- Total Revenues of $3.084 Billion, an
18% Increase Over 2015 and 22% Volume Increase
- Global Soliris® Revenue Growth Driven
by Steady Number of New Patients with PNH and aHUS
- Strensiq® and Kanuma® Global Launches
Progress With New Patients Starting on Treatment
- Filed Regulatory Submissions for
Soliris in Patients with Refractory gMG in the U.S. and Europe
- ALXN1210 Phase 3 Studies Underway in
Patients with PNH and aHUS
- Alexion Board Increases Authorized
Share Repurchase to a Total of $1 Billion
Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) today announced
financial results for the fourth quarter and full year of 2016.
Total revenues for the full year of 2016 were $3.084 billion, an 18
percent increase compared to 2015. The negative impact of foreign
currency on total revenue year over year was 3 percent or $74
million, net of hedging activities. On a GAAP basis, diluted
earnings per share (EPS) for the full year of 2016 was $1.76 per
share, compared to $0.67 per share in 2015. Non-GAAP diluted EPS
for the full year of 2016 was $4.62 per share. Non-GAAP diluted EPS
was $4.65 per share for the full year of 2015, reflecting a
reduction of $0.34 per share to conform to the current non-GAAP
income tax expense definition.
Total revenues in the fourth quarter grew to $831 million, a 19
percent increase compared to the same period in 2015. The negative
impact of foreign currency on total revenue in the fourth quarter
was 2 percent or $12 million, net of hedging activities. On a GAAP
basis, diluted EPS for the fourth quarter of 2016 was $0.41 per
share, compared to $0.29 per share in the fourth quarter of 2015.
Non-GAAP diluted EPS for the fourth quarter of 2016 was $1.26 per
share. Non-GAAP diluted EPS was $1.04 per share in the fourth
quarter of 2015, reflecting a reduction of $0.09 per share to
conform to the current non-GAAP income tax expense definition. Both
GAAP and non-GAAP results are inclusive of legal, accounting, and
other costs associated with the Audit and Finance Committee's
completed investigation.
"In 2016 the global Alexion team delivered on our
patient-centered objectives as we grew our leadership in complement
by serving more patients with PNH and aHUS, and continued to build
our metabolic franchise with the global launches of Strensiq and
Kanuma. We also achieved important regulatory milestones towards
new indications for Soliris and initiated two registration studies
for ALXN1210 to drive our future growth," said David Brennan,
Interim Chief Executive Officer of Alexion. "Our 2017 guidance
reflects double-digit revenue and EPS growth as we continue to grow
our complement and metabolic franchises, prepare for the potential
launches of Soliris in refractory gMG, and focus on our highest
priority R&D programs."
Full Year 2016 Financial
Highlights
- Soliris® (eculizumab) net product sales
were $2,843 million, compared to $2,591 million in 2015.
- Strensiq® (asfotase alfa) net product
sales were $210 million, compared to $12 million in 2015.
- Kanuma® (sebelipase alfa) net product
sales were $29 million.
- GAAP R&D expense was $757 million,
compared to $709 million in 2015. Non-GAAP R&D expense was $690
million, compared to $515 million in 2015.
- GAAP SG&A expense was $954 million,
compared to $863 million in 2015. Non-GAAP SG&A expense was
$830 million, compared to $707 million in 2015.
- GAAP diluted EPS was $1.76 per share,
compared to $0.67 per share in 2015. Non-GAAP diluted EPS was $4.62
per share. Non-GAAP diluted EPS was $4.65 per share in 2015,
reflecting a reduction of $0.34 per share to conform to the current
non-GAAP income tax expense definition.
Fourth Quarter 2016 Financial
Highlights
- Soliris® net product sales were $749
million, compared to $689 million in the fourth quarter of
2015.
- Strensiq® net product sales were $71
million, compared to $12 million in the fourth quarter of
2015.
- Kanuma® net product sales were $11
million.
- GAAP R&D expense was $206 million,
compared to $191 million in the same quarter last year. Non-GAAP
R&D expense was $186 million, compared to $155 million in the
same quarter last year.
- GAAP SG&A expense was $259 million,
compared to $242 million in the same quarter last year. Non-GAAP
SG&A expense was $234 million, compared to $198 million in the
same quarter last year.
- GAAP diluted EPS was $0.41 per share,
compared to $0.29 per share in the same quarter last year. Non-GAAP
diluted EPS was $1.26 per share. Non-GAAP diluted EPS was $1.04 per
share in the fourth quarter of 2015, reflecting a reduction of
$0.09 per share to conform to the current non-GAAP income tax
expense definition.
- During the fourth quarter, the Company
recognized an impairment charge of $85 million related to SBC-103,
an early stage, clinical indefinite-lived intangible asset from the
Synageva acquisition. This charge was taken as a result of a
strategic evaluation of the asset, increases in the development and
commercial timelines, and updated cash flows. In February 2017,
Alexion decided to reduce its investment in SBC-103. Patients
currently enrolled in the Phase 1/2 trial will continue to receive
SBC-103, and no additional Alexion studies are planned. Alexion
will reassess the value of this asset on a go forward basis.
Share Repurchase
Authorization
The Company also announced that its Board of Directors has
increased the size of the Company's share repurchase authorization
to a total of $1 billion. The Board’s authorization is
open-ended.
Product and Pipeline
Updates
Complement Portfolio
- Eculizumab- Refractory Generalized
Myasthenia Gravis (gMG): Alexion has filed regulatory
submissions for eculizumab for the treatment of patients with
refractory gMG in both the United States and Europe.
- 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.
- Eculizumab- Delayed Graft Function
(DGF): In December 2016, Alexion announced that the PROTECT
study, a single, multinational, placebo-controlled trial of
eculizumab in the prevention of DGF, did not meet its primary
endpoint.
- ALXN1210- PNH: Patients are
being dosed in a Phase 3 trial comparing ALXN1210 administered
intravenously every eight weeks to Soliris in complement inhibitor
treatment-naive patients with PNH. To broaden the PNH program,
Alexion is also initiating a Phase 3 PNH switch study of ALXN1210
administered intravenously every eight weeks compared to patients
currently treated with Soliris. Alexion expects to complete
enrollment in both studies in 2017.
- ALXN1210- aHUS: Recruitment is
underway 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 2017. Alexion expects to initiate a
Phase 3 trial of ALXN1210 in pediatric patients with aHUS in the
second quarter of 2017.
- ALXN1210- Subcutaneous: Alexion
has completed enrollment in a Phase 1 study of a new formulation of
ALXN1210 administered subcutaneously in healthy volunteers.
Metabolic Portfolio
- SBC-103: In February 2017,
Alexion decided to reduce its investment in SBC-103, a recombinant
form of the NAGLU enzyme being evaluated in patients with
mucopolysaccharidosis IIIB, or MPS IIIB. Patients currently
enrolled in the Phase 1/2 study will continue to receive SBC-103,
and no additional Alexion studies are planned.
- cPMP Replacement Therapy
(ALXN1101): Alexion is enrolling patients in a pivotal study to
evaluate ALXN1101 in neonates with Molybdenum Cofactor Deficiency
(MoCD) Type A.
Immuno-Oncology Program
- Samalizumab (ALXN6000):
Samalizumab is a first-in-class immunomodulatory humanized
monoclonal antibody that blocks the key immune checkpoint protein,
CD200. Alexion has initiated a Phase 1 study of samalizumab in
patients with advanced solid tumors. Patients are also being dosed
in The Leukemia and Lymphoma Society's BEAT AML Master Trial, a
multi-arm clinical trial, which is evaluating samalizumab as well
as other potential therapies for the treatment of acute myeloid
leukemia (AML).
2017 Financial Guidance
GAAP Guidance Non-GAAP Guidance Total
revenues $3,400 to $3,500 million $3,400 to $3,500 million Soliris
revenues $3,025 to $3,100 million $3,025 to $3,100 million
Metabolic revenues $375 to $400 million $375 to $400 million
Research and development expense (% total revenues) 24% to 27% 22%
to 23% Selling, general and administrative expense (% total
revenues) 29% to 30% 25% to 26%
Operating margin
25% to 28% 43% to 44% Earnings per share $2.55 to $3.05 $5.00 to
$5.25
Alexion’s 2017 financial guidance is based on current foreign
exchange rates net of hedging activities and does not include the
effect of business combinations, license and collaboration
agreements, asset acquisitions, intangible asset impairments,
changes in fair value of contingent consideration or restructuring
activity that may occur after the day prior to the date of this
press release.
Conference Call/Webcast Information:
Alexion will host a conference call/audio webcast to discuss the
fourth quarter and full year 2016 results, at 10:00 a.m. Eastern
Time. To participate in the call, dial 877-681-3372 (USA) or
719-325-4794 (International), passcode 5877612 shortly before 10:00
a.m. Eastern Time. A replay of the call will be available for a
limited period following the call. The replay number is
888-203-1112 (USA) or 719-457-0820 (International), passcode
5877612. The audio webcast can be accessed on the Investor page of
Alexion’s website at: http://ir.alexionpharm.com.
About Alexion
Alexion is a global biopharmaceutical company focused on
developing and delivering life-transforming therapies for patients
with devastating and rare disorders. Alexion is the global leader
in complement inhibition and has developed and commercializes the
first and only approved complement inhibitor to treat patients with
paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic
uremic syndrome (aHUS), two life-threatening ultra-rare disorders.
In addition, Alexion’s metabolic franchise includes two highly
innovative enzyme replacement therapies for patients with
life-threatening and ultra-rare disorders, hypophosphatasia (HPP)
and lysosomal acid lipase deficiency (LAL-D). Alexion is advancing
its rare disease pipeline with highly innovative product candidates
in multiple therapeutic areas. This press release and further
information about Alexion can be found at: www.alexion.com.
[ALXN-E]
This press release contains forward-looking statements,
including statements related to guidance regarding anticipated
financial results for 2017, assessment of the Company's
commercialization efforts and commercial potential for Soliris,
Strensiq and Kanuma, medical and commercial potential of each of
Alexion's product candidates, launch expectations for Strensiq and
Kanuma, and plans for regulatory filings and clinical programs for
our product candidates. Forward-looking statements are subject to
factors that may cause Alexion's results and plans to differ from
those expected, including for example, decisions of regulatory
authorities regarding the adequacy of our research, marketing
approval or material limitations on the marketing of our products,
delays, interruptions or failures in the manufacture and supply of
our products and our product candidates, failure to satisfactorily
address matters raised by the FDA and other regulatory agencies,
the possibility that results of clinical trials are not predictive
of safety and efficacy results of our products in broader patient
populations, the possibility that current rates of adoption of
Soliris in PNH, aHUS or other diseases are not sustained, the
possibility that clinical trials of our product candidates could be
delayed, the adequacy of our pharmacovigilance and drug safety
reporting processes, the risk that third party payors (including
governmental agencies) will not reimburse or continue to reimburse
for the use of our products at acceptable rates or at all, risks
regarding government investigations, including investigations of
Alexion by the SEC and DOJ, the risk that anticipated regulatory
filings are delayed, the risk that estimates regarding the number
of patients with PNH, aHUS, HPP and LAL-D are inaccurate, the risks
of shifting foreign exchange rates, and a variety of other risks
set forth from time to time in Alexion's filings with the U.S.
Securities and Exchange Commission, including but not limited to
the risks discussed in Alexion's Quarterly Report on Form 10-Q for
the period ended September 30, 2016 and in our other filings with
the U.S. Securities and Exchange Commission. Alexion does not
intend to update any of these forward-looking statements to reflect
events or circumstances after the date hereof, except when a duty
arises under law.
In addition to financial information prepared in accordance with
GAAP, this press release also contains non-GAAP financial measures
that Alexion believes, when considered together with the GAAP
information, provide investors and management with supplemental
information relating to performance, trends and prospects that
promote a more complete understanding of our operating results and
financial position during different periods. The non-GAAP results
exclude the impact of the following GAAP items: share-based
compensation expense, fair value adjustment of inventory acquired,
amortization of purchased intangible assets, changes in fair value
of contingent consideration, acquisition-related costs,
restructuring expenses, upfront and milestone payments related to
licenses and collaborations, impairment of intangible assets and
adjustments to income tax expense. These non-GAAP financial
measures are not intended to be considered in isolation or as a
substitute for, or superior to, the financial measures prepared and
presented in accordance with GAAP and should be reviewed in
conjunction with the relevant GAAP financial measures. Please refer
to the attached Reconciliations of GAAP to non-GAAP 2016 Financial
Results and GAAP to non-GAAP 2017 Financial Guidance for
explanations of the amounts adjusted to arrive at non-GAAP net
income and non-GAAP earnings per share amounts for the three and
twelve month periods ended December 31, 2016 and 2015 and
projected twelve months ended December 31, 2017.
(Tables Follow)
ALEXION PHARMACEUTICALS, INC. TABLE 1: CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except
per share amounts) (unaudited) Three
months ended Twelve months ended December
31 December 31 2016 2015
2016 2015 Net product sales $ 831 $ 701
$ 3,082 $ 2,603 Other revenue - -
2 1 Total revenues 831 701 3,084 2,604
Cost of sales 68 58 258 233 Operating expenses:
Research and development 206 191 757 709 Selling, general and
administrative 259 242 954 863 Amortization of purchased intangible
assets 80 80 322 117 Change in fair value of contingent
consideration 5 19 36 64 Acquisition-related costs - 3 2 39
Restructuring expenses 1 11 3 42 Impairment of intangible assets 85
- 85 - Total operating expenses
636 546 2,159 1,834
Operating income 127 97 667 537 Other income
and expense: Investment income 3 1 11 8 Interest expense (25 ) (23
) (97 ) (48 ) Foreign currency (loss) gain (1 ) (1 )
(5 ) 1 Income before income taxes 104
74 576 498 Income tax expense 11 7 177 354
Net income $ 93 $ 67 $ 399 $ 144
Earnings per common share Basic $ 0.41 $ 0.30 $ 1.78
$ 0.68 Diluted $ 0.41 $ 0.29 $ 1.76 $ 0.67 Shares used in
computing earnings per common share Basic 225 225 224 213 Diluted
226 228 227 216
ALEXION PHARMACEUTICALS, INC. TABLE 2:
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL RESULTS (in
millions, except per share amounts) (unaudited)
Three months ended Twelve months ended
December 31 December 31 2016
2015 2016 2015 GAAP net income $
93 $ 67 $ 399 $ 144 Before tax adjustments: Cost of sales:
Share-based compensation 3 3 11 7 Fair value adjustment of
inventory acquired (1) 2 - 11 - Research and development expense:
Share-based compensation 14 21 57 64 Upfront and milestone payments
related to license and collaboration agreements 6 15 10 130
Selling, general and administrative expense: Share-based
compensation 25 44 124 156 Amortization of purchased intangible
assets (2) 80 80 322 117 Change in fair value of contingent
consideration 5 18 36 64 Acquisition-related costs (3) - 3 2 39
Restructuring expenses 1 12 3 42 Impairment of intangible assets
(4) 85 - 85 - Adjustments to income tax expense (5) (6) (27 ) (23 )
(6 ) 251 Non-GAAP net income $ 287
$ 240 $ 1,054 $ 1,014 GAAP earnings per
share - diluted $ 0.41 $ 0.29 $ 1.76 $ 0.67 Non-GAAP earnings per
share - diluted (6) $ 1.26 $ 1.04 $ 4.62 $ 4.65 Shares used
in computing diluted earnings per share (GAAP) 226 228 227 216
Shares used in computing diluted earnings per share (non-GAAP) 228
230 228 218 (1) Inventory fair value adjustment
associated with the amortization of Kanuma inventory step-up
related to the purchase accounting for Synageva. (2) In the
third quarter of 2015, the Company initiated amortization of its
purchased intangible assets due to the regulatory approvals for
Strensiq and Kanuma. (3) The following table summarizes
acquisition-related costs:
Three months ended Twelve
months ended December 31 December 31 2016
2015 2016 2015 Acquisition-related
costs: Transaction costs $ - $ - $ - $ 27 Integration costs
- 3 2 12 $ -
$ 3 $ 2 $ 39 (4) During the fourth
quarter of 2016, the Company recognized an impairment charge
related to SBC-103, an early stage, clinical indefinite-lived
intangible asset related to the Synageva acquisition. (5)
Alexion's non-GAAP income tax expense definition excludes the tax
effect of pre-tax adjustments to GAAP net income and intercompany
transactions with our captive foreign partnership which would
become due and payable only upon liquidation of a substantial
portion of our non-US business interests. (6) Previously
reported non-GAAP tax expense and diluted EPS have been modified to
conform to the current non-GAAP income tax definition adopted in Q2
2016. Previously reported non-GAAP EPS was $1.13 and $4.99 for the
three and twelve months ended December 31, 2015, respectively.
ALEXION PHARMACEUTICALS, INC. TABLE 3: RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL GUIDANCE (in millions, except per
share amounts and percentages) (unaudited)
Twelve months ended December 31, 2017 Low High GAAP
net income $ 578 $ 692 Before tax adjustments: Share-based
compensation 231 207 Fair value adjustment in inventory acquired 5
5 Upfront and milestone payments related to licenses and
collaborations 51 — Amortization of purchased intangible assets 320
320 Change in fair value of contingent consideration 14 14
Adjustments to income tax expense (54 ) (36 )
Non-GAAP net income $ 1,145 $ 1,202 Diluted
GAAP earnings per share $ 2.55 $ 3.05 Diluted Non-GAAP earnings per
share $ 5.00 $ 5.25 Operating expense and margin (% total
revenues) GAAP research and development expense 27 % 24 %
Share-based compensation (3 )% (2 )% Upfront and milestone payments
related to licenses and collaborations (1 )% 0 %
Non-GAAP research and development expense 23 % 22 %
GAAP selling, general and administrative expense 30 % 29 %
Share-based compensation (4 )% (4 )% Non-GAAP
selling, general and administrative expense 26 % 25 %
GAAP operating margin 25 % 28 % Share-based compensation 7 %
6 % Fair value adjustment in inventory acquired 0 % 0 % Upfront and
milestone payments related to licenses and collaborations 2 % 0 %
Amortization of purchased intangible assets 9 % 9 % Change in fair
value of contingent consideration 0 % 1 % Non-GAAP
operating margin 43 % 44 %
ALEXION
PHARMACEUTICALS, INC. TABLE 4: NET PRODUCT SALES (in
millions) (unaudited) Three months
ended Twelve months ended December 31
December 31 2016 2015 2016
2015 Soliris $ 749 $ 689 $ 2,843 $ 2,591 Strensiq 71
12 210 12 Kanuma 11 — 29 — Total net
product sales $ 831 $ 701 $ 3,082 $ 2,603
ALEXION
PHARMACEUTICALS, INC. TABLE 5: NET PRODUCT SALES BY
GEOGRAPHY (in millions) (unaudited)
Three months ended Twelve months ended December
31 December 31 2016 2015 2016
2015 United States $ 354 $ 273 $ 1,257 $ 951 Europe 244 222
961 841 Asia-Pacific 85 73 318 276 Rest of World 148
133 546 535 Total net product sales $ 831 $ 701 $
3,082 $ 2,603
ALEXION PHARMACEUTICALS, INC. TABLE 6:
CONDENSED CONSOLIDATED BALANCE SHEETS (in millions)
(unaudited) December 31
December 31 2016 2015 Cash and cash
equivalents $ 966 $ 1,010 Marketable securities 327 375 Trade
accounts receivable, net 650 533 Inventories 375 290 Prepaid
expenses and other current assets 260 208 Property, plant and
equipment, net 1,036 697 Intangible assets, net 4,303 4,708
Goodwill 5,037 5,048 Other assets 299 228 Total assets $ 13,253 $
13,097 Accounts payable and accrued expenses $ 572 $ 460
Deferred revenue 37 21 Current portion of long-term debt 167 166
Other current liabilities 23 6 Current portion of contingent
consideration 24 56 Long-term debt, less current portion 2,888
3,254 Facility lease obligation 233 151 Contingent consideration
129 121 Deferred tax liabilities (1) 396 529 Other liabilities 90
74 Total liabilities 4,559 4,838 Total stockholders' equity (1)
8,694 8,259 Total liabilities and stockholders' equity $ 13,253 $
13,097 (1) In March 2016, the FASB issued a new standard
intended to simplify certain aspects of the accounting for employee
share-based payments. We elected to early adopt this standard
during the third quarter of 2016. The adoption of the new standard
requires recognition of excess tax benefits regardless of whether
the benefit reduces taxes payable in the current period. As a
result, $238 million associated with previously unrecognized excess
tax benefits was recorded as a deferred tax asset and an increase
in retained earnings as of the beginning of 2016.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170216005317/en/
AlexionMediaStephanie
Fagan, 475-230-3777Senior Vice President, Corporate
CommunicationsorKim Diamond, 475-230-3775Executive Director,
Corporate CommunicationsorInvestorsElena Ridloff, CFA,
475-230-3601Vice President, Investor Relations
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