On April 25, 2019 Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) reported financial results for the first quarter of 2019 (Press release, Alexion, APR 25, 2019, View Source [SID1234535384]). Total revenues in the first quarter were $1,140.4 million, a 23 percent increase compared to the same period in 2018. The negative impact of foreign currency on total revenues year-over-year was 1 percent, or $12.3 million, inclusive of hedging activities. On a GAAP basis, diluted EPS in the quarter was $2.61, a 135 percent increase versus the prior year. Non-GAAP diluted EPS for the first quarter of 2019 was $2.39, a 42 percent increase versus the first quarter of 2018.

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"We had a great start to 2019, with a strong launch in ULTOMIRIS’ first full quarter since FDA approval. We’ve also made significant progress executing and expanding our pipeline. This progress includes three business development deals, multiple filings under regulatory review and having begun dosing patients in two new ULTOMIRIS Phase 3 programs," said Ludwig Hantson, Ph.D., Chief Executive Officer of Alexion. "We look forward to continuing to build on our momentum as the year progresses, further growing our four durable franchises in hematology/nephrology, neurology, metabolics and FcRn."

First Quarter 2019 Financial Highlights

Total net product sales were $1,140.2 million in the first quarter of 2019, compared to $930.4 million in the first quarter of 2018.
SOLIRIS (eculizumab) net product sales were $962.0 million, compared to $800.1 million in the first quarter of 2018, representing a 20 percent increase. SOLIRIS volume increased 23 percent year-over-year.
ULTOMIRIS (ravulizumab-cwvz) net product sales were $24.6 million in its first full quarter since FDA approval.
STRENSIQ (asfotase alfa) net product sales were $130.1 million, compared to $110.7 million in the first quarter of 2018, representing an 18 percent increase. STRENSIQ volume increased 26 percent year-over-year.
KANUMA (sebelipase alfa) net product sales were $23.5 million, compared to $19.6 million in the first quarter of 2018, representing a 20 percent increase. KANUMA volume increased 28 percent year-over-year.
GAAP cost of sales was $85.8 million, compared to $91.6 million in the first quarter of 2018. Non-GAAP cost of sales was $82.1 million, compared to $83.0 million in the first quarter of 2018.
GAAP R&D expense was $195.9 million, compared to $176.6 million in the first quarter of 2018. Non-GAAP R&D expense was $159.4 million, compared to $161.6 million in the first quarter of 2018.
GAAP SG&A expense was $281.5 million, compared to $257.1 million in the first quarter of 2018. Non-GAAP SG&A expense was $243.7 million, compared to $220.4 million in the first quarter of 2018.
GAAP income tax benefit was $46.1 million, compared to income tax expense of $102.5 million in the first quarter of 2018. GAAP income tax benefit for the first quarter 2019 includes deferred tax benefits of $95.7 million and $30.3 million associated with a tax election related to intellectual property and release of an existing valuation allowance, respectively. Non-GAAP income tax expense was $100.9 million, compared to $68.6 million in the first quarter of 2018.
GAAP diluted EPS was $2.61, compared to $1.11 in the first quarter of 2018. GAAP diluted EPS for the first quarter 2019 includes deferred tax benefits of $95.7 million and $30.3 million associated with a tax election related to intellectual property and release of an existing valuation allowance, respectively. Non-GAAP diluted EPS was $2.39, compared to $1.68 in the first quarter of 2018.
Research and Development

PHASE 3

SOLIRIS – Neuromyelitis Optica Spectrum Disorder (NMOSD): In February 2019, Alexion announced that the U.S. Food and Drug Administration (FDA) granted Priority Review for SOLIRIS in NMOSD and set a Prescription Drug User Fee Act (PDUFA) action date of June 28, 2019. Alexion has filed for regulatory approval in the European Union (EU) and Japan, and orphan drug priority review has been granted in Japan. These filings are based on previously announced results from the Phase 3 PREVENT study, in which 97.9 percent of patients with anti-aquaporin-4 (AQP4) auto antibody-positive NMOSD who received SOLIRIS on top of stable standard-of-care therapy were relapse free at 48 weeks compared to 63.2 percent of patients who received placebo.
ULTOMIRIS – Paroxysmal Nocturnal Hemoglobinuria (PNH): Applications for approval in the EU and Japan are currently under review. In addition, a Phase 3 study of ULTOMIRIS in children and adolescents with PNH is underway.
ULTOMIRIS – Atypical Hemolytic Uremic Syndrome (aHUS): In April 2019, Alexion submitted an application in the U.S. for the approval of ULTOMIRIS in patients with aHUS. The filing was based on previously announced positive topline results from a Phase 3 study of ULTOMIRIS in complement inhibitor naïve patients with aHUS. Alexion plans to file for regulatory approval in the EU and Japan in 2019. In addition, a Phase 3 study of ULTOMIRIS in adolescents and children with aHUS is underway.
ULTOMIRIS – Subcutaneous: Enrollment and dosing are underway in a single, PK-based Phase 3 study of ULTOMIRIS delivered subcutaneously once per week to support registration in PNH and aHUS. Data are expected in early 2020.
ULTOMIRIS – Generalized Myasthenia Gravis (gMG): In the first quarter of 2019, Alexion initiated a Phase 3 study of ULTOMIRIS in gMG.
ULTOMIRIS – Neuromyelitis Optica Spectrum Disorder (NMOSD): Alexion plans to initiate a Phase 3 study of ULTOMIRIS in NMOSD by the end of 2019.
ALXN1840 (WTX101) – Wilson Disease: Enrollment and dosing are underway in a Phase 3 study of ALXN1840 (WTX101) in Wilson disease, a rare genetic disorder with devastating hepatic and neurological consequences. The study is now powered for superiority versus standard-of-care therapy. ALXN1840 is a first-in-class oral copper-binding agent with a unique mechanism of action to bind serum copper and promote its removal from the liver.

PHASE 1/2

ALXN1830 (SYNT001): Alexion plans to initiate two Phase 2/3 trials of ALXN1830 (SYNT001) in late 2019 or early 2020 – one in warm autoimmune hemolytic anemia (WAIHA) and one in gMG.
ALXN1810 – Subcutaneous: In the first quarter of 2019, Alexion completed dosing in a Phase 1 study of subcutaneous ALXN1210 co-administered with Halozyme’s ENHANZE drug-delivery technology, recombinant human hyaluronidase enzyme (rHuPH20), a next-generation subcutaneous formulation called ALXN1810.
ULTOMIRIS – Amyotrophic Lateral Sclerosis (ALS): Alexion plans to initiate a proof-of-concept study for ULTOMIRIS in ALS.
ULTOMIRIS – Primary Progressive Multiple Sclerosis (PPMS): Alexion plans to initiate an exploratory clinical study of ULTOMIRIS in PPMS.
Caelum Biosciences – CAEL-101 – Light Chain (AL) Amyloidosis: In January 2019, Alexion entered into a collaboration with Caelum Biosciences to develop CAEL-101 for AL amyloidosis, a rare systemic disorder that causes misfolded immunoglobulin light chain protein to build up in and around tissues, resulting in progressive and widespread organ damage. CAEL-101 is a first-in-class amyloid fibril targeted therapy designed to improve organ function by reducing or eliminating amyloid deposits in patients with AL amyloidosis. In a Phase 1a/1b study, CAEL-101 demonstrated improved organ function, including cardiac and renal function, in patients with relapsed and refractory AL amyloidosis. Pending regulatory feedback, a Phase 2/3 study investigating CAEL-101 as an add-on to current standard-of-care therapy is planned to begin in early 2020.
Affibody AB – ABY-039: In March 2019, Alexion announced a partnership with Affibody AB to co-develop ABY-039 for rare Immunoglobulin G (IgG)-mediated autoimmune diseases. Pending relevant regulatory approvals, the transaction is expected to close in the second quarter of 2019. Currently in Phase 1 development, ABY-039 is a bivalent antibody-mimetic that targets the neonatal Fc receptor (FcRn). ABY-039 has been specifically designed to combine Affibody’s protein therapeutics platform (Affibody molecules) and Albumod technology to achieve a long half-life, which, along with its small size provides the potential for less frequent, convenient, at-home subcutaneous administration.

PRE-CLINICAL

ALXN1720: In March 2019, Alexion announced the development of ALXN1720, a novel anti-C5 albumin-binding bi-specific mini-body that binds and prevents activation of human C5. Alexion plans to initiate a first-in-human study of ALXN1720 in late 2019.
Zealand Pharma A/S: In March 2019, Alexion began a collaboration with Zealand Pharma A/S to discover and develop novel peptide therapies for up to four targets in the complement pathway. Peptides offer a number of advantages, including being highly selective and potent, allowing low dosage volumes for ease of administration, and having the potential to treat a broad range of complement-mediated diseases.
Dicerna – GalXC: Alexion is collaborating with Dicerna Pharmaceuticals to jointly discover and develop up to four subcutaneously delivered GalXC RNA interference (RNAi) candidates, currently in pre-clinical development, for the treatment of complement-mediated diseases.
Complement Pharma – CP010: Alexion is collaborating with Complement Pharma to co-develop CP010, a pre-clinical C6 inhibitor that has the potential to treat multiple neurological disorders.

GAAP guidance reflects the financial impact of the announced collaboration with Affibody.
GAAP effective tax rate of 7 to 9 percent; non-GAAP effective tax rate of 14 to 16 percent.
Alexion’s financial guidance is based on current foreign exchange rates net of hedging activities and does not include the effect of acquisitions, license and collaboration agreements, intangible asset impairments, litigation charges, changes in fair value of contingent consideration or restructuring and related activity outside of the previously announced activities that may occur after the issuance of this press release.

Conference Call/Webcast Information:

Alexion will host a conference call/audio webcast to discuss the first quarter 2019 results today at 8:00 a.m. Eastern Time. To participate in the call, dial 866-762-3111 (USA) or 210-874-7712 (International), conference ID 1692605 shortly before 8:00 a.m. Eastern Time. A replay of the call will be available for a limited period following the call. The audio webcast can be accessed on the Investor page of Alexion’s website at: View Source