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Alexion (ALXN) Lags Q1 Earnings & Revenues, Revises View

Alexion Pharmaceuticals, Inc. 's ALXN first-quarter 2016 earnings (including stock-based compensation expense) of 87 cents per share missed the Zacks Consensus Estimate of 91 cents. Earnings were also below the year-ago figure of $1.08 per share.

Nevertheless, Alexion's revenues soared 16.8% year over year to $701 million. The impact of currency headwinds on total revenue was 5% ($30 million). Most of the company's revenues were generated from the sales of Soliris. The top line, however, missed the Zacks Consensus Estimate of $712 million.

Quarter in Detail

Soliris sales were up 10.7% to $664.7 million in spite of the negative foreign currency translations and macroeconomic factors in Latin American countries. Strensiq and Kanuma contributed $33.2 million and $2.5 million, respectively, to quarterly revenues.

Operating expenses (including stock-based compensation expense, and upfront and milestone payments related to license and collaboration deals, and other special items) were on the rise. Research and development (R&D) expenses were down 20.3%, while selling, general and administrative (SG&A) expenses escalated 24.3%.

2016 Outlook

Alexion has revised its outlook for 2016. The company expects adjusted earnings per share to be at the low end of the previous projection of $5.00-$5.20. It also expects revenues to be at the low end of the prior forecast of $3.05-$3.1 billion. These revisions were made primarily due to increased unfavorable macroeconomic conditions in Latin America.

Soliris revenues are now expected in the range of $2.83-$2.87 billion (previous guidance: $2.9-$2.925 billion).

Revenues from the metabolic franchise, comprising Kanuma and Strensiq sales, are expected in the range $180-$200 million ($150-$175 million expected previously). The company expects R&D expenses and SG&A expenses to be at the high end of the prior projections of $650-$680 million and $760-$790 million, respectively.

Our Take

Alexion's first-quarter results were disappointing, with the company missing both top- and bottom-line estimates. We expect growth at Alexion to continue being driven by strong sales of Soliris. Launch of new products - Strensiq and Kanuma - should boost revenues and eventually reduce the company's dependence on Soliris for growth. We are also impressed by Alexion's efforts to develop its pipeline.

Alexion currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Anika Therapeutics Inc. ANIK , Emergent BioSolutions, Inc. EBS and Aegerion Pharmaceuticals, Inc. AEGR , each sporting a Zacks Rank #1 (Strong Buy).

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ALEXION PHARMA (ALXN): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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