Behind Alexion’s Updated Guidance for Its Metabolic Franchise



Alexion’s updated guidance for 2016

During the second quarter of 2016, Alexion (ALXN) witnessed 23% volume growth, resulting in an 18% annual revenue growth. The company expects this strong performance from its commercialized drugs to continue through 2016.

ALXN now expects revenue from metabolic franchise to increase to $200 million–$220 million in fiscal 2016, up from its earlier anticipated revenue of $180 million–$200 million. With changes in its non-GAAP (generally accepted accounting principles) tax rate, Alexion has also revised its EPS (earnings per share) number for 2016 from $4.50 to $4.65.

In 2Q16, Strensiq became a new driver for Alexion through strong performance. ALXN has since updated its guidance for its metabolic franchise.

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Long-term capital allocation strategy

Alexion’s long-term capital allocation strategy includes:

  • investments in Soliris
  • the launch of Strensiq and Kanuma
  • prioritization of pipeline development
  • exploring any external opportunity with strategic fit
  • opportunistic share repurchase

At the end of 2Q16, Alexion had $1.2 billion cash and cash equivalents on its balance sheet.

How much is Alexion’s 3Q16 guidance?

During 3Q16, Alexion expects total revenues to lie in a range of $780 million–$790 million. With the advancement of its pipeline candidates, there will likely be an increase in the R&D (research and development) expenses. Non-GAAP diluted EPS are anticipated to be $1.14–$1.18.

To divest risk, investors can choose the iShares S&P 500 Growth ETF (IVW), which has ~4.4% of its portfolio in the biotechnology sector and has exposure to Gilead Sciences (GILD), Pfizer (PFE), and Allergan (AGN). Alexion accounts for 0.31% of IVW’s total holdings.

Continue to the next part for performance details of Soliris in 2Q16.


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