On October 29, 2020 Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) reported financial results for the third quarter of 2020 (Press release, Alexion, OCT 29, 2020, View Source [SID1234569384]). Total revenues in the third quarter were $1,588.7 million, a 26 percent increase compared to the same period in 2019. The negative impact of foreign currency on total revenues year-over-year was 2 percent, or $25.5 million, inclusive of hedging activities. On a GAAP basis, diluted EPS in the quarter was $2.62, compared to $2.08 in the prior year. Non-GAAP diluted EPS for the third quarter of 2020 was $3.24, a 16 percent increase versus the third quarter of 2019.
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"We have continued to build on our momentum from the first half of the year, delivering another strong quarter despite the ongoing challenges and uncertainty surrounding COVID-19. In the third quarter, we further progressed our LEAD-EXPAND-DIVERSIFY strategy with multiple regulatory approvals, the initiation of new Phase 3 trials and the integration of the Portola team," said Ludwig Hantson, Ph.D., Chief Executive Officer of Alexion. "Our foundation for the future is stronger than ever, and by maintaining our focus on serving patients and delivering for shareholders, I am confident that we will continue to build on our success to date and further advance our mission of delivering life-changing therapies to people with rare diseases and devastating conditions."
Third Quarter 2020 Financial Highlights
Net product sales were $1,588.3 million in the third quarter of 2020, compared to $1,263.1 million in the third quarter of 2019.
SOLIRIS net product sales were $1,042.3 million, compared to $990.5 million in the third quarter of 2019, representing a 5 percent increase.
ULTOMIRIS net product sales were $289.3 million, compared to $89.9 million in the third quarter of 2019, representing a 222 percent increase.
STRENSIQ net product sales were $189.4 million, compared to $154.3 million in the third quarter of 2019, representing a 23 percent increase.
KANUMA net product sales were $28.4 million in both of the third quarters of 2020 and 2019.
ANDEXXA/ONDEXXYA net product sales were $38.9 million in the third quarter of 2020.
GAAP cost of sales was $144.7 million, compared to $95.2 million in the third quarter of 2019. Non-GAAP cost of sales was $129.8 million, compared to $91.8 million in the third quarter of 2019.
GAAP R&D expense was $285.9 million, compared to $232.9 million in the third quarter of 2019. Non-GAAP R&D expense was $269.3 million, compared to $186.1 million in the third quarter of 2019.
GAAP SG&A expense was $334.2 million, compared to $299.3 million in the third quarter of 2019. Non-GAAP SG&A expense was $301.3 million, compared to $260.4 million in the third quarter of 2019.
GAAP income tax expense was $88.8 million, compared to $67.9 million in the third quarter of 2019. Non-GAAP income tax expense was $135.1 million, compared to $82.5 million in the third quarter of 2019.
GAAP diluted EPS was $2.62, compared to $2.08 in the third quarter of 2019. Non-GAAP diluted EPS was $3.24, compared to $2.79 in the third quarter of 2019.
COVID-19
We continue to take steps to proactively respond to the evolving COVID-19 pandemic and to plan for related uncertainties. We remain focused on continuing to serve patients, protecting the health and safety of our employees and the communities in which we live and work, and supporting patients in clinical trials. We are also focused on minimizing potential interactions that could contribute to the spread of the virus and put additional strain on healthcare systems through the use of innovative virtual means where possible.
Clinical Trials: We have implemented a pandemic response business continuity plan designed to protect patients and site staff safety while continuing our clinical trials with limited interruption to the extent we are able. The COVID-19 impact has varied by study and program, but there has been little timing impact on fully-enrolled trials. We have successfully re-initiated the majority of studies that had been temporarily paused. There has been, and may continue to be, an impact to the timing of trials that are enrolling patients and activating sites, or have not yet started to do so, based on local dynamics where these studies are being conducted.
Business Impact: We continue to take proactive measures designed to mitigate the risk of potential interruptions in supply and/or access to patients’ customary site-of-care locations. Treatment compliance rates across all our medicines have remained strong and continue to be slightly above expectations. We have also seen the predicted slowing of new patient initiations and delays in treatment starts, and we are continuing to closely monitor this environment as the pandemic continues.
Research and Development
PHASE 3/4
SOLIRIS – Neuromyelitis Optica Spectrum Disorder (NMOSD): A Phase 2/3 study of SOLIRIS in children and adolescents with NMOSD is underway.
SOLIRIS – Generalized Myasthenia Gravis (gMG): A Phase 3 study of SOLIRIS in children and adolescents with gMG is underway.
SOLIRIS – Guillain-Barre Syndrome (GBS): SOLIRIS in GBS has been granted SAKIGAKE designation by Japan’s Ministry of Health, Labour and Welfare (MHLW). Alexion plans to initiate a Phase 3 study of SOLIRIS in GBS in Japan in 2021, pending regulatory feedback.
ULTOMIRIS – Severe COVID-19: A Phase 3 randomized controlled trial of ULTOMIRIS in adults with COVID-19 who are hospitalized with severe pneumonia or acute respiratory distress syndrome is underway.
ULTOMIRIS – Paroxysmal Nocturnal Hemoglobinuria (PNH): A Phase 3 study of ULTOMIRIS in children and adolescents with PNH is underway.
ULTOMIRIS – Atypical Hemolytic Uremic Syndrome (aHUS): In September 2020, Japan’s MHLW approved ULTOMIRIS for adults and children with aHUS. A global Phase 3 study of ULTOMIRIS in children and adolescents with aHUS is underway.
ULTOMIRIS – 100 mg/mL: In October 2020, the U.S. FDA approved the ULTOMIRIS 100 mg/mL formulation for PNH and aHUS. In September 2020, Alexion announced a positive opinion for the ULTOMIRIS 100 mg/mL formulation from the European Medicines Agency Committee for Medicinal Products for Human Use. An application for approval is under review in Japan. This higher concentration formulation is designed to reduce infusion time by more than 60 percent to approximately 45 minutes.
ULTOMIRIS – Subcutaneous: The Phase 3 study of weekly subcutaneous (SC) ULTOMIRIS demonstrated PK-based non-inferiority versus intravenous ULTOMIRIS. Pending collection of 12-month safety and drug-device combination data, Alexion plans to file for approval in the U.S. and EU for the ULTOMIRIS SC formulation and device combination in PNH and aHUS in the third quarter of 2021.
ULTOMIRIS – gMG: As completion of full enrollment nears, screening of new patients has closed for the Phase 3 study of ULTOMIRIS in adults with gMG.
ULTOMIRIS – NMOSD: A Phase 3 study of ULTOMIRIS in NMOSD is underway.
ULTOMIRIS – Amyotrophic Lateral Sclerosis (ALS): A Phase 3 study of ULTOMIRIS in ALS is underway.
ULTOMIRIS – Hematopoietic Stem Cell Transplant-Associated Thrombotic Microangiopathy (HSCT-TMA): Alexion has initiated a Phase 3 study of ULTOMIRIS in adults with HSCT-TMA and plans to initiate a Phase 3 study in children with HSCT-TMA by the end of 2020.
ULTOMIRIS – Complement Mediated Thrombotic Microangiopathy (CM-TMA): Alexion plans to initiate a Phase 3 study of ULTOMIRIS in CM-TMA in the first half of 2021, pending regulatory feedback.
ALXN1840 – Wilson Disease: Enrollment is complete in a Phase 3 study of ALXN1840 in Wilson disease. Study results are expected in the first half of 2021.
CAEL-101 – Caelum Biosciences: In September 2020, Alexion and Caelum Biosciences announced the initiation of the Cardiac Amyloid Reaching for Extended Survival (CARES) Phase 3 clinical program to evaluate CAEL-101, a first-in-class amyloid fibril targeted therapy, in combination with standard-of-care therapy in AL amyloidosis. Enrollment is underway in two parallel Phase 3 studies – one in patients with Mayo stage IIIa disease and one in patients with Mayo stage IIIb disease.
ALXN2060 (AG10) – Eidos: Alexion holds an exclusive license to develop and commercialize ALXN2060 (AG10) in Japan. Eidos is currently evaluating AG10 in a Phase 3 study in the U.S. and Europe for ATTR cardiomyopathy (ATTR-CM) and plans to begin a Phase 3 study in ATTR polyneuropathy (ATTR-PN) in the second half of 2020. Alexion plans to initiate a Phase 3 bridging study of ALXN2060 for patients with ATTR-CM in Japan by the end of 2020.
ALXN2040 (Danicopan) – PNH with Extravascular Hemolysis (EVH): Alexion plans to initiate a Phase 3 study of ALXN2040 as an add-on therapy for PNH patients with EVH by the end of 2020.
ANDEXXA – Acute Intracranial Hemorrhage (ICH): The Phase 4 ANNEXA-I study – designed to provide clinical data supporting full approval – is underway to assess ANDEXXA compared to usual standard of care in patients presenting with acute intracranial hemorrhage while taking an oral Factor Xa inhibitor.
PHASE 1/2
ULTOMIRIS – Renal Diseases: Alexion plans to initiate a proof-of-concept trial of ULTOMIRIS in patients with IgA nephropathy and lupus nephritis in 2020.
ALXN1830: Due to COVID-19, Alexion discontinued the Phase 2 study of ALXN1830, administered intravenously, in warm autoimmune hemolytic anemia (WAIHA) and paused the Phase 1 study of a subcutaneous formulation of ALXN1830 in healthy volunteers. The paused Phase 1 study and new Phase 2 studies of subcutaneous ALXN1830 in gMG and WAIHA are planned to begin in 2021.
ALXN2040 – Geographic Atrophy (GA): Alexion plans to initiate a Phase 2 study of ALXN2040 in GA in the second half of 2021.
ALXN2050 – PNH: A Phase 2 study of ALXN2050 monotherapy in PNH is underway.
ALXN2050 – Renal Diseases: Alexion plans to initiate a proof-of-concept trial of ALXN2050 in patients with various renal diseases in 2021, pending regulatory feedback.
ALXN1720: Seven of nine cohorts are complete in a Phase 1 healthy volunteer study of ALXN1720, a novel anti-C5 albumin-binding bi-specific mini-body that is designed to bind and prevent activation of human C5. Remaining cohorts of the study, which had previously been paused due to COVID-19, have been restarted. Data are expected in the first half of 2021. Following successful completion of the Phase 1 study, Alexion plans to initiate Phase 2 studies of ALXN1720 in gMG and dermatomyositis (DM), pending regulatory feedback.
ANDEXXA – Urgent Surgery: ANDEXXA is currently being evaluated in a single-arm, open-label study in patients taking apixaban, rivaroxaban, edoxaban, or enoxaparin who require urgent surgery. The results of this study will inform the design of a randomized controlled clinical trial to expand the label in this population.
Cerdulatinib: Acquired as part of the Portola acquisition, cerdulatinib is a dual spleen tyrosine kinase and janus kinase (SYK/JAK) inhibitor being evaluated in a Phase 1/2a study in patients with relapsed/refractory chronic lymphocytic leukemia or B-cell or T-cell non-Hodgkin lymphoma.
Updated 2020 financial guidance assumes a GAAP effective tax rate of (5.0) to (4.5) percent and a non-GAAP effective tax rate of 15.5 to 16.0 percent. The 2020 GAAP and non-GAAP tax rates do not benefit from one-time events that benefited the tax rates in 2019.
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 other strategic agreements, intangible asset impairments, litigation charges, changes in fair value of contingent consideration, gains or losses related to strategic equity investments 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 third quarter 2020 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 6582445 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