Alexion Pharmaceuticals Inc. (ALXN) reported fourth quarter earnings per share (EPS) of 25 cents, a cent above the Zacks Consensus Estimate and well above 17 cents reported in the year-ago quarter. Reported quarter’s results do not include an income tax benefit of $214.5 million. For the full year of 2009, Alexion’s EPS came in at 92 cents compared to 39 cents reported in 2008.
Alexion’s revenues increased 43% to $110.6 million from $77.4 million in the corresponding period of 2008 driven by strong Soliris (eculizumab) sales. Soliris posted robust sales primarily due to the addition of a significant number of new patients in both the US and Europe. The strong Soliris growth led to a 49% growth in 2009 revenues which came in at $386.8 million.
Soliris is Alexion’s only US Food and Drug Administration (FDA) approved product (approval received in March 2007), indicated for the treatment of paroxysmal nocturnal hemoglobinuria (PNH).
Operating expenses during the reported quarter were $75.1 million, an increase of 38.8% compared to $54.1 million in the corresponding period of 2008 due to a hike in both R&D (52% rise) and SG&A (33.8% rise) expenses. The increase primarily reflects the expansion of Alexion’s clinical trial programs and higher costs associated with the expansion of commercial operations in existing markets in the US and Europe as well as several other countries. We expect these costs to increase further as the company is exploring the use of Soliris in other indications besides PNH.
At the end of 2009, Alexion had $176.2 million in cash, cash equivalents and marketable securities, up from $138 million at the end of 2008. Recently, the company’s Rhode Island manufacturing facility received final approval from the European Commission as a second source of supply for Soliris. FDA approval is expected by the end of 2010.
Alexion also provided its outlook for 2010. The company expects net product sales of Soliris in the range of $505 to $520 million with gross margin of 87-88%. We have a Neutral recommendation on the stock.
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