Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) today announced financial results for the quarter and year ended December 31, 2013. For the three months ended December 31, 2013, Alexion Pharmaceuticals, Inc. ("Alexion" or the "Company") reported net product sales of Soliris® (eculizumab) of $441.9 million, compared to $320.5 million for the same period in 2012. The year-on-year increase in Q4 net product sales of 38 percent reflected steady additions of new patients with paroxysmal nocturnal hemoglobinuria (PNH) and atypical hemolytic uremic syndrome (aHUS) commencing Soliris treatment.
Soliris is approved in nearly 50 countries for the treatment of patients with PNH, including the United States, European Union and Japan. Soliris is also approved in the United States, European Union, Japan and other countries as the first and only treatment for pediatric and adult patients with aHUS, a genetic, chronic, ultra-rare disease associated with vital organ failure and premature death.
Alexion's non-GAAP operating results are GAAP operating results adjusted for the impact of certain items described below. A full reconciliation of GAAP to non-GAAP financial results is included later in this press release.
Full Year 2013 Non-GAAP Financial Results
The Company reported non-GAAP net income of $624.2 million in 2013, or $3.08 per share, compared to non-GAAP net income of $425.2 million, or $2.13 per share, in 2012.
Alexion's non-GAAP operating expenses for the full year 2013 were $719.3 million, compared to $556.2 million for 2012. Non-GAAP research and development (R&D) expenses for 2013 were $278.7 million, compared to $208.9 million for the prior year. Non-GAAP selling, general and administrative (SG&A) expenses for 2013 were $440.6 million, compared to $347.3 million in 2012.
Full Year 2013 GAAP Financial Results
Alexion reported GAAP net income of $252.9 million, or $1.27 per share, in 2013 compared to 2012 GAAP net income of $254.8 million, or $1.28 per share. Full year 2013 GAAP results were impacted by $153.0 million, or $0.77 per share, related to non-cash tax expense associated with centralizing certain business operations, impairment of intangible assets, expenses from license agreements, and an intellectual property settlement. Full year 2012 GAAP results included an increase of $27.1 million, or $0.13 per share, related to the net effect of an intellectual property settlement and an impairment of an intangible asset.
Alexion's GAAP operating expenses for the full year 2013 were $845.8 million, compared to $656.9 million for the prior year. GAAP R&D expenses for 2013 were $317.1 million, compared to $222.7 million in 2012. GAAP SG&A expenses for 2013 were $489.7 million, compared to $384.7 million for the prior year.
Fourth Quarter Non-GAAP Financial Results
The Company reported non-GAAP net income of $177.7 million, or $0.87 per share in Q4 2013, compared to non-GAAP net income of $122.3 million, or $0.60 per share, in Q4 2012.
Alexion's non-GAAP operating expenses for Q4 2013 were $201.7 million, compared to $163.2 million for Q4 2012. Non-GAAP R&D expenses for Q4 2013 were $79.8 million, compared to $59.9 million for Q4 2012. Non-GAAP SG&A expenses for Q4 2013 were $121.8 million, compared to $103.3 million for Q4 2012.
Fourth Quarter GAAP Financial Results
Alexion reported a GAAP net loss of $19.0 million, or $0.10 per share in Q4 2013, compared to Q4 2012 GAAP net income of $81.0 million, or $0.40 per share. Q4 2013 GAAP results were impacted by $95.8 million, or $0.48 per share, related to a non-cash tax expense associated with centralizing certain business operations, and $33.5 million, or $0.17 per share, related to impairment of intangible assets.
On a GAAP basis, operating expenses for Q4 2013 were $252.3 million, compared to $179.5 million for Q4 2012. GAAP R&D expenses for Q4 2013 were $85.8 million, compared to $63.4 million for Q4 2012. GAAP SG&A expenses for Q4 2013 were $134.8 million, compared to $112.6 million for Q4 2012.
As of December 31, 2013, the Company had $1.515 billion in cash, cash equivalents and marketable securities compared to $989.5 million at December 31, 2012.
"In 2013, we provided Soliris to an increasing number of patients with PNH and aHUS worldwide. We demonstrated steady growth in PNH, grew steadily the number of new patients with aHUS receiving Soliris in the U.S. and the first countries of Western Europe, and began serving initial patients with aHUS in Japan," said Leonard Bell, M.D., Chief Executive Officer of Alexion. "Throughout 2014, we will focus on serving more patients with PNH and aHUS globally. At the same time, we will advance our lead pipeline initiatives toward achieving ten or more development milestones as we drive toward our anticipated series of as many as seven potential product approvals between 2014 and 2018."
Research and Development Progress
Alexion currently has development programs underway with eculizumab (Soliris) and additional highly innovative therapeutic candidates that have the potential to become first-in-class therapies for patients with severe and ultra-rare disorders.
Ultra-Rare Disease Programs With Eculizumab
Transplant: Antibody-Mediated Rejection (AMR) - Enrollment is ongoing in the Company-sponsored, multinational living-donor kidney transplant trial in patients at elevated risk of AMR and in the expanded Company-sponsored, multinational deceased-donor kidney transplant trial in patients at elevated risk of AMR.
Transplant: Delayed Graft Function (DGF) - Alexion is planning to commence a single, multinational registration trial for the prevention of delayed graft function (DGF) in renal transplant patients. Earlier this month, eculizumab received an orphan drug designation from the U.S. Food and Drug Administration (FDA) for the prevention of delayed graft function (DGF) in renal transplant patients.
Neurology: Neuromyelitis Optica (NMO) - Alexion is planning to commence a single, multinational, placebo-controlled, registration trial in relapsing NMO.
Neurology: Myasthenia Gravis (MG) - Alexion is planning to commence a single, multinational, placebo-controlled, registration trial in severe, refractory MG.
Ultra-Rare Disease Programs with Additional Highly Innovative Therapeutics
Asfotase Alfa: Alexion is developing asfotase alfa as a treatment for patients with pediatric-onset hypophosphatasia (HPP), an ultra-rare, inherited and life-threatening metabolic disease. The Company received Breakthrough Therapy designation for asfotase alfa in pediatric-onset HPP in Q2 2013. Alexion completed the initial analysis of its natural history study in infants with HPP and has now initiated a natural history study in juveniles with HPP.
cPMP Replacement Therapy (ALXN 1101): Alexion is developing cPMP as a treatment for patients with Molybdenum Cofactor Deficiency (MoCD) Type A, a severe, ultra-rare and genetic metabolic disorder that causes catastrophic and irreversible neurologic damage within the first few weeks of life. The Company received Breakthrough Therapy designation for cPMP replacement therapy for patients with MoCD Type A in Q3 2013. A natural history study in MoCD patients is ongoing and Alexion plans to initiate a synthetic cPMP bridging study.
ALXN1007: Alexion is preparing to commence two Phase 2 proof-of-concept studies of ALXN1007, a novel anti-inflammatory antibody, in severe and life-threatening ultra-rare disorders.
Establishment of mRNA Research Capabilities
Beyond its current development programs, the Company announced on January 13, 2014 that it is establishing messenger RNA research capabilities through an exclusive strategic agreement with Moderna Therapeutics. Products based on messenger RNA are expected to have significant potential for Alexion, as they are well-suited to address the large number of severe and rare disorders caused by protein deficiencies. Under the agreement, Alexion will purchase 10 product options to develop and commercialize treatments for rare diseases with Moderna. Alexion will lead the discovery, development and commercialization of the treatments produced through this broad, long-term strategic agreement, while Moderna will retain responsibility for the design and manufacture of the messenger RNA product candidates.
2014 Financial Guidance
In 2014, worldwide net product sales are expected to be within a range of $2.00 to $2.02 billion. On a non-GAAP basis, R&D expenses are expected to be in the range of $360 to $380 million, and SG&A expenses in the range of $560 to $580 million. Cost of goods sold is expected to be approximately 9 percent of net product sales. Non-GAAP earnings per share for the year are expected to be $3.70 to $3.80, based on a forecast of approximately 205 million diluted shares outstanding. The non-GAAP tax rate, reported on a cash tax liability basis, is expected to be approximately 10 to 11 percent; the GAAP tax rate is expected to be approximately 20 to 22 percent.
Conference Call/Web Cast Information
Alexion will host a conference call/webcast to discuss matters mentioned in this release. The call is scheduled for today, January 30 at 10:00 a.m., ET. To participate in this conference call, dial 888-487-0361 (USA) or 719-325-2249 (International), passcode 9926357 shortly before 10:00 a.m. ET. A replay of the call will be available from 1:00 p.m. ET through a limited time thereafter. The replay number is 888-203-1112 (USA) or 719-457-0820 (International), passcode 9926357. The audio webcast can be accessed on the Investor page at www.alexionpharma.com.
Source: Alexion Pharmaceuticals, Inc.