We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is a Beat in Store for Alexion (ALXN) This Earnings Season?
Read MoreHide Full Article
Alexion Pharmaceuticals, Inc. is scheduled to report fourth-quarter 2017 results on Feb 8, before the opening bell.
In the last quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Also, Alexion’s track record is excellent as it has consistently topped estimates in the last four quarters, with an average positive earnings surprise of 11.91%.
Moreover, Alexion’s shares have underperformed the industry in the past one year. The stock has gone down 9.4% compared with the industry’s gain of 2.9%.
What Does the Zacks Model Unveil?
Our proven model shows that Alexion is likely to beat on earnings in the to-be-reported quarter because it has the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — which have a significantly higher chance of beating estimates.
Zacks ESP: Alexion has an Earnings ESP of +8.92% as the Most Accurate estimate is $1.40 and the Zacks Consensus Estimate is pegged at $1.28. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Let’s see how things are shaping up for this announcement.
Factors Likely to Impact Q4 Results
Alexion’s blockbuster drug, Soliris, continues to perform well. Alexion continues to identify and treat a consistently high number of new patients with paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS) with Soliris, across its 50-country operating platform.
Alexion is working on expanding Soliris’ label into additional indications. The FDA recently approved the drug for the treatment of refractory gMG in patients who are anti-acetylcholine receptor antibody-positive. The drug was approved in Europe for this indication. Approximately 60,000-80,000 patients are expected to have gMG in the United States. Additionally, a phase III study (PREVENT) on Soliris in patients with relapsing neuromyelitis optica spectrum disorder is ongoing with enrollment was completed and data expected in mid-2018. Label expansion into additional indications would give Soliris access to a higher patient population and increase the commercial potential of the drug significantly. The Zacks Consensus Estimate for Soliris indicates the drug sales to increase about 1.6% from the year-ago quarter to $766 million.
Meanwhile, Strensiq continues to perform well with revenues receiving an impetus from a growing number of patients (both children as well as adults with pediatric onset disease) owing to hypophosphatasia (HPP) disease awareness and diagnostic initiatives. The company expects Strensiq to be a strong additional growth driver. The Zacks Consensus Estimate for Strensiq indicates the drug sales to increase about 31.9% from the year-ago quarter to $91 million.
Furthermore, the company announced some restructuring initiatives. In this context, Alexion plans to focus on rare diseases businesses in core areas of hematology, nephrology, neurology and metabolic disorders to enhance productivity.
Notably, the company is expected to reduce spending and headcount associated with the previously announced deprioritized pipeline programs as well as optimizing additional R&D expenses. Alexion also deprioritized ALXN1101 (cPMP replacement therapy) and ALXN6000 (samalizumab) as well as partnerships with Moderna Therapeutics, Blueprint Medicines and Arbutus Biopharma.
Consequently, the company will reduce its global workforce by approximately 20% and expects that the increased financial flexibility will allow it to reinvest approximately $100 million annually into R&D.
While, Alexion anticipates pretax savings of approximately $250 million by 2019, the total pretax restructuring and related expenses associated with the plan in the range of $340- $440 million. The company targets operating margin of 50% by the same year. Approximately 50% of the restructuring and related expenses will result in cash outlays while the same of approximately $240 million to $300 million are expected to be recorded in 2017.
In the meantime, the company’s efforts to develop its pipeline are impressive, particularly in case of ALXN1210. Currently, it is evaluating ALXN1210 (a longer-acting anti-C5 antibody that inhibits terminal complement) in phase III studies for both PNH and aHUS.
In fact, the company initiated a phase III PNH switch study of ALXN1210 administered intravenously every eight weeks compared to patients currently treated with Soliris. Therefore, we expect investors to focus on updates from ALXN1210 as the successful development and commercialization of the drug will boost growth prospects. A tentative approval for PNH is expected in 2019.
However, Soliris’ quarter-to-quarter revenue growth will be impacted by the enrollment ramp up of trials on ALXN1210 (by $80-90 million), particularly in the second half of 2017.
Alexion Pharmaceuticals, Inc. Price and EPS Surprise
Here are some biotech stocks that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this quarter.
Alkermes (ALKS - Free Report) is scheduled to release fourth-quarter results on Feb 21. The company has an Earnings ESP of +34.12% and a Zacks Rank #2.
Anthera Pharmaceuticals (ANTH - Free Report) is expected to release fourth-quarter results on Feb 26. The company has an Earnings ESP of +20.47% and a Zacks Rank #2.
Exelixis (EXEL - Free Report) , which is expected to release fourth-quarter results on Feb 26, has an Earnings ESP of +21.98% and a Zacks Rank #1.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
Is a Beat in Store for Alexion (ALXN) This Earnings Season?
Alexion Pharmaceuticals, Inc. is scheduled to report fourth-quarter 2017 results on Feb 8, before the opening bell.
In the last quarter, the company’s earnings surpassed the Zacks Consensus Estimate. Also, Alexion’s track record is excellent as it has consistently topped estimates in the last four quarters, with an average positive earnings surprise of 11.91%.
Moreover, Alexion’s shares have underperformed the industry in the past one year. The stock has gone down 9.4% compared with the industry’s gain of 2.9%.
What Does the Zacks Model Unveil?
Our proven model shows that Alexion is likely to beat on earnings in the to-be-reported quarter because it has the right combination of two key ingredients — a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) — which have a significantly higher chance of beating estimates.
Zacks ESP: Alexion has an Earnings ESP of +8.92% as the Most Accurate estimate is $1.40 and the Zacks Consensus Estimate is pegged at $1.28. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Alexion’s Zacks Rank #3, when combined with a positive ESP makes us reasonably confident of an earnings beat. You can see the complete list of today’s Zacks #1 Rank stocks here.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Let’s see how things are shaping up for this announcement.
Factors Likely to Impact Q4 Results
Alexion’s blockbuster drug, Soliris, continues to perform well. Alexion continues to identify and treat a consistently high number of new patients with paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS) with Soliris, across its 50-country operating platform.
Alexion is working on expanding Soliris’ label into additional indications. The FDA recently approved the drug for the treatment of refractory gMG in patients who are anti-acetylcholine receptor antibody-positive. The drug was approved in Europe for this indication. Approximately 60,000-80,000 patients are expected to have gMG in the United States. Additionally, a phase III study (PREVENT) on Soliris in patients with relapsing neuromyelitis optica spectrum disorder is ongoing with enrollment was completed and data expected in mid-2018. Label expansion into additional indications would give Soliris access to a higher patient population and increase the commercial potential of the drug significantly. The Zacks Consensus Estimate for Soliris indicates the drug sales to increase about 1.6% from the year-ago quarter to $766 million.
Meanwhile, Strensiq continues to perform well with revenues receiving an impetus from a growing number of patients (both children as well as adults with pediatric onset disease) owing to hypophosphatasia (HPP) disease awareness and diagnostic initiatives. The company expects Strensiq to be a strong additional growth driver. The Zacks Consensus Estimate for Strensiq indicates the drug sales to increase about 31.9% from the year-ago quarter to $91 million.
Furthermore, the company announced some restructuring initiatives. In this context, Alexion plans to focus on rare diseases businesses in core areas of hematology, nephrology, neurology and metabolic disorders to enhance productivity.
Notably, the company is expected to reduce spending and headcount associated with the previously announced deprioritized pipeline programs as well as optimizing additional R&D expenses. Alexion also deprioritized ALXN1101 (cPMP replacement therapy) and ALXN6000 (samalizumab) as well as partnerships with Moderna Therapeutics, Blueprint Medicines and Arbutus Biopharma.
Consequently, the company will reduce its global workforce by approximately 20% and expects that the increased financial flexibility will allow it to reinvest approximately $100 million annually into R&D.
While, Alexion anticipates pretax savings of approximately $250 million by 2019, the total pretax restructuring and related expenses associated with the plan in the range of $340- $440 million. The company targets operating margin of 50% by the same year. Approximately 50% of the restructuring and related expenses will result in cash outlays while the same of approximately $240 million to $300 million are expected to be recorded in 2017.
In the meantime, the company’s efforts to develop its pipeline are impressive, particularly in case of ALXN1210. Currently, it is evaluating ALXN1210 (a longer-acting anti-C5 antibody that inhibits terminal complement) in phase III studies for both PNH and aHUS.
In fact, the company initiated a phase III PNH switch study of ALXN1210 administered intravenously every eight weeks compared to patients currently treated with Soliris. Therefore, we expect investors to focus on updates from ALXN1210 as the successful development and commercialization of the drug will boost growth prospects. A tentative approval for PNH is expected in 2019.
However, Soliris’ quarter-to-quarter revenue growth will be impacted by the enrollment ramp up of trials on ALXN1210 (by $80-90 million), particularly in the second half of 2017.
Alexion Pharmaceuticals, Inc. Price and EPS Surprise
Alexion Pharmaceuticals, Inc. Price and EPS Surprise | Alexion Pharmaceuticals, Inc. Quote
Stocks That Warrant a Look
Here are some biotech stocks that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this quarter.
Alkermes (ALKS - Free Report) is scheduled to release fourth-quarter results on Feb 21. The company has an Earnings ESP of +34.12% and a Zacks Rank #2.
Anthera Pharmaceuticals (ANTH - Free Report) is expected to release fourth-quarter results on Feb 26. The company has an Earnings ESP of +20.47% and a Zacks Rank #2.
Exelixis (EXEL - Free Report) , which is expected to release fourth-quarter results on Feb 26, has an Earnings ESP of +21.98% and a Zacks Rank #1.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>