On April 28, 2016 Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) reported financial results for the first quarter of 2016 (Press release, Alexion, APR 28, 2016, View Source [SID:1234511536]). Total revenues grew to $701 million, a 17 percent increase, compared to $600 million for the same period in 2015. In the first quarter, the negative impact of currency on total revenue was 5 percent or $30 million, net of hedging activities, compared to the same quarter last year. First quarter revenue growth was further negatively impacted by increased macroeconomic weakness in Latin American countries, primarily Brazil and Argentina. Non-GAAP diluted earnings per share (EPS) for the first quarter of 2016 was $1.11 per share, compared to $1.28 per share in the first quarter of 2015. On a GAAP basis, diluted EPS for the first quarter of 2016 was $0.41 per share, compared to $0.45 per share in the first quarter of 2015.
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"In Q1 2016, we grew our core Soliris business by serving a steady number of new patients with PNH and aHUS in the U.S., Europe and Japan, partially offset by the increased impact of macroeconomic weakness in Latin America. We are very pleased with the strong start to the Strensiq launches in initial countries and have now commenced the U.S. launch of Kanuma," said David Hallal, Chief Executive Officer of Alexion. "We look forward to 2016 being another transformative year for Alexion as we serve an increasing number of patients with four devastating, ultra-rare diseases and progress multiple milestones in our robust rare disease pipeline."
First Quarter 2016 Financial Highlights
Soliris (eculizumab) net product sales were $665 million compared to $600 million in Q1 2015. Net product sales increased 11 percent year-on-year, despite continued currency headwinds as well as increased macroeconomic weakness in Latin American countries, primarily Brazil and Argentina. Soliris volume increased 18 percent year-on-year.
Strensiq (asfotase alfa) net product sales were $33 million.
Kanuma (sebelipase alfa) net product sales were $2.5 million.
Non-GAAP R&D expense was $158 million, compared to $97 million in the same quarter last year. GAAP R&D expense was $176 million, compared to $221 million in the same quarter last year.
Non-GAAP SG&A expense was $194 million, compared to $157 million in the same quarter last year. GAAP SG&A expense was $233 million, compared to $187 million in the same quarter last year.
Non-GAAP diluted EPS was $1.11 per share, compared to $1.28 per share in the same quarter last year. On a GAAP basis, diluted EPS was $0.41 per share, compared to $0.45 per share in the same quarter last year.
Product and Pipeline Updates
Complement Portfolio
Eculizumab—Generalized Myasthenia Gravis (gMG): Enrollment is complete in the REGAIN study, a single, multinational, placebo-controlled registration trial of eculizumab in refractory gMG, and data are expected in mid-2016.
Eculizumab—Neuromyelitis Optica Spectrum Disorder (NMOSD): Alexion expects to complete enrollment this year in the PREVENT study, a single, multinational, placebo-controlled registration trial of eculizumab in patients with relapsing NMOSD.
Eculizumab—Delayed Graft Function (DGF): Enrollment is complete in the PROTECT study, a single, multinational, placebo-controlled registration trial of eculizumab in the prevention of DGF, and data are expected in the second half of 2016.
ALXN1210: Alexion exceeded target enrollment in both a Phase 1/2 study and a Phase 2 study of ALXN1210, our highly innovative longer-acting C5 antibody, in patients with paroxysmal nocturnal hemoglobinuria (PNH), and we expect data from the Phase 1/2 study to be presented in mid-2016. Alexion also expects to initiate a clinical program in patients with atypical hemolytic uremic syndrome (aHUS) later this year.
ALXN1007: Alexion is continuing to advance the development of ALXN1007, a complement inhibitor that targets C5a, in patients with graft-versus-host disease involving the lower gastrointestinal tract (GI-GVHD). Interim Phase 2 data reported in the fourth quarter of 2015 support the evaluation of higher doses of ALXN1007 in additional patients with acute GI-GVHD.
Metabolic Portfolio
Strensiq: New long-term data presented at the Endocrine Society’s 98th Annual Meeting and Expo (ENDO) in April showed sustained improvements in survival rates, bone healing, respiratory support, and growth and mobility in children with HPP treated with Strensiq. In addition, the data presented at ENDO showed that adolescent and adult patients treated with Strensiq reduced or eliminated their need of ambulatory assistive devices and had improvements in physical function as measured by the Six Minute Walk Test.
Kanuma: Kanuma received marketing approval from Japan’s Ministry of Health, Labour and Welfare on March 28, 2016. Additionally, new data presented by researchers at the WORLDSymposium meeting in March showed a substantial survival benefit beyond 2 years of age in infants with LAL-D treated with Kanuma.
SBC-103: Alexion has commenced the planned dose escalation in the Phase 1/2 trial of SBC-103, a recombinant form of the NAGLU enzyme, in patients with mucopolysaccharidosis IIIB, or MPS IIIB. Patients are now being randomized to either a 5 mg/kg or 10 mg/kg dose. Six-month data presented at the WORLDSymposium meeting in March showed continued reductions in heparan sulfate cerebrospinal fluid with a mean reduction of 26% in the highest dose studied, 3 mg/kg.
cPMP Replacement Therapy (ALXN1101): Alexion is progressing a pivotal study to evaluate ALXN1101 in neonates with Molybdenum Cofactor Deficiency (MoCD) Type A. Alexion received Breakthrough Therapy designation for its cPMP replacement therapy.
Preclinical Portfolio
Alexion has more than 30 diverse preclinical programs across a range of therapeutic modalities, with four of these programs expected to enter the clinic in 2016.
2016 Financial Guidance
Alexion expects 2016 total revenues to be at the low end of our previously guided range of $3,050 million to $3,100 million, primarily due to increased macroeconomic weakness in Latin America, partially offset by an increase in Strensiq revenues and the strengthening of foreign currencies.
R&D and SG&A expenses are expected to be at the high end of guidance primarily due to continued investment in key programs in our R&D pipeline and the commercial launches of Strensiq and Kanuma, as well as the strengthening of foreign currencies.
Alexion expects 2016 non-GAAP EPS to be at the low end of the previously guided range of $5.00 to $5.20 per share.
Updated 2016 non-GAAP financial guidance is as follows:
Updated Guidance (1) Prior Guidance (1)
Total revenues Low end of $3,050 to $3,100 million $3,050 to $3,100 million
Soliris revenues $2,835 to $2,875 million $2,900 to $2,925 million
Metabolic revenues $180 to $200 million $150 to $175 million
Cost of sales 8% to 9% 8% to 9%
Research and development expense High end of $650 to $680 million $650 to $680 million
Selling, general and administrative expense High end of $760 to $790 million $760 to $790 million
Interest expense $100 million $100 million
Effective tax rate 7% to 8% 7% to 8%
Earnings per share Low end of $5.00 to $5.20 $5.00 to $5.20
Diluted shares outstanding 230 million 230 million
(1) Financial guidance is based on forecasted results at current spot rates net of hedging activities.