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Alexion's (ALXN) Earnings Beat Estimates in Q2, Guidance Up

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Alexion Pharmaceuticals, Inc . ALXN posted second-quarter 2018 adjusted earnings of $2.07 per share, which came in higher than the year-ago earnings of $1.56 by 32.7%. Earnings also beat the Zacks Consensus Estimate of $1.69. Strong product revenues drove the bottom line in the quarter.

Revenues rose 14% year over year to $1.05 billion and exceeded the Zacks Consensus Estimate of $981 million. Revenues were driven by increased sales of Soliris, Strensiq and Kanuma.

Year to date, Alexion's shares have increased 12.7%, against the industry 's fall of 1.5%.

Revenues in Detail

Soliris (paroxysmal nocturnal hemoglobinuria ("PNH") and atypical hemolytic uremic syndrome (aHUS) sales were up 10% to $898.2 million in the reported quarter, driven by strong volume growth. While Strensiq (hypophosphatasia ["HPP"]) contributed $125.1 million to revenues, up 50% year over year, Kanuma (lysosomal acid lipase deficiency [LAL-D]) contributed $21.4 million (up 40%) to quarterly revenues.

Cost Summary

Adjusted research and development (R&D) expenses were $158.3 million, down 10.9% year over year.

Adjusted selling, general and administrative (SG&A) expenses were $230.4 million, down 1.3% year over year.

2018 Guidance

The company raised its earnings per share and revenue guidance for 2018. It expects earnings per share to be in the range of $7.00-$7.15, up from the previous forecast of $6.75-$6.90. Alexion projects revenues to be in the band of $3.98-$4.01 billion, up from its previous expectation of $3.93-$3.99 billion. The Zacks Consensus Estimate for earnings for 2018 was pegged at $7.04, while for sales it was $4.01 billion.

Revenues for Soliris are expected in the $3.42-$3.44 billion range compared with $3.38-$3.42 billion estimated earlier.

The outlook assumes unfavorable Soliris revenue impact of $90 million to $110 million from ALXN1210 and other clinical trial recruitment versus the prior year.

Pipeline Update

The company has submitted applications in the United States and EU for the approval of ALXN1210 in patients with PNH. Alexion also plans to file for regulatory approval in Japan, later in 2018. Further, a phase III study of ALXN1210 in children and adolescents with PNH is currently underway.

Enrollment of ALXN1210 in phase III study for aHUS was completed in the second quarter of 2018 and Alexion expects to report data from this study in 2019.

In late 2018, Alexion plans to initiate a single, PK-based phase III study of ALXN1210 delivered subcutaneously, once per week, to support registration in PNH and aHUS.

Alexion has filed a Clinical Trial Application (CTA) in the EU for subcutaneous ALXN1210 co-administered with Halozyme Therapeutics, Inc.'s HALO ENHANZEdrug-delivery technology, PH20, and plans to initiate a phase I study in the second half of 2018. Pending co-formulation data, this next-generation subcutaneous formulation will be called ALXN1810, and has the potential to further extend the dosing interval to once every two weeks or once per month.

Acquisition

During the April-June quarter, Alexion completed the acquisition ofSweden-based Wilson Therapeutics. This acquisition has added a late-stage candidate - WTX101 - to Alexion's pipeline. The candidate is currently in phase III for the treatment of Wilson disease, a rare genetic disorder.

Alexion is looking to diversify its portfolio and reduce the company's dependence on Soliris. The deal will strengthen Alexion's rare disease pipeline with a late-stage candidate.

Our Take

Alexion exceeded earnings and sales estimates in the second quarter of 2018. We expect Soliris to continue driving the company's growth. In the meantime, other new products - Strensiq and Kanuma - are doing well and will boost revenues.

We are also impressed by Alexion's efforts to develop its pipeline and submitted applications in the United States and EU for the approval of ALXN1210 in patients with PNH. The company also completed the acquisition of Wilson Therapeutics to begin rebuilding the clinical pipeline.

Alexion Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Alexion Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | Alexion Pharmaceuticals, Inc. Quote

Zacks Rank and Other Stocks to Consider

Alexion carries a Zacks Rank #2 (Buy).

Other top-ranked stocks from the same space include Gilead Sciences Inc. GILD and Vanda Pharmaceuticals Inc. VNDA . Both stocks flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Gilead's earnings per share estimates have increased from $6.09 to $6.15 for 2018 and from $6.31 to $6.33 for 2019, over the past 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 6.43%. The stock has rallied 10.2% so far this year.

Vanda's earnings per share estimates have increased from 18 cents to 20 cents for 2018 and from 77 cents to 80 cents for 2019, over the past 30 days. The company delivered a positive earnings surprise in all of the trailing four quarters, with an average beat of 133.1%. The stock has rallied 34.5% so far this year.

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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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