What happened
Shares of Alexion Pharmaceuticals (ALXN) fell over 19% last month, according to data provided by S&P Global Market Intelligence. That shouldn't be too surprising to investors considering the broad stock market sell-off in October, or the fact that the $28 billion biopharma has seen its stock go nowhere fast since the beginning of 2014. Shares have lost 4% in those five years, essentially moving sideways as investors wait for the business to grow into its premium valuation and make up for giant acquisitions that will be remembered as failures.
If third-quarter 2018 results were any indication, however, then the biopharma finally might be poised for growth. The business delivered over $1 billion in revenue for the quarter thanks to a 20% year-over-year surge. That prompted management to raise full-year 2018 guidance and tease important catalysts on tap for the first half of 2019.
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So what
Alexion Pharmaceuticals increased its full-year 2018 revenue guidance to a range of $4.02 billion to $4.05 billion, up from a previous range that sported a high point of $4.01 billion. It will be driven almost entirely by an expected $3.47 billion in Soliris sales. The anchor of the product portfolio may soon get some help thanks to two regulatory decisions scheduled for 2019.
In addition to near-term catalysts for potential new products, Alexion Pharmaceuticals has a handful of promising drug candidates in development after focusing on rebuilding its pipeline this year. That proves that it hasn't shied away from making bold bets on external clinical assets despite the $8.4 billion acquisition of Synageva in 2015 that turned into a dud. For instance, the acquisition of Wilson Therapeutics in May this year added a phase 3 candidate for treating Wilson disease, which is characterized by copper accumulating in vital organs. And the September acquisition of Syntimmune added a promising early-stage drug candidate being developed as a potential treatment for rare autoimmune disorders.
Now what
The Syntimmune acquisition will take a huge bite out of GAAP earnings in 2018, essentially resulting in break-even net income. However, Alexion Pharmaceuticals expects adjusted earnings to settle around $7.53 per share for the full year. If Soliris can continue to shine, and new products gain marketing approval in 2019, then the business may be able to rediscover growth and deliver share-price gains to shareholders.
