Why Is Alexion (ALXN) Down 3.5% Since Last Earnings Report?

It has been about a month since the last earnings report for Alexion Pharmaceuticals (ALXN). Shares have lost about 3.5% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Alexion due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Alexion Beats on Q4 Earnings Estimates

Alexion’s fourth-quarter adjusted earnings of $2.96 per share comfortably beat the Zacks Consensus Estimate of $2.50 and grew from $2.71 in the year-ago period.

Moreover, revenues rose 15% year over year to $1.59 billion for the reported quarter and surpassed the Zacks Consensus Estimate of $1.51 billion. The positive impact of foreign currency on total revenues was less than 1%, inclusive of hedging activities. Revenues were driven by higher sales of Soliris, Ultomiris and Strensiq.

Revenues in Detail

Soliris (approved for the treatment of paroxysmal nocturnal hemoglobinuria [PNH], atypical hemolytic uremic syndrome [aHUS] and generalized myasthenia gravis) sales were up 1% year over year to $1023.5 million for the reported quarter.

Long-acting C5 complement inhibitor, Ultomiris — approved for the treatment of adult patients with PNH and aHUS — generated sales of $313.5 million compared with $170.2 million in the year-ago quarter, representing an 84% increase.

Strensiq revenues were $185.9 million (up 11% year over year). Kanuma contributed $29.2 million (down 14% year over year) to quarterly revenues.

Cost Summary

Adjusted research and development expenses increased to $269.8 million from $226.7 million in the year-ago quarter.

Adjusted selling, general and administrative expenses were $384.6 million, up from $340 million in the year-ago quarter.

Full-Year Results

The company reported full-year 2020 adjusted earnings of $12.51 per share, up from $10.53 in 2019. The reported figure also surpassed the Zacks Consensus Estimate of $12.06 per share.

Revenues were $6.07 billion for 2020 compared with $4.99 billion in 2019. Revenues also outpaced the Zacks Consensus Estimate of $5.96 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

Currently, Alexion has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Alexion has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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