Analyst Conference Summary


Alexion Pharmaceuticals

conference date: October 24, 2013 @ 7:00 AM Pacific Time
for quarter ending: September 30, 2013 (third quarter 2013, Q3)

Forward-looking statements

Overview: Continued rapid revenue ramp. Raised guidance.

Basic data (GAAP):

Revenue was $400.4 million, up 8% sequentially from $370.1 million, and up 36% from $294.1 million in the year-earlier quarter.

Net income was $93.8 million, down 2% sequentially from $95.9 million, but up 2% from $92.2 million year-earlier.

EPS (earnings per share) was $0.47, down 2% sequentially from $0.48 but up 2% from $0.46 year-earlier.


Alexion raised guidance for full year 2013: revenue $1.535 to $1.54 billion. Non-GAAP EPS range $3.02 to $3.04.

Conference Highlights:

"In Q4 we are further expanding our commercial and clinical initiatives as we prepare for further growth in 2014." Believes there are 6 potential major product approvals between 2014 and 2018.

Non-GAAP numbers: net income was $167.9 million, up 14% sequentially from $147.2 million and up 39% from $120.7 million year-earlier. EPS $0.83, up from $0.60 year-earlier.

Soliris sales were $400.4 million, up 36% y/y. Both indications, PNH and aHUS, saw patient additions. Approved for aHUS in Japan. Made progress in Turkey, Brazil, and Russia as well as Latin America. Believes can grow number of patients even in established area by better screening and by the natural increase over time. The majority of patients starting Soliris are newly diagnosed with PNH.

Soliris is in multiple developmental programs. In the quarter preliminary data was presented in a kidney transplant trial for AMR (Antibody-Mediated Rejection), will enrollment ongoing. For Neuromyelitis Optica a relapsing NMO registrational trial is planned. For Myasthenia Gravis (MG) a registrational trial is planned to commence by the end of 2013. A Delayed Graft Function (DGF) trial is planned to begin in 2014.

Asfotase Alfa for hypophosphatasia (HPP) positive data was presented in the quarter; regulatory filings likely in 2014.

Other therapies under study include Phase I trials for ALXN 1007 for anti-inflammatory indictations and ALXN 1102/1103, a complement inhibitor.

Cash and equivalents balance $1.3 billion, up sequentially from $1.12 billion.

GAAP cost of sales was $51.4 million. R&D expense was $88.2 million. SG&A expense was $122.9 million. Acquisition expenses was $2.6 million. Amortization was $0.1 million. Total operating expenses were $213,8 million, leaving operating income of $135.3 million. Interest and other expense was $1,0 million. Income tax provision was $40.5 million.

$20.7 million of expense related to: a license payment under a new drug discovery collaboration; and settlement of Novartis IP litigation. This was excluded from non-GAAP results.

Believes is likely to receive major product approvals between 2014 and 2018 starting with Asfotase Alfa in late 2014. This will include follow-on re-designs of the Soliris molecule.

The FDA has now approved the Singapore facility.

South Korea is the next country in the global PNH rollout. In Europe reimbursement discussions for aHUS continue. Alexion believes the aHUS opportunity worldwide is at least as large as has been the case for PNH.


aHUS Japan opportunity? Thinking back to the U.S. launch, there is not necessarily as large of a pool of patients as with PNH given the high levels of mortality. As we saw in the U.S. there will be a small prevalent pool, then building with patients newly presenting with TMA. There is no list of patients, but a list of nephrologists and hematologists who are likely to have encountered TMA. The majority of patients for Soliris are presenting with rapidly progressing TMA.

aHUS persistency of dosing, pricing concessions? Compliance in aHUS is generally good. When the physician conviction on diagnosis is strong, we see success over the long run. Not all patients have an identifiable mutation, but will still have aHUS. Data shows Soliris improves outcomes over time.

aHUS pricing concessions in Europe? aHUS and PNH are ultra-rare life-threatening disorders on which Soliris has a significant positive impact. AHUS disproportionately affects young children. We anticipate governments will recognize the value of Soliris, so we expect smaller and less frequent downward price revisions than are seen with most products.

Filing timeline for Asfotase Alfa? HPP discussions with the FDA have been more frequent since the designation we received earlier this year. We won't have to do a pre-approval placebo-controlled trial. But we will have to do a natural history study. We are looking at mid-year 2014 for filings in the U.S., Europe and Japan.

Roche competition in dry AMD? We have a broad portfolio of novel assets targetting the cascade at multiple stages. All are applicable should we decide to go forward in a multitude of eye disorders. Our focus on this has increased somewhat.

The literature is not clear on the age group relation to HPP incidence.

Delayed graft trial design? Data from prior studies and from deceased donor study was discussed with regulators. We feel very positive about the study and our talks with regulators.

The Asfotase Alfa natural history study of HPP is a pre-approval commitment. We are working on an HPP registry.

Size of NMO-CD population? It is rare and deadly, so we are not sure. There is no therapy. We are establishing a team to try to assess the prevalence. Most victims die shortly after birth.

Expenses going forward? We have been tracking around 18% to 19% of revenue for R&D expense and expect that to continue.

Our focus is to remain disciplined, targetting rare devastating diseases where Soliris or other therapies can totally transform the lives of patients. [Which allows for high drug prices]

OpenIcon Analyst Conference Summaries Main Page



More Analyst Conference Pages:



Disclaimer: My analyst call summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. Before making or terminating an investment you should always verify any factual basis of your decision.

Copyright 2013 William P. Meyers