Biotech earnings seasons will get into full swing this week, with several top names such as Gilead, Celgene, Biogen, and others set to report. With all of these giants in the industry reporting almost simultaneously, it's almost easy to forget that Alexion Pharmaceuticals (NASDAQ:ALXN), a leading orphan-drug maker, will also report on Thursday, April 24, before the bell. While perhaps not the biggest name of the bunch reporting this week, Alexion is still a key name to watch during earnings season because it has forged a leading position among orphan drugmakers. As a result, its earnings could be quite telling for how other specialist biotechs may fare this quarter. So let's take a closer look at the key issues heading into Alexion's earnings release.

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Earnings estimates have steadily risen through the quarter
At this point, I think an earnings beat by Alexion is going to be tough to achieve, because analysts have markedly raised their estimates throughout the quarter. Specifically, consensus had first-quarter earnings coming in at $0.87 per share two months ago, but the latest figures have risen by 44% to $1.26 per share. This significant upward revision is due primarily to an agreement reached with the French government over reimbursement for Alexion's flagship blood disorder drug, Soliris. What's important to understand is that several European countries were questioning the drug's average treatment price of $440,000 per patient. Now that France has apparently agreed that the drug's price is indeed reasonable, analysts expect other EU countries to follow suit.

After this news, Alexion subsequently raised its annual guidance as well, upping 2014 sales forecasts to a range of $2.15 billion to $2.17 billion, from a range of $2 billion to 2.02 billion. If this forecast holds true, we are looking at year-over-year revenue growth of around 30%.

Keep an eye out for guidance on expenses
Growing revenues are generally what makes headlines, but expenses are equally important to a company's overall health. As a company still in the early phase of its life cycle, Alexion is using a fair amount of cash to support its active clinical program that includes studies to expand Soliris' label and developing other therapies for ultra-rare diseases. So it's not surprising that Alexion's operating expenses have been climbing year over year by double digits.

Going into the year, Alexion was projecting a 12% increase in operating expenses in 2014 compared with 2013, mostly stemming from the cost of commercializing Soliris. So, I will be keen to see if this number stays the same or deviates from the company's original guidance.

What to do with this cash?
Alexion has been slowly building a nice chunk of change in the bank, reporting about $1.5 billion in cash and cash equivalents at the end of 2013. With first-quarter revenue expected to come in around $560 million, Alexion should thus be closing in on the $2 billion mark later this year. The company could choose to either return this cash to shareholders via a dividend or go on the hunt to for more deals like its $125 million licensing agreement with Moderna Therapeutics.

And as we've seen with the recent merger between Questcor Pharmaceuticals and Mallinckrodt, orphan-drug makers are a hot-ticket item, and companies are even willing to ignore potentially serious problems to acquire them. Indeed, I don't recall a single person saying that Questcor would be taken out in light of its ongoing regulatory issues with Acthar Gel. Regardless, this example shows that cash-rich companies like Alexion could be willing to make a deal to expand their commercial pipeline. So, Alexion's mounting cash position is a key issue to be on the lookout for in the upcoming earnings release, as it could lead to more licensing deals or an acquisition down the road. 

Foolish wrap-up
Although I am expecting a number of earnings beats this week among biotechs, Alexion Pharmaceuticals probably won't be in that group, because the company and analysts recently revised guidance upward in a significant manner. That said, you should keep a close watch on Alexion's first-quarter earnings, because that could affect how the industry performs, at least in the short term. My belief stems from the fact that Alexion has trounced most biotechs this year, heading higher by 12.7%. So, if it fails to meet consensus or lowers 2014 guidance for unforeseen reasons, this event could have a ripple effect on biotechs in general. You should definitely tune in to this specialty biopharma's earnings report Thursday.