Last week saw earnings season start in earnest in the health care sector. So, with several other health care companies expected to report soon, I think it's a good idea to look at what's transpired so far and see if any trends are forming.

To do so, I'll first take a brief look at how AbbVie, (ABBV 0.89%), Alexion Pharmaceuticals (ALXN), and Celgene Corporation (CELG) fared last quarter. In a follow-up article, I'll recap the earnings highlights of three other biotechs that hit the tape last week and give my take on how earnings are shaping up across the sector.

AbbVie's earnings hit the mark
AbbVie's earnings fell in-line with estimates of $0.82 per share on an adjusted basis. However, revenues year over year did beat estimates by $10 million, although this is still a 1.8% decline compared to a year ago. Management attributed this decline to a loss of patent exclusivity for products within their lipid franchise, namely Niaspan and Tricor. Even so, revenues lost from these former top-sellers were offset, at least partially, by strong sales of the company's autoimmune disease drug Humira. Specifically, Humira sales increased 13.4% year over year, bringing in over $3 billion in revenues last quarter.

Looking ahead, AbbVie is projecting 2014 revenues of around $19 billion or around $3.10 per share on an adjusted basis. The good news is that this estimate does not include any potential revenues from the company's experimental hepatitis C drug, ABT-450, which will be up for FDA approval later this year. So, there is a good chance AbbVie will increase guidance if the drug is approved.

That said, I think there is a better than average chance ABT-450 will get approved this year after showing functional cure rates of 96% in late-stage clinical trials. In fact, ABT-450 could become a serious rival to Gilead's Sovaldi in the hepatitis C space. That's certainly welcome news for AbbVie investors, because Humira will start to come off of patent protection as early as 2016. In short, the company needs a megablockbuster to replace all the revenues that will eventually fall victim to the patent cliff.

Alexion's earnings increased by leaps and bounds -- sort of
Perhaps one of the biggest stories on the health care earnings front is the orphan drug maker Alexion Pharmaceuticals, which beat adjusted net income estimates by almost 5%. Specifically, Wall Street was expecting $0.83 a share, whereas Alexion reported $0.87 for the quarter.

But what got the shares moving last week was Alexion's strong outlook for 2014. In particular, Alexion stated that earnings should increase by a handsome 9.5% over Wall Street's estimates. Breaking this down further, however, it turns out this dramatic upshot in projected earnings is the result of a lower than expected tax rate in 2014, not surprisingly strong revenues. So, while Alexion's only approved drug Soliris is indeed selling nicely since its launch, this upside surprise is mostly about retained earnings via tax breaks.

Celgene underwhelms investors, but maybe that's the plan?
Celgene one was one of the few losers on the earnings front last week, with earnings dropping by 18% compared to a year ago. Most of this weakness can be traced to Celgene's blood cancer drug Vidaza, which saw sales drop by 22% in the quarter.

Despite Vidaza's poor sales, there were some bright spots. Sales of the company's new cancer drug Abraxane, for example, increased 90% in the quarter, raking in over $200 million in revenues. Even so, Celgene's pricing of Abraxane for pancreatic cancer patients came under fire last week in a letter from oncologist Dr. Leonard Saltz, that was published in the New England Journal of Medicine, or NEJM. Put simply, Dr. Saltz criticized the drug's high price given its modest benefits in patients with late-stage pancreatic cancer. 

What appears to have spooked investors is that Celgene's 2014 guidance didn't exactly set the world on fire, basically falling in-line with estimates. Investors are thus concerned that a price cut to Abraxane would cut deeper into Celgene's annual revenues, forcing the company to lower guidance even further. 

What's key to understand is that Celgene did rebut the criticisms in its own letter to the NEJM, suggesting that the pricing issues don't account for the complex care needed by patients with advanced pancreatic cancer. As such, I don't expect Celgene to cut Abraxane's cost anytime soon; so the 5% drop in share price in response to Dr. Saltz's letter appears to be overdone.

More globally, Celgene is known for giving conservative yearly guidance, and subsequently beating its own estimates over the course of the year. So, you shouldn't be surprised if this recent pullback in Celgene's share price turns out to be a bargain later down the road.  

And remember, stay tuned for the second article in this series!