Biotech Stock in News: Alexion Beats on Earnings & Revenues in Q3

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Alexion Pharmaceuticals’ (ALXN) third-quarter 2014 earnings (including stock-based compensation expense) of $1.14 per share beat the Zacks Consensus Estimate by 9 cents. The earnings beat was attributable to higher-than-expected revenues. Moreover, earnings were above the year-ago figure by 56.2%.

Including one-time items, Alexion’s earnings climbed 87% year over year to 88 cents per share in the reported quarter. Alexion’s revenues climbed 39% year over year in the third quarter to $555.1 million. We note that the entire revenues at Alexion are generated from Soliris sales.

Revenues surpassed the Consensus Estimate of $542 million. Soliris sales were impressive in both the approved indications – paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS). Operating expenses (excluding stock-based compensation expense and upfront and milestone payments related to license and collaboration deals and other special items) increased 29.2% to $231 million in the quarter.

The increase was due to a rise in research and development (R&D) expenses (34.5% higher) and selling, general and administrative (SG&A) expenses (25.8% higher). The increase in R&D expenses was due to the company’s efforts to develop its pipeline. SG&A expenses increased due to Alexion’s efforts to expand.

Biotech Stock News

Alexion had initiated the rolling submission of a Biologics License Application (BLA) for asfotase alfa in the hypophosphatasia indication in Apr 2014. The rolling submission to the FDA is expected to be completed by Dec 31, 2014. The candidate is also under review in the EU. Earlier in the month, the company announced that it has filed a new drug application with the Japanese Ministry of Health, Labour and Welfare for the candidate.

Alexion increased its guidance for 2014 both on the top and the bottom line. The company now expects adjusted earnings per share in the range of $5.15 to $5.20 per share (old guidance: $4.95 to $5.05).

Revenues for 2014 are now expected in the range of $2.220 billion to $2.225 billion (old guidance: $2.18 billion to $2.20 billion). The Consensus Estimate for 2014 is pegged at $4.56 per share on revenues of approximately $2.2 billion. We expect the Consensus Estimate to be revised upwards following the company’s fresh guidance.

Biotech Financial News

The increase in guidance and the outperformance with respect to revenues as well as earnings pleased the investors. Consequently, the stock gained in early trading.

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