Alexion (ALXN) Tops Q1 Earnings, Revenues; Ups '17 View

Alexion Pharmaceuticals, Inc.’s (NASDAQ:ALXN) first-quarter 2017 earnings (including stock-based compensation expense) of $1.20 per share compared with the year ago earnings of 76 cents. The reported figure surpassed the Zacks Consensus Estimate of $1.05.

Revenues rose 24.1% year over year to $870 million, exceeding the Zacks Consensus Estimate of $821 million. The impact of currency headwind on the top line was 2% ($12 million).

Revenues in the quarter benefitted from an accounting change in revenue recognition. However, despite this benefit, total revenues rose 20%.

Shares of Alexion were up more than 4% in pre-market trading, in response to the better-than expected results. Alexion’s share price decreased 1.4% year to date, against the Zacks classified Medical - Biomedical and Genetics industry’s gain of 4.8%.

Revenue in Detail

Soliris sales were up 17.7% to $783 million during the quarter. Sales included a benefit of $29 million from the accounting change in revenue recognition.

While Strensiq contributed $74 million, up 124.2% year over year, Kanuma contributed $12 million, up considerably by 500% to quarterly revenues.

2017 Guidance

The company maintained its revenue guidance while raised its earnings guidance for 2017. The company expects adjusted earnings per share to be in the range of $5.10 to $5.30 up from its previously guidance range of $5.00 to $5.25. It projects revenues to be in the band of $3.4 to $3.5 billion same as the previous expectations. In fact, revenues for Soliris are maintained in the range of $3.03 to $3.1 billion.

Pipeline Update

The company continues to progress with the candidates in its pipeline. Alexion filed regulatory submissions for Soliris to treat patients with refractory generalized myasthenia in both the U.S. and Europe in Jan 2017. The applications have been accepted for review by the FDA and validated by the European Medicines Agency (EMA).

Alexion is evaluating Soliris in a couple of phase III studies – PREVENT, for the treatment of relapsing neuromyelitis optica spectrum disorder and expects to complete enrollment in this study this year.

Our Take

Alexion exceeded both earnings and revenue estimates in the first quarter and also raised its earnings guidance. We expect growth at Alexion to continue being driven by Soliris. Other new products – Strensiq and Kanuma – are doing well and should boost revenues. Eventually, reducing the company’s dependence on Soliris for growth. We are also impressed by Alexion’s efforts to develop its pipeline.

Zacks Rank & Key Picks

Alexion currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the health care sector include Heska Corp. (NASDAQ:HSKA) , Galena Biopharma, Inc. (NASDAQ:GALE) and Infinity Pharmaceuticals, Inc. (NASDAQ:INFI) sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Heska’s earnings per share estimates increased from $1.53 to $1.65 for 2017 and from $1.80 to $2.01 for 2018, over the last 60 days. The company posted positive surprises in three of the four trailing quarters with an average beat of 291.54%. Its share price increased 50.7% year to date.

Galena’s loss per share estimates narrowed from $2.03 to 58 cents for 2017 over the last 60 days. The company posted positive earnings surprises in two of the four trailing quarters, with an average beat of 53.83%.

Infinity Pharma’s loss per share estimates narrowed from $1.10 to $1.03 for 2017 over the last 60 days. The company posted positive earnings surprises in three of the four trailing quarters, with an average beat of 36.64%.

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