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Alexion Delivered a Solid Financial Performance in Q1 2018

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May. 18 2018, Updated 1:19 p.m. ET

Top line

Alexion Pharmaceuticals (ALXN) generated total revenue of $931 million in the first quarter of 2018 compared to $870 million in the first quarter of 2017. The increase in its sales resulted from an increase in its unit volumes due to increased global demand for Soliris and increased sales of Strensiq and Kanuma due to Alexion’s efforts to increase its patient outreach.

The cost of sales incurred by the company was $91.6 million in the first quarter of 2018 compared to $69 million in the first quarter of 2017. This increase was the result of asset-related charges of $5.3 million as part of Alexion’s restructuring efforts.

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Operating expenses

Alexion Pharmaceuticals’ research and development expenses decreased from $219.5 million in the first quarter of 2017 to $176.6 million in the first quarter of 2018. This $42.9 million decrease was attributable to lower clinical development expenses related to eculizumab clinical studies and a decrease in payroll and benefits resulting from a reduced headcount. The company’s selling, general, and administrative expenses also witnessed a marginal fall from $261.8 million in the first quarter of 2017 to $257.1 million in the first quarter of 2018.

Alexion Pharmaceuticals incurred lower restructuring expenses of $5.5 million in the first quarter of 2018 compared to $23.8 million in the first quarter of 2017. The company’s total operating expenses decreased from $588.6 million in the first quarter of 2017 to $571.9 million in the first quarter of 2018.

As a result of its increased revenue, cost reductions, and superior operational performance, Alexion Pharmaceuticals generated operating income of $267.4 million in the first quarter of 2018 compared to $212 million in the first quarter of 2017.

Bottom line

Alexion Pharmaceuticals earned investment income of $105.8 million in the first quarter of 2018, significantly higher than its investment income of $3.9 million in the first quarter of 2017. Its interest expense of $24.1 million in the first quarter of 2018 was similar to its interest expense of $23.5 million in the first quarter of 2017.

The company’s net income jumped from $170.1 million in the first quarter of 2017 to $249.1 million in the first quarter of 2018. This translated into a net income per share of $1.11 in the first quarter of 2018 compared to $0.75 in the first quarter of 2017.

In the next part of the series, we’ll take a look at Alexion Pharmaceuticals’ cash flows and valuation metrics.

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