Marginal Earnings Beat at Alexion, View Upped - Analyst Blog

Alexion Pharmaceuticals, Inc. 's ( ALXN ) third-quarter 2013 earnings (excluding special items but including stock-based compensation expense) of 72 cents per share beat the Zacks Consensus Estimate by a penny. Earnings were above the year-ago adjusted earnings by 36%. The year-over-year rise in earnings was attributable to higher product sales. Including one-time items, third-quarter 2013 earnings came in at 47 cents per share, flat year over year.

Alexion's revenues jumped 36% to approximately $400.4 million in the third quarter of 2013 driven by strong Soliris sales. Revenues surpassed the Zacks Consensus Estimate of $396 million.

Adjusted operating expenses climbed approximately 37% to $178.8 million in the third quarter of 2013. The increase was attributable to a rise in both research and development (R&D) expenses (up 36%) and selling, general and administrative (SG&A) expenses (up 37%). The increase in R&D expenses was attributable to the company's efforts to develop its pipeline.

Pipeline Update

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), ALXN1102/ALXN1103 (hematology), ALXN1101 (molybdenum cofactor deficiency type A) and ALXN1007 (inflammatory disorders). We are impressed by Alexion's efforts to develop its pipeline.

Concurrent with its earnings release, Alexion announced that ALXN 1101 has been granted a Breakthrough Therapy designation by the U.S. Food and Drug Administration (FDA) for the above indication. The designation, which was enacted as part of the 2012 Food and Drug Administration Safety and Innovation Act, is granted to potential new treatments for serious or life-threatening diseases or conditions where the initial clinical data shows that the treatment has the potential to demonstrate substantial improvement on one or more clinically significant endpoints compared to existing treatments. The designation should help fasten the development and review process of the candidate.

Guidance Raised

Apart from announcing financial results for the third quarter, Alexion raised its outlook for 2013. The company raised its revenue guidance to $1.535-$1.540 billion from the previous forecast of $1.520-$1.530 billion.

The company also raised its adjusted earnings guidance for 2013 from $2.97-$3.02 per share to $3.02 to $3.04 per share. Soliris should continue performing well, driving growth at Alexion. The Zacks Consensus Estimate for 2013 (pre earnings) hinted at earnings of $2.71 per share on revenues of $1.531 billion.

Alexion carries a Zacks Rank #3 (Hold). Companies such as Roche ( RHHBY ), Isis Pharmaceuticals, Inc. ( ISIS ) and Actelion Ltd. ( ALIOF ) appear to be more attractive, each with a Zacks Rank #1 (Strong Buy).


ALEXION PHARMA (ALXN): Free Stock Analysis Report

ISIS PHARMACEUT (ISIS): 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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