Alexion Soars on Q1 Results

As recently as yesterday, 2013 wasn't looking too great for shareholders of Alexion Pharmaceuticals (NASDAQ: ALXN  ) . The stock was down nearly 11% for the year. Today is a different story. Alexion announced great first-quarter results, sending shares soaring over 9% in midday trading. Here are the highlights.

By the numbers
Non-GAAP earnings went through the roof during the first quarter of 2013 compared with the same period last year. Alexion reported non-GAAP earnings of $131.3 million, or $0.65 per share -- up a whopping 49% from last year. This figure easily beat the average analyst earnings estimate of $0.61 per share.

On a GAAP basis, earnings for the quarter came in at $82.2 million, or $0.41 per share. That reflects a jump of 81% year over year.

Net product sales for first quarter totaled $338.9 million. This result marked a hefty increase of 38% over the same quarter in 2012 and was slightly higher than the $336.5 average estimate from analysts.

Alexion's cash stockpile, including cash equivalents, stood at $1.02 billion at the end of the first quarter. The company had $989.5 million in cash and equivalents at the end of 2012.

Behind the numbers
Alexion's results are still all about Soliris. The drug is the first and only approved treatment for two extremely rare diseases -- paroxysmal nocturnal hemoglobinuria, or PNH, and atypical hemolytic uremic syndrome, or aHUS.

Company CEO Leonard Bell, M.D., said that increasing numbers of patients with PNH across the world are using Soliris. He also noted that initial aHUS patients in Western Europe began treatments, adding to the growing number of aHUS patients in the U.S. taking the drug.

Earnings improved tremendously despite large expense increases in a couple of areas. Alexion spent $74.5 million on research and development during the first quarter, an increase of 64% year over year. The company also reported higher selling, general, and administrative costs of $108.8 million, up from $87.2 million during the same period of 2012.

Looking ahead
Alexion raised its full-year earnings guidance to a range of $2.87 to $2.97 per share. The company previously estimated 2013 earnings of $2.82 to $2.92 per share.

The 2013 revenue outlook also looks brighter. Alexion upped revenue guidance from a range of $1.49 billion to $1.50 billion to a new range of $1.50 billion to $1.52 billion.

Some might look down on this biotech as a one-trick pony, since all of its revenue currently comes from a single drug. However, there are two factors that I think are worth noting.

First, this pony's one trick is really, really good. Soliris continues to grow sales and has no competition. In addition, Alexion has research under way with hopes to expand the indications for the drug.

Second, Alexion probably won't rely solely on one drug forever. The company has four other drugs in development that target ultra-rare diseases. Most notably, Alexion completed enrollment during the first quarter in a study of asfotase alfa in treating infants with hypophosphatasia, a very rare metabolic disease.

I suspect that Alexion will finish 2013 much more strongly than it started. While shares of this biotech won't experience the phenomenal type of growth seen from 2006 to 2012, this still looks like a good stock for investors to consider.

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