Alexion Pharmaceuticals, Inc. (Nasdaq: ALXN) today announced financial results for the three and six months ended June 30, 2010.
“We look forward to the opportunity to serve more patients with PNH in the coming quarters, while progressing our aHUS and transplant programs to serve patients with other severe and ultra-rare disorders in the years ahead.”
Second Quarter 2010 Financial Results:
For the three months ended June 30, 2010, Alexion Pharmaceuticals, Inc. ("Alexion" or the "Company") reported total revenues of $125.8 million from net product sales of Soliris® (eculizumab), compared to $92.3 million in Q2 2009, reflecting ongoing steady additions of new patients in the U.S. and in European countries during the quarter.
Soliris is the only drug specifically indicated for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH), an ultra-rare, debilitating and life-threatening blood disorder. Soliris was approved by the U.S. Food and Drug Administration and the European Commission in 2007, and by Japan's Ministry of Health, Labour and Welfare (MHLW) in 2010.
Alexion's non-GAAP operating results are equal to its GAAP operating results less only share-based compensation and non-cash tax expense. Non-cash tax expense represents the reduction in cash taxes attributable to the utilization of U.S. net operating losses (NOL's). The following summary table is provided for investors' convenience.
Second Quarter 2010 Non-GAAP Financial Results:
The Company reported non-GAAP net income for Q2 2010 of $36.9 million, or $0.39 per share, an increase of 56 percent compared to $23.8 million, or $0.26 per share, in Q2 2009. Non-GAAP earnings per share in Q2 2009 included a non-cash charge of $3.4 million, or $0.04 per share, associated with the exchange of convertible notes during the quarter.
Alexion's non-GAAP operating expenses for Q2 2010 were $71.8 million, compared to $54.0 million for Q2 2009. Non-GAAP research and development (R&D) expenses for Q2 2010 were $21.7 million, compared to $16.5 million for Q2 2009. The increase in R&D expenses primarily reflected the Company's expanded clinical development programs. Non-GAAP selling, general and administrative (SG&A) expenses for Q2 2010 were $50.1 million, compared to $37.6 million for Q2 2009. The increase in SG&A expenses primarily reflected costs associated with the expansion of the Company's operations worldwide.
Second Quarter 2010 GAAP Financial Results:
The Company reported GAAP net income for Q2 2010 of $21.8 million, or $0.24 per share, an increase of 30 percent compared to $16.8 million, or $0.19 per share, in Q2 2009. GAAP earnings per share in Q2 2009 included a non-cash charge of $3.4 million, or $0.04 per share, associated with the exchange of convertible notes during the quarter.
Alexion's GAAP operating expenses for Q2 2010 were $79.8 million, compared to $61.0 million for Q2 2009. GAAP R&D expenses for Q2 2010 were $23.7 million, compared to $18.3 million for Q2 2009. GAAP SG&A expenses were $56.1 million for Q2 2010, compared to $42.7 million for Q2 2009.
As of June 30, 2010, the Company had $248.8 million in cash, cash equivalents and marketable securities, compared to $204.7 million at March 31, 2010.
"Our achievements in the second quarter, including landmark accomplishments in Japan and impressive progress in our lead pipeline programs, reflect clinical benefits provided by the innovative complement-blockade technology of Soliris, and the continued strengthening of our growing global operations," said Leonard Bell, M.D., Chief Executive Officer of Alexion. "We look forward to the opportunity to serve more patients with PNH in the coming quarters, while progressing our aHUS and transplant programs to serve patients with other severe and ultra-rare disorders in the years ahead."
Second Quarter 2010 Research and Development Progress:
During the second quarter, Alexion made continued progress on advancing the development of Soliris as a treatment for patients suffering from additional rare and severe complement-mediated disorders. There are currently 12 clinical trials of Soliris underway in eight diseases, and the Company is increasingly focused on its two lead areas of nephrology and transplant.
PNH: Approvals and Continuing Research
On June 2, 2010, the Company announced that the launch of Soliris as a treatment for patients with PNH in Japan will begin in the third quarter of 2010, approximately three months earlier than expected, as a result of rapid actions by the MHLW. The MHLW approved the new drug application for Soliris in April and listed Soliris for reimbursement through Japan's National Health Insurance system in June.
On June 14, 2010, Alexion reported that data were presented at the 15th Congress of the European Hematology Association held in Barcelona, Spain, evaluating the substantial disease burden of PNH in patients enrolled in the International PNH Registry and, separately, in a South Korean PNH patient registry.
Nephrology: Atypical Hemolytic Uremic Syndrome (aHUS)
In April 2010, Alexion announced completion of enrollment in its current clinical studies to investigate Soliris as a treatment for patients with aHUS. The 26-week trials include adult and adolescent patients in two cohorts: those who had been treated chronically with plasma therapy, and others who were resistant or intolerant to plasma therapy. Preliminary data from the trials are expected to be presented near the end of 2010. The Company expects to begin a trial in pediatric aHUS patients in the fall of 2010. Additional early clinical experience with Soliris as a treatment for patients with aHUS was recently presented at the Second International Conference on HUS-MPGN-PNH held in Innsbruck, Austria and summarized in an announcement by the Company on June 15, 2010.
Transplant: Acute Humoral Rejection (AHR)
Soliris 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, or AHR. The Company is supporting investigator-initiated studies in elevated-risk kidney transplantation in the U.S. and Australia and is planning a company-sponsored controlled clinical trial using Soliris to prevent AHR in patients undergoing kidney transplant. This study is expected to commence in multiple centers toward the end of the year. Positive interim data on 16 patients from an investigator-initiated trial at the Mayo Clinic was presented at the American Transplant Congress in May 2010.
Oncology Program: Trial Enrollment Completed
Enrollment is now completed in the Company's Phase I dose-escalation clinical study of samalizumab, its anti-CD200 antibody, in patients with treatment refractory chronic lymphocytic leukemia or multiple myeloma. The trial has enrolled approximately 25 patients.
2010 Financial Guidance:
The Company is reiterating its previously announced 2010 financial guidance, including the upward revisions in 2010 guidance for revenues and non-GAAP EPS, and the narrowing of 2010 guidance for non-GAAP operating expenses, which were announced on June 2, 2010.
In 2010, worldwide net product sales are expected to be within an upwardly revised range of $515 to $530 million, from the previous range of $505 to $520 million. Non-GAAP R&D expenses are anticipated to be in the range of $95 to $100 million and guidance for non-GAAP SG&A expenses have been narrowed from the previous range of $185 to $195 million to $190 to $195 million. As a result, 2010 guidance for non-GAAP operating expenses has been narrowed from the previous range of $280 to $295 million to $285 to $295 million. Cost of sales are anticipated to be in the range of 12 to 13 percent. The Company's share-based compensation expenses for the year are expected to be in a range of $32 to $34 million. The GAAP tax rate is expected to be in the range of 30 to 32 percent. The non-GAAP tax rate, which excludes non-cash tax expense, is expected to be in the range of 11 to 12 percent. Based on a forecast of 94 million fully diluted shares outstanding for 2010, Alexion is reiterating its non-GAAP earnings per share guidance in the upwardly revised range of $1.63 to $1.68, from the previous range of $1.60 to $1.65.
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