use. Another phase III study of Ultomiris in children and adolescents with aHUS is underway. Also, a phase III study on the drug in children and adolescents with PNH is underway.
Recent Developments
Alexion recently announced that it will acquire Portola Pharmaceuticals for $18 per share to expand and diversify its hematology, neurology and critical care commercial portfolio. Portola’s Andexxa [coagulation factor Xa (recombinant), inactivated-zhzo], marketed as Ondexxya in Europe, is the first and only approved Factor Xa inhibitor reversal agent and has demonstrated transformative clinical value by rapidly reversing the anticoagulant effects of Factor Xa inhibitors, rivaroxaban and apixaban, in severe and uncontrolled bleeding. The transaction is expected to close in the third quarter of 2020.
Our Take
Alexion’s first-quarter results were strong as Soliris maintained momentum and Ultomiris gained traction. However, the business will be negatively impacted in the upcoming quarters due to the ongoing pandemic, due to which the company lowered its guidance.
Alexion’s efforts to diversify its portfolio through prudent acquisitions are encouraging.
Meanwhile, the company is also evaluating Ultomiris for COVID-19 infection and a positive outcome will boost prospects significantly.
Given the alarming levels of spread and severity, some approved drugs are being tested to see if they are effective in treating infected patients. Amgen (AMGN - Free Report) will also begin clinical studies to evaluate inflammatory drug, Otezla, to treat respiratory distress in late-stage COVID-19 patients. Incyte (INCY - Free Report) has also initiated a study on its lead drug, Jakafi, for COVID-19 infection.
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Alexion (ALXN) Beats on Q1 Earnings & Sales, Lowers Guidance
Alexion Pharmaceuticals, Inc. posted better-than-expected results for the first quarter of 2020 but trimmed its outlook for the year.
First-quarter adjusted earnings of $3.22 per share comfortably beat the Zacks Consensus Estimate of $2.70 and grew from $2.39 in the year-ago quarter.
Moreover, revenues rose 27% year over year to $1.44 billion in the reported quarter and surpassed the Zacks Consensus Estimate of $1.35 billion. Revenues were driven by higher sales of Soliris, Strensiq, Kanuma and Ultomiris.
Shares of Alexion have lost 9.1% in the year so far against the industry’s growth of 3.7%.
Revenues in Detail
Soliris (paroxysmal nocturnal hemoglobinuria [PNH], atypical hemolytic uremic syndrome [aHUS], and generalized myasthenia gravis [gMG]) sales were up 6% year over year to $1.02 billion in the reported quarter.
Long-acting C5 complement inhibitor, Ultomiris, for the treatment of adult patients with PNH and aHUS generated sales of $222.8 million compared with $24.6 million in the year-ago quarter and $170.2 million in the previous quarter.
Strensiq revenues were $172.2 million (up 32% year over year). Kanuma contributed $26.7 million (up 14% year over year) to quarterly revenues.
Cost Summary
Adjusted research and development (R&D) expenses increased to $185.7 million from $159.4 million in the year-ago quarter.
Adjusted selling, general and administrative (SG&A) expenses were $259.1 million, up from $243.7 million in the year-ago quarter.
2020 Guidance Lowered
Alexion now expects adjusted earnings per share of $10.45-$10.75 (previous guidance: $10.65-$10.85). The company now projects revenues of $5.23-$5.33 billion (previous guidance: $5.50-$5.56 million).
Combined revenues from Soliris and Ultomiris are now estimated at $4.49- $4.57 billion (previous guidance: $4.76-$4.80 billion).
The guidance was lowered due to the ongoing coronavirus crisis.
Pipeline Update
The company recently initiated a phase III study on Ultomiris in a subset of adults with COVID-19. It has also donated Soliris for compassionate use and expanded access programs.
Alexion plans to initiate a phase II/III study in children and adolescents with neuromyelitis optica spectrum disorder (NMOSD) in mid-2020. Another phase III study on Soliris is underway for addressing children and adolescents with gMG.
Alexion Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Alexion Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Alexion Pharmaceuticals, Inc. Quote
Meanwhile, applications for the approval of Ultomiris in aHUS are under review in the EU and Japan. Last month, Alexion announced a positive opinion for Ultomiris in aHUS from the European Medicines Agency’s Committee for Medicinal Products for Human Use. Another phase III study of Ultomiris in children and adolescents with aHUS is underway. Also, a phase III study on the drug in children and adolescents with PNH is underway.
Recent Developments
Alexion recently announced that it will acquire Portola Pharmaceuticals for $18 per share to expand and diversify its hematology, neurology and critical care commercial portfolio. Portola’s Andexxa [coagulation factor Xa (recombinant), inactivated-zhzo], marketed as Ondexxya in Europe, is the first and only approved Factor Xa inhibitor reversal agent and has demonstrated transformative clinical value by rapidly reversing the anticoagulant effects of Factor Xa inhibitors, rivaroxaban and apixaban, in severe and uncontrolled bleeding. The transaction is expected to close in the third quarter of 2020.
Our Take
Alexion’s first-quarter results were strong as Soliris maintained momentum and Ultomiris gained traction. However, the business will be negatively impacted in the upcoming quarters due to the ongoing pandemic, due to which the company lowered its guidance.
Alexion’s efforts to diversify its portfolio through prudent acquisitions are encouraging.
Meanwhile, the company is also evaluating Ultomiris for COVID-19 infection and a positive outcome will boost prospects significantly.
Given the alarming levels of spread and severity, some approved drugs are being tested to see if they are effective in treating infected patients. Amgen (AMGN - Free Report) will also begin clinical studies to evaluate inflammatory drug, Otezla, to treat respiratory distress in late-stage COVID-19 patients. Incyte (INCY - Free Report) has also initiated a study on its lead drug, Jakafi, for COVID-19 infection.
Alexion currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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