Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) today announced financial results for the three and six months ended June 30, 2011. Alexion Pharmaceuticals, Inc. ("Alexion" or, the "Company") reported net product sales of Soliris® (eculizumab) of $185.7 million in Q2, reflecting steady addition of new patients, compared to $125.8 million for the same period in 2010.
Soliris, approved in the US (2007), European Union (2007), Japan (2010) and in other territories, is the only drug specifically indicated for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH), an ultra-rare, debilitating and life-threatening blood disease.
Alexion's non-GAAP operating results are equal to GAAP operating results less the impact of share-based compensation, taxes that are not payable in cash (non-cash taxes), amortization of acquired intangible assets, and costs associated with acquisitions. A reconciliation of GAAP and non-GAAP results is summarized below:
The Company effected a 2-for-1 stock split in the form of a 100 percent stock dividend on May 20, 2011. All share and per-share amounts in this press release have been adjusted to reflect this split.
Second Quarter Non-GAAP Financial Results:
The Company reported non-GAAP net income of $56.8 million, or $0.29 per share, for the second quarter of 2011, compared to non-GAAP net income of $36.9 million, or $0.20 per share, in the second quarter of 2010.
Alexion's non-GAAP operating expenses for Q2 2011 were $102.6 million, compared to $71.8 million for Q2 2010. Non-GAAP research and development (R&D) expenses for Q2 2011 were $33.4 million, compared to $21.7 million for Q2 2010. The increase in R&D expenses primarily reflected the expansion of the Company's clinical trial programs, including costs associated with product supply and services for the STEC-HUS trial initiated in the quarter. Non-GAAP selling, general and administrative (SG&A) expenses for Q2 2011 were $69.2 million, compared to $50.1 million for Q2 2010. The increase in non-GAAP SG&A expenses primarily reflected costs associated with the expansion of the Company's commercial operations related to new geographies and with the preparation for potential launch of Soliris in aHUS.
Second Quarter GAAP Financial Results:
Alexion reported GAAP net income of $34.7 million, or $0.18 per share, compared to Q2 2010 GAAP net income of $21.8 million, or $0.12 per share.
On a GAAP basis, operating expenses for Q2 2011 were $114.9 million, compared to $79.8 million for Q2 2010. GAAP R&D expenses for Q2 2011 were $35.6 million, compared to $23.7 million for Q2 2010. GAAP SG&A expenses were $78.2 million for Q2 2011, compared to $56.1 million for Q2 2010.
As of June 30, 2011, the Company had $368.0 million in cash, cash equivalents and marketable securities, compared to $348.8 million at the end of Q1 2011. During Q2, the Company repaid $60 million of short-term debt that was incurred related to the two acquisitions which closed during Q1 2011.
"In the second quarter, we continued to serve a growing number of new patients with PNH in our core territories of the US, Western Europe and Japan," said Leonard Bell, M.D., Chief Executive Officer of Alexion. "During Q2, we also focused on responding to the urgent public health crisis related to the STEC-HUS outbreak in Germany. Towards the end of this year, we expect to complete the aHUS regulatory process in the US and are likewise focused on further accelerating the development of our pipeline portfolio, which now comprises the widest group of compounds and ultra-rare disorders in our history."
Research and Development Programs:
aHUS Regulatory Submissions
In April, the Company announced that it had submitted marketing applications to the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA) for Soliris as a treatment for patients with atypical Hemolytic Uremic Syndrome (aHUS). During Q2, the FDA granted Priority Review status for the application in the US. If approval is granted, the Company anticipates a US launch for eculizumab in aHUS in the fourth quarter of 2011.
Transplant: Acute Humoral Kidney Rejection (AHR)
Eculizumab is being investigated as a treatment for patients undergoing kidney transplant who are at elevated risk of antibody mediated rejection, also known as acute humoral rejection (AHR). The FDA and EMA have approved clinical protocols for a global, company-sponsored controlled clinical trial evaluating eculizumab to prevent AHR in patients undergoing kidney transplant. The Company is preparing to initiate a living-donor study in the fall of 2011 and a deceased-donor study near year-end.
Following authorization by the Paul-Ehrlich-Institut (PEI), Germany's healthcare regulatory body for biologics, and an access program for patients initiated in May, Alexion initiated an open-label clinical trial to investigate eculizumab as a treatment for patients with Shiga-toxin producing E. coli hemolytic uremic syndrome (STEC-HUS) in Germany.
2011 Financial Guidance:
Alexion's 2011 revenue guidance has been revised upward, from the previously announced range of $720 to $740 million, now to the higher range of $745 to $755 million. The upward revision in revenue guidance takes into account continued global growth of Soliris for PNH, and the potential for the launch of Soliris for aHUS in the US in Q4, which could occur if a positive decision on the Company's application is received from the FDA. Guidance for non-GAAP EPS has been revised upward from the previous range of $1.05 to $1.12 (adjusted for the 2-for-1 stock split effected in May 2011) now to the higher range of $1.10 to $1.15, based on a forecast of approximately 194 million diluted shares outstanding for the year.
On a non-GAAP basis, guidance for 2011 R&D expenses has been increased from the previous range of $128 to $138 million to the higher range of $138 to $143 million. Guidance for 2011 non-GAAP SG&A expenses has been narrowed within the previous range, to $275 to $280 million. Guidance for share-based compensation expense for the year has been increased from the previous range of approximately $39 to $41 million to the higher range of approximately $42 to $44 million. Cost of sales has been reiterated at approximately 13 percent of sales. Guidance for 2011 GAAP tax rate has been reiterated in the range of 30 to 32 percent; the non-GAAP effective tax rate, reported on a cash tax liability basis, has been reiterated in the range of 10 to 12 percent.
Alexion Pharmaceuticals, Inc.