Analyst Conference Summary

Biotechnology

conference date: February 4, 2021 @ 5:00 AM Pacific Time
for quarter ending: De1ember 30, 2020 (fourth quarter 2020, Q4)

Forward-looking statements

Overview: Continued strong sales growth. Announced agreement to be acquired by AstraZeneca; transaction expected to close in Q3 2021.

Basic data (GAAP):

Revenue was $1.59 billion, flat sequentially from $1.59 billion and up 15% from $ billion in the year-earlier quarter.

Net income was $ million, down % sequentially from $578 million, and up % from $ million year-earlier.

EPS (diluted earnings per share) was $2.42, down 8% sequentially from $2.62 and up % from $ year-earlier.

Guidance:

Conference Highlights:

Ludwig N. Hantson, CEO, said: "" Hopes to have 10 indication launches by 2023.

In Q3 2020 received U.S. approval and positive CHMP opinion for Ultomiris 100 mg/mL higher concentration formulation in paroxysmal nocturnal hemoglobinuria (PNH) and aHUS. Established Ultomiris as new standard of care in PNH ahead of set goal, with more than 70% patient conversion from Soliris in 3 U.S., Germany and Japan.

Ultimiris Phase 3 GMG trial is nearing completion of enrollment.

Alexion is shifting Andexxa (acquired with Portola) to a multi-faceted hospital system approach.

Committed to a minimum of $500 to $550 million share repurchases in 2021. Then will increase to one-third of free cash flow from 2022 to 2023.

Ultmiris now has over 70% conversion in the U.S., which impacts Soliris sales. Continues to work to expand the label. Ultimiris has been priced lower than Soliris to encourage conversion.

Non-GAAP numbers: net income was $ million, up % sequentially from $727 million and up % from $ million year-earlier. Diluted EPS $2.96, down 8% sequentially from $3.24, and up % from $ year-earlier.

Cash and equivalents balance $ billion, up sequentially from $2.30 billion. Debt $2.45 billion. Cash from operations, $ billion. $ million was used to repurchase shares.

Ultomiris had an IND accepted for COVID-19 in April 2020. In PNH a Phase 3 study for children is underway. In aHUS a Phase 3 children's study is also underway, and the EU gave a positive opinion. The 100 mg/mL dose has a PDUFA date of October 11, 2020. Enrollment completed in the subcutaneous Phase 3 trial, with data expected in June 2020. In Amyotrophic Lateral Sclerosis (ALS)a Phase 3 study got underway in March 2020. Alexion plans to initiate a Phase 3 study of Ultomiris in CM-TMA in 2H 2020, pending regulatory feedback. In June 2020, Alexion announced that the Phase 3 study of weekly subcutaneous SC Ultomiris demonstrated PK-based non-inferiority versus intravenous Ultomiris. Pending collection of 12-month data, Alexion plans to file for approval in the U.S. and EU for the SC formulation and device combination in PNH and aHUS in the third quarter of 2021.

Alexion plans to initiate a Phase 2/3 study of Soliris in children and adolescents with NMOSD (Neuromyelitis Optica Spectrum Disorder) in the second half of 2020. A Phase 3 study of Soliris in children and adolescents with gMG (Generalized Myasthenia Gravis) is underway. Alexion plans to initiate a Phase 3 study of Soliris in GBS (Guillain-Barre syndrome) in Japan in 2021, pending regulatory feedback.

Alexion is collaborating with Caelum Biosciences to develop CAEL-101, targeting amyloid deposits in patients with light chain (AL) amyloidosis. A pivotal Phase 2/3 program is underway of CAEL-101 as an add-on to current standard-of-care therapy. Dosing is complete in the Phase 2 dose selection portion of the program; the Phase 3 portion of the program is planned to begin ?

ALXN1007 for inflammatory diseases continues a Phase 2 study for graft-versus-host disease involving the GI tract (GI-GVHD). It has orphan drug status.

ALXN1840 (formerly WTX101) for Wilson disease Phase 3 enrollment is complete. There are about 10,000 potential patients in both the U.S. and in Europe.

See also Alexion pipeline.

GAAP cost of sales was $ million. R&D expense was $ million. SG&A expense was $ million. Acquisition related costs $ million. Amortization of purchased intangibles $ million. Restructuring $ million. Change in fair value of contingent consideration $ million. Acquisition related expense $ million. Gain on asset sale $ million. Total operating expenses were $ million, leaving operating income of $ million. Interest and other expense net was $ million. Income tax $ million.

Q&A summary:

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