Alexion Pharmaceuticals, Inc.
) fourth-quarter 2013 earnings (including stock-based
compensation expense) of 78 cents per share beat the Zacks
Consensus Estimate by 5 cents. Earnings were above the year-ago
figure by 44%. The year-over-year rise in earnings was
attributable to higher product sales. The stock gained
significantly in pre-market trading, reflecting investors'
optimism on the earnings report.
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Alexion's revenues jumped 38% to approximately $441.9 million in
the final quarter of 2013 driven by strong Soliris sales. Soliris
is available in the U.S, EU, Japan and many other countries for
the treatment of paroxysmal nocturnal hemoglobinuria (PNH). PNH
is 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. Revenues
surpassed the Zacks Consensus Estimate of $431 million.
Adjusted operating expenses (excluding stock-based compensation
expense) climbed approximately 24% to $201.7 million in the
fourth quarter of 2013. The increase was attributable to a rise
in both research and development (R&D) expenses (up 33%) and
selling, general and administrative (SG&A) expenses (up 18%).
The increase in R&D expenses was attributable to the
company's efforts to develop its pipeline. SG&A expenses
increased due to Alexion's efforts to expand.
The biopharmaceutical company's full year earnings (including
stock-based compensation expense) were $2.70 per share, up 45.2%
year over year and above the Zacks Consensus Estimate of $2.68
per share. Revenues came in at $1.55 billion, up 37% year over
year and marginally surpassing the Zacks Consensus Estimate of
$1.54 billion. Revenues in 2013 were above the company's
projected range of $1.535-$1.540 billion.
Alexion currently has several candidates in clinical development
focusing on different areas. The company is also working on
expanding Soliris' label into additional indications like
Shiga-toxin producing e. coli hemolytic uremic syndrome,
neuromyelitis optica and myasthenia gravis.
Alexion's pipeline also includes asfotase alfa
(hypophosphatasia), ALXN 1101 (molybdenum cofactor deficiency
type A) and ALXN1007 (inflammatory disorders).
Apart from announcing its earnings results, Alexion provided
guidance for 2014. The company expects revenues in the range of
$2.0-$2.02 billion, well over 2013 levels. The (pre earnings)
Zacks Consensus Estimate of $1.96 billion is below the guided
The company expects R&D costs (excluding stock based
compensation expense) for 2014 in the range of $360-$380 million.
Selling, general and administrative costs (excluding stock based
compensation expense) in 2014 are expected in the range of
$560-$580 million. The company expects adjusted earnings for 2014
in the range of $3.70-$3.80 per share. The (pre earnings) Zacks
Consensus Estimate is $3.11 per share.
Once again, Alexion impressed with strong results. Moreover, the
company's guidance for 2014 is encouraging. We expect growth at
Alexion to be driven by strong Soliris sales in the PNH and aHUS
We are also impressed by Alexion's efforts to develop its
pipeline. Alexion is expecting six product approvals within the
time period of 2014 to 2018 including asfotase alfa, ALXN 1101
and Soliris' label expansion. Asfotase alfa is expected to be
approved by year end. This will reduce the company's dependence
on Soliris for growth.
Alexion carries a Zacks Rank #3 (Hold). Some better-ranked stocks
). All these stocks carry a Zacks Rank #1 (Strong Buy).