Morningstar | Alexion Reports Solid 3Q and Raises Guidance; Shares Undervalued With Maintained $172 FVE
In its third quarter, narrow-moat Alexion Pharmaceuticals saw strong volume growth of 26% for its drug portfolio of Soliris, Strensiq, and Kanuma, resulting in over $1 billion in revenue, up 20% from last year. Management raised full-year guidance for revenue and adjusted earnings per share by 1% and 6.4%, respectively. After adjusting for updated guidance and the recently announced acquisition of Syntimmune, we do not expect a material change to our fair value estimate of $172 per share.Alexion continues to focus on building out its pipeline, following the May acquisition of Wilson Therapeutics with the $400 million acquisition of Syntimmune, announced in September. This adds SYNT001, an early-stage antibody candidate for rare immunoglobulin-G-mediated diseases, to Alexion's portfolio. Further, Alexion announced a collaboration with Dicerna and its proprietary RNAi platform for complement-mediated diseases. Â While these developments will weigh on the company's bottom line this year, we believe Alexion's pipeline is strengthening and strategically well positioned for future cash flow generation. In the near term, we expect the recent launch of Soliris for the treatment of generalized myasthenia gravis and the expected launch of next-generation drug ALXN1210 in 2019 to drive strong growth for Alexion.
Alexion Pharmaceuticals is a biopharmaceutical company serving patients and families affected by rare diseases through the discovery, development and commercialization of therapies. The company has developed and commercialized two complement inhibitors to treat patients with paroxysmal nocturnal hemoglobinuria and atypical hemolytic uremic syndrome, as well as the complement inhibitor to treat anti-acetylcholine receptor antibody-positive generalized myasthenia gravis and neuromyelitis optica spectrum disorder in patients who are anti-aquaporin-4 antibody positive. In addition, the company has two enzyme replacement therapies for metabolic disorders, hypophosphatasia and lysosomal acid lipase deficiency.
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