Alexion Pharmaceuticals Raised 2017 Earnings Guidance



Earnings guidance

In its 2Q17 earnings conference call, Alexion Pharmaceuticals (ALXN) raised its 2017 non-GAAP (generally accepted accounting principles) guidance from the previously estimated $5.10–$5.30 to $5.40–$5.55. Considering the company’s 2017 non-GAAP EPS (earnings per share) to be close to the midpoint of this new, updated range, it will imply a YoY (year-over-year) rise of around 19.0%.

In its 2Q17 earnings conference call, Alexion Pharmaceuticals reiterated that its 2017 non-GAAP operating margins will fall 43.0%–44.0%. All these projections have assumed a non-GAAP tax rate of 13.0%–14.0%.

If Alexion Pharmaceuticals manages to surpass these margin projections, it may have a favorable impact on the stock as well as the stock of the PowerShares QQQ ETF (QQQ). Alexion Pharmaceuticals makes up about 0.47% of QQQ’s total portfolio holdings.

Wall Street analysts have projected that in 2017, Alexion Pharmaceuticals’ net profit margin will be 21.0%, a YoY rise of around 810 basis points.

For 2017, peers such as Bioverativ (BIVV), Vertex Pharmaceuticals (VRTX), and United Therapeutics (UTHR) are expected to report net profit margins of 25.3%, 13.6%, and 44.6%, respectively.

Article continues below advertisement

Major growth drivers in 2017

Robust demand for Soliris across geographies and the rapid uptake of Strensiq due to gradually reducing access constraints have been the key growth drivers for Alexion Pharmaceuticals in 2017. The company also aims to increase the adoption of Kanuma, the drug for lysosomal acid lipase deficiency (or LAL-D) by creating awareness for diagnostic tests used to identify the target patients.

On June 23, 2017, Alexion Pharmaceuticals also announced that it had received a positive opinion from the Committee for Medicinal Products for Human Use for Soliris in the refractory generalized myasthenia gravis (or gMG) indication.

In the next part, we’ll look at Alexion Pharmaceuticals’ long-term growth drivers.


More From Market Realist