Alexion 2010 third quarter revenue increases from $102.6 to $141.6 million

Oct 21 2010

Alexion Pharmaceuticals, Inc. (Nasdaq: ALXN) today announced financial results for the three and nine months ended September 30, 2010.

“We are pleased with the continued growing strength of our global operations in the third quarter, highlighted by the success of the initial launch of Soliris for patients with PNH in Japan”

Third Quarter 2010 Financial Results:

For the three months ended September 30, 2010, Alexion Pharmaceuticals, Inc. ("Alexion" or the "Company") reported total revenues of $141.6 million from net product sales of Soliris^® (eculizumab), compared to $102.6 million in Q3 2009, reflecting the strong addition of new patients in the U.S. and in European countries, and the initial launch of Soliris in Japan, during the quarter.

Soliris is the only treatment 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 in 2010.

Alexion's non-GAAP operating results are equal to its GAAP operating results adjusted for 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. The following summary table is provided for investors' convenience.

Third Quarter 2010 Non-GAAP Financial Results:

The Company reported non-GAAP net income for Q3 2010 of $47.2 million, or $0.50 per share, an increase of 40 percent compared to $33.7 million, or $0.37 per share, in Q3 2009.

Alexion's non-GAAP operating expenses for Q3 2010 were $74.3 million, compared to $55.9 million for Q3 2009. Non-GAAP research and development (R&D) expenses for Q3 2010 were $23.1 million, compared to $19.2 million for Q3 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 Q3 2010 were $51.1 million, compared to $36.7 million for Q3 2009. The increase in SG&A expenses primarily reflected costs associated with the expansion of the Company's worldwide operations.

Third Quarter 2010 GAAP Financial Results:

The Company reported GAAP net income for Q3 2010 of $27.9 million, or $0.30 per share, compared to $26.7 million, or $0.29 per share, in Q3 2009. Q3 2009 GAAP net income benefited from a tax rate of 3.4 percent, since it was prior to the reversal of the valuation allowance on U.S. deferred tax assets. Alexion's GAAP operating expenses for Q3 2010 were $82.4 million, compared to $62.8 million for Q3 2009. GAAP R&D expenses for Q3 2010 were $25.2 million, compared to $21.3 million for Q3 2009. GAAP SG&A expenses were $57.2 million for Q3 2010, compared to $41.5 million for Q3 2009.

As of September 30, 2010, the Company had $298.6 million in cash, cash equivalents and marketable securities, compared to $248.8 million at June 30, 2010.

"We are pleased with the continued growing strength of our global operations in the third quarter, highlighted by the success of the initial launch of Soliris for patients with PNH in Japan," said Leonard Bell, M.D., Chief Executive Officer. "Further, we are encouraged by the positive interim data from our two studies of eculizumab in patients with aHUS and look forward to advancing this important program."

2010 Financial Guidance:

The Company is raising its 2010 financial guidance for revenues and non-GAAP earnings per share (EPS). Guidance for 2010 worldwide net product sales has been raised from the previously provided range of $515 to $530 million to the higher range of $536 to $538 million. Guidance for 2010 non-GAAP EPS has been raised from the previous range of $1.63 to $1.68 to the higher range of $1.73 to $1.75, based on a forecast of approximately 94 million fully diluted shares outstanding for 2010.

Guidance for 2010 non-GAAP operating expenses is being narrowed within the upper end of the previously provided guidance range, now to $290 to $295 million. Within this 2010 non-GAAP operating expense guidance, R&D expense guidance has been lowered from the previous range of $95 to $100 million to the lower range of $92 to $94 million, while 2010 guidance for non-GAAP SG&A expenses has been raised from the previous range of $190 to $195 million to the higher range of $198 to $201 million. The increase in non-GAAP SG&A expense guidance relates primarily to accelerated investment in the Company's nephrology therapeutic area and the earlier than expected launch of Soliris in Japan. The Company is raising its guidance for its 2010 GAAP tax rate from a previous range of 30 to 32 percent to the higher range of 32 to 33 percent. The Company is lowering its guidance for its 2010 non-GAAP tax rate, which excludes non-cash tax expense, from a previous range of 11 to 12 percent to the lower range of 9 to 11 percent.

The Company is reiterating other elements of its 2010 fiscal year guidance. Cost of sales is anticipated to be in the range of 12 to 13 percent, and share-based compensation expense for the year is expected to be in a range of $32 to $34 million.