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Alexion Reports Second Quarter 2017 Results

NEW HAVEN, Conn.--(BUSINESS WIRE)--Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) today announced financial results for the second quarter of 2017. Total revenues in the quarter were $912 million, a 21 percent increase compared to the same period in 2016. Second quarter revenue reflected a benefit of approximately $35 million due to favorable timing of orders compared to our prior forecast. The negative impact of foreign currency on total revenue year-over-year was 2 percent or $12 million, net of hedging activities. On a GAAP basis, diluted earnings per share (EPS) in the quarter was $0.73 per share, compared to $0.53 per share in the second quarter of 2016. Non-GAAP diluted EPS for the second quarter of 2017 was $1.56 per share, compared to $1.13 per share in the second quarter of 2016.

"Alexion delivered strong performance in the second quarter of 2017 while also executing on several initiatives to position the company for the future, including strengthening the Soliris patent portfolio, reaching a funding agreement for Strensiq in England, advancing the late-stage pipeline, enhancing compliance and culture and building a strong leadership team," said Ludwig Hantson, Chief Executive Officer of Alexion. "Our strategy for the next phase of growth will focus on our strengths to deliver sustainable long-term performance and increased value for shareholders. We will achieve this by growing our rare disease business, leveraging our expertise in complement, pursuing disciplined business development to expand the pipeline, and taking steps to optimize our infrastructure and operating model."

Second Quarter 2017 Financial Highlights

  • Soliris® (eculizumab) net product sales were $814 million, compared to $701 million in the second quarter of 2016, representing a 16 percent increase. Soliris volume increased 18 percent year-over-year.
  • Strensiq® (asfotase alfa) net product sales were $83 million, compared to $45 million in the second quarter of 2016, representing an 84 percent increase.
  • Kanuma® (sebelipase alfa) net product sales were $15 million, compared to $7 million in the second quarter of 2016, representing a 114 percent increase.
  • GAAP R&D expense was $199 million, compared to $180 million in the same quarter last year. Non-GAAP R&D expense was $179 million, compared to $165 million in the same quarter last year.
  • GAAP SG&A expense was $265 million, compared to $232 million in the same quarter last year. Non-GAAP SG&A expense was $227 million, compared to $200 million in the same quarter last year.
  • GAAP diluted EPS was $0.73 per share, compared to $0.53 per share in the same quarter last year. Non-GAAP diluted EPS was $1.56 per share, compared to $1.13 per share in the second quarter of 2016.

Research and Development

Alexion is redefining the Company’s Research & Development (R&D) strategy to create greater efficiency and focus on its expertise in complement biology and core therapeutic areas of hematology, nephrology, neurology, and metabolic disorders. To optimize and align R&D investments and development efforts with the Company's redefined strategy, Alexion is de-prioritizing the ALXN1101 (cPMP replacement therapy) and ALXN6000 (samalizumab) clinical development programs and will seek to out-license these assets. Alexion is also discontinuing its preclinical programs with mRNA therapies as well as other preclinical programs that are outside of the complement franchise, and is therefore terminating its partnerships with Moderna Therapeutics, Blueprint Medicines and Arbutus Biopharma.

Complement Portfolio Updates

  • Eculizumab- Refractory Generalized Myasthenia Gravis (gMG): Alexion has submitted applications in the U.S., EU and Japan to extend the indication for eculizumab as a potential treatment for patients with refractory gMG who are AChR-positive. Alexion received a positive opinion from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) in the second quarter and a final decision from the European Commission (EC) is anticipated in the third quarter of 2017. Alexion's application in the U.S. has been accepted for review by the U.S. Food and Drug Administration (FDA) and the FDA has set a Prescription Drug User Fee Act (PDUFA) date of October 23, 2017.
  • Eculizumab- Relapsing Neuromyelitis Optica Spectrum Disorder (NMOSD): Alexion expects to complete enrollment in the PREVENT study, a single, multinational, placebo-controlled Phase 3 trial of eculizumab in patients with relapsing NMOSD, in 2017 and to report data in 2018.
  • ALXN1210- PNH: Enrollment is complete in a Phase 3 trial comparing ALXN1210 administered intravenously every eight weeks to Soliris in complement inhibitor treatment-naive patients with PNH. Alexion expects to report data from this study in the second quarter of 2018. Alexion initiated a Phase 3 PNH Switch study of ALXN1210 administered intravenously every eight weeks compared to patients currently treated with Soliris in the second quarter of 2017. The Company expects to complete enrollment in this study in the third quarter of 2017.
  • ALXN1210- aHUS: Patients are being dosed in a Phase 3 trial with ALXN1210 administered intravenously every eight weeks in complement inhibitor treatment-naive adolescent and adult patients with aHUS. Enrollment is expected to be complete in early 2018. Alexion expects to initiate a Phase 3 trial of ALXN1210 in pediatric patients with aHUS in the third quarter of 2017.
  • ALXN1210- Subcutaneous: Initial pharmacokinetic and tolerability data from the Phase I study in healthy volunteers support progressing the development of a subcutaneous formulation of ALXN1210.

2017 Financial Guidance

Alexion is increasing its revenue guidance, narrowing its GAAP EPS guidance and increasing its non-GAAP EPS guidance. Further guidance updates are outlined below.

Updated GAAP Updated Non-GAAP Prior Non-GAAP
Guidance Prior GAAP Guidance Guidance Guidance
Total revenues $3,450 to $3,525 million $3,400 to $3,500 million $3,450 to $3,525 million $3,400 to $3,500 million
Soliris revenues $3,075 to $3,125 million $3,025 to $3,100 million $3,075 to $3,125 million $3,025 to $3,100 million
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