) second-quarter 2014 earnings (including stock-based compensation
expense) of 99 cents per share were in line with the Zacks
Consensus Estimate. Increased costs led to modest results. Earnings
were however above the year-ago figure by 53%.
Alexion Pharmaceuticals, Inc - Earnings
Surprise | FindTheBest
Including one-time items, Alexion's earnings climbed 73% year
over year to 83 cents per share in the reported quarter.
Alexion's revenues climbed 38% year over year in the second quarter
to $512.5 million. We note that the entire revenues at Alexion are
generated from Soliris sales. Revenues were unfavorably impacted by
foreign exchange movements. However, the top line edged past the
Zacks Consensus Estimate of $511 million.
Soliris, the sole marketed product at Alexion, is available in the
U.S., EU, Japan and many other countries for the treatment of
paroxysmal nocturnal hemoglobinuria (PNH), a rare genetic blood
disorder. Sales of the drug have been boosted further by its label
expansion into the aHUS indication in the U.S. (Sept 2011) and the
EU (Nov 2011). Japanese approval for Soliris in the aHUS indication
came in Sep 2013.
Operating expenses (excluding stock-based compensation expense and
upfront and milestone payments related to license and collaboration
deals and other special items) increased 28.7% to $224.6 million in
the quarter. The increase was due to a rise in research and
development (R&D) expenses (34% higher) and selling, general
and administrative (SG&A) expenses (25.7% higher). The increase
in R&D expenses was due to the company's efforts to develop its
pipeline. SG&A expenses increased due to Alexion's efforts to
Alexion had initiated the rolling submission of a Biologics License
Application (BLA) for asfotase alfa in the hypophosphatasia
indication in Apr 2014. The rolling submission to the FDA is
underway. The candidate is also under review in the EU. The
application has been granted accelerated assessment status in the
Alexion increased its guidance for 2014 both on the top and the
bottom line. The company now expects adjusted earnings per share in
the range of $4.95 to $5.05 (old guidance: $4.75-$4.85).
Revenues for 2014 are now expected in the range of $2.18 billion to
$2.20 billion (old guidance: $2.15 billion to $2.17 billion). The
Zacks Consensus Estimate for 2014 is pegged at earnings of $4.55
per share on revenues of approximately $2.2 billion. The company
still expects R&D costs (excluding stock-based compensation
expense) in the range of $360 million to $380 million. Selling,
general and administrative costs (excluding stock-based
compensation expense) are still expected in the range of $550
million to $570 million.
We are encouraged by Alexion's hike in the 2014 earnings guidance.
We expect growth at Alexion to be driven by strong Soliris sales in
the PNH and aHUS indications.
We are also impressed by Alexion's efforts to develop its pipeline.
Alexion is expecting seven product approvals through 2018 including
asfotase alfa, ALXN 1101 and Soliris' label expansion into
indications such as antibody-mediated rejection, neuromyelitis
optica and the prevention of delayed graft function in renal
transplant patients. This will reduce the company's dependence on
Soliris for growth.
Alexion currently carries a Zacks Rank #3 (Hold). While Alexion's
second-quarter results were in no way exceptional,
) posted outstanding second-quarter results on Jul 23 after market
close. Gilead's results surpassed expectations by a wide margin
with its hepatitis C virus (HCV) drug, Sovaldi, delivering sales of
$3.5 billion in the quarter.
Better-ranked stocks in the healthcare sector include
The Medicines Company
). Both stocks sport a Zacks Rank #1 (Strong Buy).
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