- 1Q17 Total Revenues of $870 Million, a
24% Increase and 26% Volume Increase Year-Over-Year
- Revenue Growth Benefited from Continued
Strong Volume Growth of Soliris® In Core Markets
- Strensiq® Revenue Driven by Steady
Addition of New Patients Starting Treatment
- Applications Filed in U.S., Europe and
Japan for Soliris in Patients with Refractory gMG
- Enrollment in ALXN1210 Phase 3 Studies
Advanced in Patients with PNH and aHUS
- New Phase 1 Data Support Advancing
Development of ALXN1210 Subcutaneous Formulation
- Reiterating 2017 Revenue Guidance of
$3.4 to $3.5 Billion and Increasing GAAP EPS Guidance to $2.80 to
$3.20 per share and Non-GAAP EPS Guidance to $5.10 to $5.30 per
share
Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) today announced
financial results for the first quarter of 2017. Total revenues in
the quarter were $870 million, a 24 percent increase compared to
the same period in 2016. First quarter revenues included a benefit
of $29 million from a change in revenue recognition in 2017 for
certain non-U.S. markets; excluding the benefit of this accounting
change, revenues increased to $841 million, a 20 percent increase
compared to the same period in 2016. 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 $0.75 per share,
compared to $0.41 per share in the first quarter of 2016. Non-GAAP
diluted EPS for the first quarter of 2017 was $1.38 per share.
Non-GAAP diluted EPS was $0.99 per share in the first quarter of
2016, including a reduction of $0.12 per share to conform to the
current non-GAAP income tax expense definition.
"We delivered continued double-digit revenue growth in the
quarter from our complement and metabolic portfolios and achieved
important regulatory milestones towards the potential approval of
Soliris as a treatment for patients with refractory gMG in the
U.S., Europe and Japan. We also demonstrated strong commercial
execution for Soliris while simultaneously enrolling patients with
PNH and aHUS into the ALXN1210 Phase 3 trials," said Ludwig
Hantson, Chief Executive Officer of Alexion. "Alexion’s strong
performance in the first quarter positions us well for continued
success in 2017 and beyond. As we continue to grow our business, we
will be anchored by a culture of compliance and driven by passion
and dedication to patients. I am excited to work with our team to
capitalize on Alexion’s fundamentals to drive continued momentum
and long-term growth by enhancing our commercial, R&D and
capital allocation priorities to drive superior financial
performance and shareholder returns."
First Quarter 2017 Financial
Highlights
- Soliris® (eculizumab) net product sales
were $783 million, including a benefit of $29 million from a change
in revenue recognition in 2017 for certain non-U.S. markets,
compared to $665 million in the first quarter of 2016. Starting in
the first quarter of 2017, Alexion is recording revenue shipped to
certain distributors earlier as the Company has sufficient sales
data to estimate returns. The $29 million benefit is composed of
approximately $21 million from bulk orders in Latin America and the
remaining $8 million from deferred sales in other non-U.S.
markets.
- Strensiq® (asfotase alfa) net product
sales were $74 million, compared to $33 million in the first
quarter of 2016.
- Kanuma® (sebelipase alfa) net product
sales were $12 million, compared to $2 million in the first quarter
of 2016.
- GAAP R&D expense was $219 million,
compared to $176 million in the same quarter last year. Non-GAAP
R&D expense was $194 million, compared to $158 million in the
same quarter last year.
- GAAP SG&A expense was $262 million,
compared to $233 million in the same quarter last year. Non-GAAP
SG&A expense was $226 million, compared to $194 million in the
same quarter last year.
- GAAP diluted EPS was $0.75 per share,
compared to $0.41 per share in the same quarter last year. Non-GAAP
diluted EPS was $1.38 per share. Non-GAAP diluted EPS was $0.99 per
share in the first quarter of 2016, reflecting a reduction of $0.12
per share to conform to the current non-GAAP income tax expense
definition.
Product and Pipeline
Updates
Complement Portfolio
- 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. The applications have been accepted for review by
the U.S. Food and Drug Administration (FDA) and validated by the
European Medicines Agency (EMA).
- 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.
- 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. In the second quarter of 2017,
Alexion plans to initiate a Phase 3 PNH Switch study of ALXN1210
administered intravenously every eight weeks compared to patients
currently treated with Soliris. The Company expects to complete
enrollment in both studies in 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 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. Initial
pharmacokinetic and tolerability data from the Phase I study
support progressing the development of this subcutaneous
formulation of ALXN1210.
Metabolic Portfolio
- 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): Alexion
has initiated a Phase 1 study of samalizumab, a first-in-class
immunomodulatory humanized monoclonal antibody that blocks the key
immune checkpoint protein, CD200, 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
Alexion is reiterating its 2017 revenue and operating margin
guidance provided on the fourth quarter and full year 2016 earnings
call and increasing its GAAP and non-GAAP EPS guidance.
Updated GAAP Updated Non-GAAP
Prior Non-GAAP
Guidance Prior GAAP Guidance
Guidance Guidance Total revenues $3,400 to $3,500 million
$3,400 to $3,500 million $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 $3,025 to $3,100 million $3,025 to $3,100 million Metabolic
revenues $375 to $400 million $375 to $400 million $375 to $400
million $375 to $400 million R&D (% total revenues) 24% to 26%
24% to 27% 22% to 23% 22% to 23% SG&A (% total revenues) 28% to
30% 29% to 30% 25% to 26% 25% to 26% Operating margin 25% to 28%
25% to 28% 43% to 44% 43% to 44% Earnings per share $2.80 to $3.20
$2.55 to $3.05 $5.10 to $5.30 $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
first quarter 2017 results, at 10:00 a.m. Eastern Time. To
participate in the call, dial 888-329-8877 (USA) or 719-457-2648
(International), passcode 6536169 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 6536169. 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 U.S. Securities and Exchange Commission (SEC) and
U.S. Department of Justice, 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 changing foreign exchange rates, and a variety of other risks
set forth from time to time in Alexion's filings with the SEC,
including but not limited to the risks discussed in Alexion's
Annual Report on Form 10-K for the period ended December 31, 2016
and in our other filings with the SEC. 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 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 month
periods ended March 31, 2017 and 2016 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 March 31 2017 2016 Net
product sales $ 869 $ 700 Other revenue 1 1 Total
revenues 870 701 Cost of sales 69 59 Operating expenses:
Research and development 219 176 Selling, general and
administrative 262 233 Amortization of purchased intangible assets
80 80 Change in fair value of contingent consideration 4 (15 )
Acquisition-related costs — 1 Restructuring expenses 24 1
Total operating expenses 589 476
Operating income 212 166 Other income and expense:
Investment income 4 1 Interest expense (24 ) (24 ) Other income 2
— Income before income taxes 194 143
Income tax expense 24 51 Net income $ 170 $ 92
Earnings per common share Basic $ 0.76 $ 0.41 Diluted
$ 0.75 $ 0.41 Shares used in computing earnings per common
share Basic 224 225 Diluted 226 227
ALEXION PHARMACEUTICALS,
INC. TABLE 2: RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
RESULTS (in millions, except per share amounts)
(unaudited) Three months ended March 31
2017 2016 GAAP net income $ 170 $ 92 Before
tax adjustments: Cost of sales: Share-based compensation 2 3 Fair
value adjustment in inventory acquired (1) 2 1 Research and
development expense: Share-based compensation 16 15 Upfront and
milestone payments related to licenses and collaborations 9 3
Selling, general and administrative expense: Share-based
compensation 36 38 Amortization of purchased intangible assets 80
80 Change in fair value of contingent consideration 4 (15 )
Acquisition-related costs — 1 Restructuring expenses (2) 24 1
Adjustments to income tax expense (3) (4) (27 ) 8 Non-GAAP
net income $ 316 $ 227 GAAP earnings per
common share - diluted $ 0.75 $ 0.41 Non-GAAP earnings per common
share - diluted (4) $ 1.38 $ 0.99 Shares used in computing
diluted earnings per common share (GAAP) 226 227 Shares used in
computing diluted earnings per common share (non-GAAP) 229 229 (1)
Inventory fair value adjustment associated with the
amortization of Kanuma inventory step-up related to the purchase
accounting for Synageva. (2) Restructuring expenses of $24
million are related to the company-wide restructuring initiated in
the first quarter 2017. (3) 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. (4) Previously reported non-GAAP tax expense and
diluted EPS have been modified to conform to the current non-GAAP
income tax expense definition adopted in Q2 2016. Previously
reported non-GAAP EPS was $1.11 for the three months ended March
31, 2016.
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 $ 635 $ 726 Before tax
adjustments: Share-based compensation 230 197 Fair value adjustment
in inventory acquired 5 5 Upfront and milestone payments related to
licenses and collaborations 16 9 Amortization of purchased
intangible assets 320 320 Change in fair value of contingent
consideration 14 14 Restructuring expenses 34 24 Adjustments to
income tax expense (86 ) (81 ) Non-GAAP net income $
1,168 $ 1,214 Diluted GAAP earnings per share
$ 2.80 $ 3.20 Diluted Non-GAAP earnings per share $ 5.10 $ 5.30
Operating expense and margin (% total revenues) GAAP
research and development expense 26 % 24 % Share-based compensation
(2 )% (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 % 28 % Share-based
compensation (4 )% (3 )% 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 1 % 0 %
Amortization of purchased intangible assets 9 % 9 % Change in fair
value of contingent consideration 0 % 0 % Restructuring expenses
1 % 1 % Non-GAAP operating margin 43 %
44 %
ALEXION PHARMACEUTICALS, INC. TABLE 4: NET PRODUCT
SALES (in millions) (unaudited) Three
months ended March 31 2017 2016
Soliris $ 783 $ 665 Strensiq 74 33 Kanuma 12 2 Total net
product sales $ 869 $ 700
ALEXION PHARMACEUTICALS,
INC. TABLE 5: NET PRODUCT SALES BY GEOGRAPHY (in
millions) (unaudited) Three months ended
March 31 2017 2016 United States $ 360
$ 265 Europe 248 227 Asia-Pacific 83 72 Rest of World 178
136 Total net product sales $ 869 $ 700
ALEXION
PHARMACEUTICALS, INC. TABLE 6: CONDENSED CONSOLIDATED
BALANCE SHEETS (in millions) (unaudited)
March 31 December 31 2017 2016
Cash and cash equivalents $ 713 $ 966 Marketable securities 749 327
Trade accounts receivable, net 660 650 Inventories 396 375 Prepaid
expenses and other current assets (1) 215 260 Property, plant and
equipment, net 1,138 1,036 Intangible assets, net 4,223 4,303
Goodwill 5,037 5,037 Other assets 304 299 Total assets $
13,435 $ 13,253 Accounts payable and accrued expenses
$ 607 $ 572 Deferred revenue 16 37 Current portion of long-term
debt 167 167 Current portion of contingent consideration 25 24
Other current liabilities 22 23 Long-term debt, less current
portion 2,846 2,888 Contingent consideration 132 129 Facility lease
obligation 270 233 Deferred tax liabilities 384 396 Other
liabilities 110 90 Total liabilities 4,579 4,559
Total stockholders' equity (1) 8,856 8,694 Total liabilities
and stockholders' equity $ 13,435 $ 13,253 (1) In
October 2016, the FASB issued a new income tax standard that
eliminates the exception for an intra-entity asset transfer other
than inventory. We elected to early adopt this standard in the
first quarter 2017. As a result of the adoption, we recorded a $19
million decrease in retained earnings, primarily resulting from the
elimination of previously recorded prepaid tax assets.
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Alexion
Contacts:MediaStephanie Fagan, 475-230-3777Senior
Vice President, Corporate CommunicationsorKim Diamond,
475-230-3775Executive Director, Corporate
CommunicationsorInvestorsElena Ridloff, CFA,
475-230-3601Vice President, Investor RelationsorCatherine Hu,
475-230-3599Director, Investor Relations
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