Alexion Pharmaceuticals Inc
.'s (
ALXN
) second quarter 2012 earnings (excluding special items but
including stock-based compensation expense) of 41 cents per share
beat the Zacks Consensus Estimate by 11 cents. Second quarter 2012
earnings increased 78.3% from the year-ago period. Higher product
sales boosted second quarter earnings.
Alexion's revenues jumped 47.9% to $274.7 million in the
reported quarter driven by the continuing strong performance of
Soliris. Revenues comfortably surpassed the Zacks Consensus
Estimate of $263 million.
Quarterly Results
Soliris, Alexion's only marketed product, is available for the
treatment of paroxysmal nocturnal hemoglobinuria (PNH), a rare
genetic blood disorder and atypical hemolytic uremic syndrome
(aHUS), an ultra-rare genetic disorder. Soliris continued to
perform well with new patient additions for both indications
driving revenues.
Adjusted operating expenses climbed 38.6% to $142.2 million in
the reported quarter. The increase was attributable to a hike in
both research and development (R&D) expenses (68.4%) and
selling, general and administrative (SG&A) expenses
(24.2%).
Alexion currently has several candidates in clinical development
focusing on different areas including hematology, nephrology and
neurology. The company is also working on expanding Soliris' label
for additional indications like Shiga-toxin producing e. coli
hemolytic uremic syndrome (STEC-HUS), acute humoral kidney
rejection (AHR), neuromyelitis optica (NMO) and myasthenia gravis
(MG).
Alexion is also thinking beyond Soliris with candidates like
asfotase alfa, ALXN1102, ALXN1007.
Guidance Raised
Apart from announcing financial results for the quarter, Alexion
raised its outlook for 2012. The company raised its revenue
guidance for the year to $1.110-$1.125 billion from the previous
forecast of $1.065-$1.085 billion. The constant global growth of
Soliris inspired the company to raise its revenue guidance. The
Zacks Consensus Estimate of $1.093 billion is just below the
company's new guidance range.
Soliris also increased its adjusted SG&A guidance to
$360-$370 million from the old guidance of $345-$355 million, due
to the constant investment in worldwide activities. The company
maintained its R&D guidance of $220-$230 million.
The company also raised its earnings guidance for the year from
$1.65-$1.75 per share to $1.78-$1.88 per share. The revised
guidance range is well above the current Zacks Consensus Estimate
of $1.58 per share. Soliris should continue performing well,
driving growth at Alexion.
Our Recommendation
Currently, we have a Neutral recommendation on Alexion, which
carries a Zacks #3 Rank (short-term hold rating). We are impressed
by the strong Soliris sales and the increasing number of PNH and
aHUS patients. Though the company's raised outlook for 2012 is
encouraging, we remain concerned about Alexion's overdependence on
a single product and the lack of near-term catalysts.
ALEXION PHARMA (ALXN): Free Stock Analysis
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