Alexion forecasts Soliris growth for 2017 in wake of probe into sales practices

Alexion Pharmaceuticals on Thursday said that it anticipates Soliris sales in 2017 in the range of $3.03 billion to $3.1 billion, in line with analyst estimates. The therapy amassed about $2.8 billion in revenue for last year, compared to $2.6 billion in 2015. 

Leerink analyst Geoffrey Porges said the forecast implies Soliris revenue growth of 8 percent at the mid-point of the range, which is impressive, noting that underlying growth for the product would be 14 percent. The analyst added that the 2017 revenue forecast should reassure investors regarding the durability of the drug. 

Last month, Alexion announced that previously issued financial results do not need to be restated following the completion of an internal investigation relating to certain sales practices for Soliris. However, the probe concluded that there was a "material weakness" in the company's controls over financial reporting, which was due to senior management "not setting an appropriate tone." Both CEO David Hallal and chief financial officer Vikas Sinha left the drugmaker in December. 

Meanwhile, for the quarter ended December 31, revenue from Soliris reached $749 million, up from $689 million in the year-ago period but short of expectations of $756 million. Total revenue for the three-month period grew by 19 percent to $831 million, missing forecasts of $836.6 million. The drugmaker's net profit totalled $93 million, versus $67 million in the fourth quarter of 2015. 

Regarding other products, revenue from Strensiq climbed nearly six-fold in the quarter to $71 million compared to the year-ago period, while sales of the enzyme replacement therapy Kanuma, which Alexion obtained in its purchase of Synageva BioPharma in 2015, reached $11 million in the quarter. The therapy was cleared by the FDA for the treatment of lysosomal acid lipase deficiency in December 2015.

For the current year, Alexion anticipates per-share earnings in the range of $5.00 to $5.25 on $3.4 billion to $3.5 billion in revenue, versus analyst expectations of $5.54 per share in earnings on about $3.5 billion in sales. Stifel analyst Stephen Willey commented "we [and most investors] had anticipated today's reset would provide a source of relief and the early pre-market activity appears to be corroborating that hypothesis." 

Meanwhile, the company disclosed Thursday that it was reducing its investment in the investigational drug SBC-103, which was also obtained in the Synageva transaction. The drugmaker indicated that patients currently enrolled in the early trial will continue to receive the therapy, but that no additional studies were planned.