Alexion second quarter net product sales increase to $274.7 million

Alexion Pharmaceuticals, Inc.Jul 25 2012

Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) (Alexion or the Company) today announced financial results for the three and six months ended June 30, 2012. Alexion reported net product sales of Soliris^® (eculizumab) of $274.7 million in the second quarter of 2012, compared to $185.7 million for the same period in 2011.    

Revenue performance for the quarter reflected steady additions of new patients with paroxysmal nocturnal hemoglobinuria (PNH) commencing Soliris therapy in Alexion's core territories of the US, Western Europe and Japan, as well as in new countries. Revenues were further augmented by an increasing number of new patients with atypical hemolytic uremic syndrome (aHUS) commencing Soliris treatment, as well as by $3.3 million from shipments of Soliris that occurred in 2011.

Soliris is approved for patients with PNH in the US (2007), European Union (2007), Japan (2010) and other territories as the first and only treatment indicated for this ultra-rare, debilitating and life-threatening blood disease. Soliris is also approved as the first and only treatment for patients with aHUS, an ultra-rare, life-threatening, genetic disease, in the US (September 2011) and in the European Union (November 2011).

Alexion's non-GAAP operating results are equal to GAAP operating results adjusted for the impact of share-based compensation, costs associated with acquisitions, taxes that are not payable in cash (non-cash taxes) attributable to the utilization of US net operating losses, and taxes related to acquisition structuring. The following summary table is provided for investors' convenience:

Second Quarter 2012 Non-GAAP Financial Results:

The Company reported non-GAAP net income of $94.1 million, or $0.47 per share, in the second quarter of 2012, compared to non-GAAP net income of $56.8 million, or $0.29 per share, in the second quarter of 2011.

Alexion's non-GAAP operating expenses for Q2 2012 were $142.2 million, compared to $102.6 million for Q2 2011. Non-GAAP research and development (R&D) expenses for Q2 2012 were $56.3 million, compared to $33.4 million for Q2 2011. Non-GAAP selling, general and administrative (SG&A) expenses for Q2 2012 were $85.9 million, compared to $69.2 million for Q2 2011.

Second Quarter 2012 GAAP Financial Results:

Alexion reported GAAP net income of $36.3 million, or $0.18 per share, in the second quarter of 2012, compared to GAAP net income of $34.7 million, or $0.18 per share, in the second quarter of 2011. Q2 2012 GAAP net income included $21.8 million of tax expense related to the structuring of the Enobia acquisition.

On a GAAP basis, operating expenses for Q2 2012 were $159.4 million, compared to $114.9 million for Q2 2011. GAAP R&D expenses for Q2 2012 were $59.6 million, compared to $35.6 million for Q2 2011. GAAP SG&A expenses were $94.9 million for Q2 2012, compared to $78.2 million for Q2 2011.

Balance Sheet:

As of June 30, 2012, the Company had $806 million in cash and cash equivalents, compared to $359 million at March 31, 2012. The Company raised net proceeds of $462 million from the sale of 5,000,000 shares, announced on May 23, 2012, in connection with its inclusion in the S&P 500 Index. The Company also reduced total debt from $355 million at March 31, 2012 to $228 million at June 30, 2012.

"In the second quarter, we continued to provide Soliris to a substantial number of new patients with PNH, both in our core territories and in new countries, while also serving an increasing number of new patients with aHUS," said Leonard Bell, M.D., Chief Executive Officer of Alexion. "We also advanced our eight lead development programs which include five highly innovative biologics. In the second half of 2012, the global Alexion team will drive forward to serve more patients with PNH and aHUS around the world, and to bring life-transforming innovation to patients with additional severe and life-threatening ultra-rare disorders."

Research and Development Programs:

Alexion currently has lead development programs underway with five highly innovative therapeutics, including eculizumab (Soliris), which are being investigated across eight severe and ultra-rare disorders beyond PNH and aHUS.

Ultra-Rare Disease Programs With Eculizumab

• Nephrology: STEC-HUS and Acute Humoral Kidney Rejection (AHR): The European Commission has granted orphan designation for eculizumab as a treatment for patients with STEC-HUS, a severe, ultra-rare, and life-threatening inflammatory disorder. Separately, enrollment continues in a Company-sponsored, multi-national, living-donor kidney transplant trial in patients at elevated risk of acute humoral rejection, also known as antibody mediated rejection, and the Company has initiated a deceased-donor kidney transplant study with enrollment expected to begin later this year.
• Neurology: NMO and MG: Data from the investigator-initiated Phase 2 clinical trial of eculizumab in severe and refractory neuromyelitis optica (NMO) are expected to be presented at a scientific meeting in the second half of 2012. Alexion is also currently working with investigators to design the next clinical trial to evaluate eculizumab as a treatment for patients with severe and refractory myasthenia gravis (MG).

Ultra-Rare Disease Programs With Highly Innovative Therapeutic Candidates Beyond Eculizumab

• Asfotase Alfa: During Q2, Alexion initiated its planned natural history study in infants with hypophosphatasia (HPP), an ultra-rare, inherited, and life-threatening metabolic disease.
• cPMP Replacement Therapy: The Company is conducting pre-IND toxicology studies with its cPMP replacement therapy for the treatment of patients with the severe, ultra-rare, and genetic, fatal metabolic disorder Molybdenum Cofactor Deficiency Type A.
• ALXN1102 (previously TT30): Enrollment continues in a Phase I study to characterize the mechanism of action and develop initial safety data for ALXN1102, a novel complement inhibitor.
• ALXN1007: Enrollment continues in a Phase I study of ALXN1007, a novel anti-inflammatory antibody, to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamics of this compound in healthy volunteers.

2012 Financial Guidance:

Alexion today announced that it is raising its 2012 revenue guidance from the previous range of $1.065 to $1.085 billion now to the higher range of $1.110 to $1.125 billion. The upward revision reflects continued global growth of Soliris in PNH and growth from the ongoing launch of Soliris in aHUS. 2012 guidance for non-GAAP SG&A is being increased from the previous range of $345 to $355 million, now to $360 to $370 million, reflecting continued investment in the growth of the Company's global operations. Non-GAAP R&D guidance remains unchanged. Guidance for 2012 non-GAAP earnings per share is being raised, from the previous range of $1.65 to $1.75 per share, now to the higher range of $1.78 to $1.88 per share for the year. Shares outstanding are expected to be approximately 203 million in the third quarter and approximately 204 million in the fourth quarter. All other items of the 2012 financial guidance provided in the Company's press release of April 24, 2012 are being reiterated at this time.