Alexion Reports Second Quarter 2013 Results

  Alexion Reports Second Quarter 2013 Results

Soliris® (eculizumab) Net Product Sales Increased 35 Percent to $370.1 million

               Continued Steady Soliris Growth Globally in PNH

                   aHUS Launch Progresses in US and Europe

          Guidance Revised Upward for 2013 Revenues and Non-GAAP EPS

     Strong Progress in HPP, NMO, Transplant and Other Pipeline Programs

Second Quarter 2013 Financial Highlights:

  *Q2 2013 net product sales increased 35 percent to $370.1 million, compared
    to $274.7 million in Q2 2012.

  *Q2 2013 GAAP net income increased 164 percent to $95.9 million, or $0.48
    per share, compared to Q2 2012 GAAP net income of $36.3 million, or $0.18
    per share. Q2 2012 GAAP net income included $21.8 million of tax expense
    related to structuring of the Enobia acquisition.
  *Q2 2013 non-GAAP net income increased 56 percent to $147.2 million, or
    $0.73 per share, compared to Q2 2012 non-GAAP net income of $94.1 million,
    or $0.47 per share.

Business Wire

CHESHIRE, Conn. -- July 25, 2013

Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN) today announced financial results
for the three and six months ended June 30, 2013. The Company reported net
product sales of Soliris^® (eculizumab) of $370.1 million in the second
quarter of 2013, an increase of 35 percent from the same period in 2012.

Revenue performance for the quarter reflected steady additions of new patients
with paroxysmal nocturnal hemoglobinuria (PNH) globally, and an increasing
number of new patients with atypical hemolytic uremic syndrome (aHUS)
commencing Soliris treatment in the US and Europe.

“In the second quarter, we continued our strong and ongoing global performance
with Soliris in PNH. In the early stages of our aHUS launch, we were
especially pleased to provide Soliris to a steadily growing number of patients
in the US and increasingly in Europe,” said Leonard Bell, M.D., Chief
Executive Officer of Alexion. “Key pipeline initiatives, including our
asfotase alfa program in HPP and our Soliris programs in NMO and transplant,
reached new milestones. As we enter the second half of the year, we will
continue to develop our product portfolio toward supporting an anticipated
series of significant launches in new indications for Soliris and new products
over the next several years."

Second Quarter 2013 Financial Results:
Alexion's non-GAAP operating results are GAAP operating results adjusted for
the impact of certain items described below. A full reconciliation of GAAP
results to non-GAAP results is included later in this press release.

Second Quarter 2013 Non-GAAP Financial Results:
The Company reported non-GAAP net income of $147.2 million, or $0.73 per
share, in the second quarter of 2013, compared to non-GAAP net income of $94.1
million, or $0.47 per share, in the second quarter of 2012.

Alexion's non-GAAP operating expenses for Q2 2013 were $174.5 million,
compared to $142.2 million for Q2 2012. Non-GAAP research and development
(R&D) expenses for Q2 2013 were $63.5 million, compared to $56.3 million for
Q2 2012. Non-GAAP selling, general and administrative (SG&A) expenses for Q2
2013 were $111.0 million, compared to $85.9 million for Q2 2012.

Second Quarter 2013 GAAP Financial Results:
Alexion reported GAAP net income of $95.9 million, or $0.48 per share, in the
second quarter of 2013, compared to GAAP net income of $36.3 million, or $0.18
per share, in the second quarter of 2012. Q2 2012 GAAP net income included
$21.8 million of tax expense related to structuring of the Enobia acquisition.

On a GAAP basis, operating expenses for Q2 2013 were $193.0 million, compared
to $159.4 million for Q2 2012. GAAP R&D expenses for Q2 2013 were $68.6
million, compared to $59.6 million for Q2 2012. GAAP SG&A expenses were $123.2
million for Q2 2013, compared to $94.9 million for Q2 2012.

Balance Sheet:
As of June 30, 2013, the Company had $1.119 billion in cash, cash equivalents
and marketable securities compared to $989.5 million at December31, 2012.

Research and Development Progress:
Alexion currently has development programs underway with its five highly
innovative therapeutic candidates: eculizumab (Soliris) and four additional
novel therapeutic candidates that have the potential to become first-in-class
therapies for patients with severe and ultra-rare disorders.

Ultra-Rare Disease Programs With Eculizumab

  *Neurology: Neuromyelitis Optica (NMO) - At the end of June, Soliris
    received an Orphan Drug designation from the US Food and Drug
    Administration (FDA) for the treatment of NMO. In mid-July, Soliris
    received a positive opinion for Orphan Drug designation from the European
    Committee for Orphan Medicinal Products. Upon regulatory approvals for
    this indication, the US and European Orphan Drug designations would
    entitle Soliris to seven years and ten years, respectively, of marketing
    exclusivity in NMO. The Company is preparing to commence what it expects
    to be a single Company-sponsored, multinational, placebo-controlled,
    registration trial in relapsing NMO.
  *Neurology: Myasthenia Gravis (MG) - Alexion is also preparing to commence
    what it expects to be a single Company-sponsored, multinational,
    placebo-controlled, registration trial in severe, refractory MG.
  *Nephrology: Kidney Transplant - During the quarter, the Company completed
    dosing in its multinational deceased-donor kidney transplant trial in
    patients at elevated risk of antibody mediated rejection (AMR). Enrollment
    in the Company-sponsored, multinational living-donor kidney transplant
    trial in patients at elevated risk of AMR is on-going. Alexion is also
    expanding its kidney transplant program to include a delayed-graft
    function (DGF) clinical trial.
  *Nephrology: STEC-HUS - The Company has obtained and is analyzing
    longer-term control clinical outcome data from an epidemiologic study in
    approximately 400 STEC-HUS patients who received only best supportive care
    during the earlier German epidemic.

Ultra-Rare Disease Programs with Additional Highly Innovative Therapeutics

  *Asfotase Alfa: During Q2, Alexion received Breakthrough Therapy
    designation status from the FDA for asfotase alfa for the treatment of
    patients with hypophosphatasia (HPP) whose first signs or symptoms
    occurred prior to 18 years of age. The Company also completed enrollment
    in a retrospective natural history study in infants with HPP, an
    ultra-rare, inherited and life-threatening metabolic disease.
  *cPMP Replacement Therapy: Alexion is developing a cPMP replacement therapy
    for the treatment of patients with Molybdenum Cofactor Deficiency Type A
    (MoCD), a severe, ultra-rare and genetic metabolic disorder that is fatal
    in newborns. Dosing with the Company's synthetic cPMP replacement has now
    commenced in a study in healthy volunteers. Additionally, enrollment
    continues in the retrospective cPMP study in MoCD patients.
  *ALXN1007: Alexion has completed dosing in a single-dose Phase I study of
    ALXN1007, a novel anti-inflammatory antibody, to evaluate the safety,
    tolerability, pharmacokinetics and pharmacodynamics of this therapeutic
    candidate in healthy volunteers. Dosing in a multi-dose Phase I study in
    healthy volunteers has now commenced.
  *ALXN1102/1103: Enrollment continues in a Phase I study to characterize the
    mechanism of action and develop initial safety data for ALXN1102 and
    ALXN1103, different formulations of one of Alexion's novel complement
    inhibitors.

2013 Financial Guidance:

Alexion today announced that it is raising its 2013 revenue guidance from the
previous range of $1.505 to $1.520 billion, now to the higher range of $1.520
to $1.530 billion. The upward revision reflects continued global growth of
Soliris in PNH and growth from the ongoing launch of Soliris in aHUS. Guidance
for 2013 non-GAAP EPS is also being revised upward, from the previous range of
$2.87 to $2.97, now to the higher range of $2.97 to $3.02, based on a forecast
of 204 million diluted shares outstanding.

On a non-GAAP basis, 2013 guidance for R&D expenses is being revised downward,
from the previous range of $285 to $295 million, now to the lower range of
$275 to $285 million, and 2013 guidance for SG&A expenses is being revised
upward, from the previous range of $425 to $435 million, now to the higher
range of $435 to $445 million. The Company’s non-GAAP effective tax rate,
reported on a cash tax liability basis, is being revised downward, from the
previous range of 7 to 9 percent, now to the lower range of 6 to 8 percent.
The Company's share-based compensation expense for the year is being revised
upward, from the previous range of $63 to $67 million, now to the higher range
of $76 to $78 million.

Other items of 2013 guidance provided in the Company's press release of
February 14, 2013 are being reiterated today: cost of sales is expected to be
approximately 10 percent of net product sales, and the Company’s GAAP
effective tax rate is expected to be in the range of 29 to 31 percent.

Conference Call/Web Cast Information:

Alexion will host a conference call/audio web cast to discuss matters
mentioned in this release. The call is scheduled for today, July 25, at 10:00
a.m., Eastern Time. To participate in this call, dial 877-675-4749 (USA) or
719-325-4804 (International), passcode 3976928, shortly before 10:00 a.m.,
Eastern Time. A replay of the call will be available for a limited period
following the call, beginning at 1:00 PM, Eastern Time. The replay number is
888-203-1112 (USA) or 719-457-0820 (International), passcode 3976928. The
audio webcast can be accessed at www.alexionpharma.com.

About Soliris:

Soliris is a first-in-class terminal complement inhibitor developed from the
laboratory through regulatory approval and commercialization by Alexion.
Soliris is approved in the US, European Union, Japan and other countries as
the first and only treatment for patients with paroxysmal nocturnal
hemoglobinuria (PNH), a debilitating, ultra-rare and life-threatening blood
disorder, characterized by complement-mediated hemolysis (destruction of red
blood cells). Soliris is indicated to reduce hemolysis. Soliris is also
approved in the US and the European Union as the first and only treatment for
patients with atypical hemolytic uremic syndrome (aHUS), a debilitating,
ultra-rare and life-threatening genetic disorder characterized by
complement-mediated thrombotic microangiopathy, or TMA (blood clots in small
vessels). Soliris is indicated to inhibit complement-mediated TMA. The
effectiveness of Soliris in aHUS is based on the effects on TMA and renal
function. Prospective clinical trials in additional patients are ongoing to
confirm the benefit of Soliris in patients with aHUS. Soliris is not indicated
for the treatment of patients with Shiga toxin E. coli related hemolytic
uremic syndrome (STEC-HUS). For the breakthrough innovation in complement
inhibition, Alexion and Soliris have received the pharmaceutical industry's
highest honors: the 2008 Prix Galien USA Award for Best Biotechnology Product
with broad implications for future biomedical research and the 2009 Prix
Galien France Award in the category of Drugs for Rare Diseases. More
information including the full prescribing information on Soliris is available
at www.soliris.net.

About Alexion:

Alexion Pharmaceuticals, Inc. is a biopharmaceutical company focused on
serving patients with severe and ultra-rare disorders through the innovation,
development and commercialization of life-transforming therapeutic products.
Alexion is the global leader in complement inhibition and has developed and
markets Soliris® (eculizumab) as a treatment for patients with PNH and aHUS,
two debilitating, ultra-rare and life-threatening disorders caused by chronic
uncontrolled complement activation. Soliris is currently approved in more than
40 countries for the treatment of PNH, and in the United States and European
Union for the treatment of aHUS. Alexion is evaluating other potential
indications for Soliris and is developing four other highly innovative
biotechnology product candidates, which are being investigated across nine
severe and ultra-rare disorders beyond PNH and aHUS. This press release and
further information about Alexion Pharmaceuticals, Inc. can be found at:
www.alexionpharma.com.

[ALXN-E]

This news release contains forward-looking statements, including statements
related to guidance regarding anticipated financial results for 2013,
assessment of the Company's financial position and commercialization efforts,
medical benefits and commercial potential for Soliris for PNH and aHUS and
other potential indications, medical and commercial potential of Alexion's
complement-inhibition technology and other technologies, and plans for
clinical programs for each of our product candidates. Forward-looking
statements are subject to factors that may cause Alexion's results and plans
to differ from those expected, including for example, decisions of regulatory
authorities regarding marketing approval or material limitations on the
marketing of Soliris for PNH and aHUS and other potential indications, delays
in arranging satisfactory manufacturing capabilities and establishing
commercial infrastructure, failure to satisfactorily address the issues raised
by the FDA in the Warning Letter disclosed by Alexion in March 2013, the
possibility that results of clinical trials are not predictive of safety and
efficacy results of Soliris in broader patient populations in the disease
studied or other diseases, the risk that acquisitions will not result in
short-term or long-term benefits, the possibility that current results of
commercialization are not predictive of future rates of adoption of Soliris in
PNH, aHUS or other diseases, the risk that third parties will not agree to
license any necessary intellectual property to Alexion on reasonable terms or
at all, the risk that third party payors (including governmental agencies)
will not reimburse or continue to reimburse for the use of Soliris at
acceptable rates or at all, the risk that estimates regarding the number of
patients with PNH, aHUS or other diseases are inaccurate, and a variety of
other risks set forth from time to time in Alexion's filings with the US
Securities and Exchange Commission, including but not limited to the risks
discussed in Alexion's Quarterly Report on Form 10-Q for the period ended
March 31, 2013 and in our other filings with the US Securities and Exchange
Commission. Alexion does not intend to update any of these forward-looking
statements to reflect events or circumstances after the date hereof, except
when a duty arises under law.

In addition to financial information prepared in accordance with GAAP, this
news release also contains non-GAAP financial measures that Alexion believes,
when considered together with the GAAP information, provide investors and
management with supplemental information relating to performance, trends and
prospects that promote a more complete understanding of our operating results
and financial position during different periods. The non-GAAP results exclude
the impact of the following GAAP items: share-based compensation expense,
acquisition-related costs, amortization of purchased intangible assets, taxes
related to acquisition structuring, intangible asset impairments, upfront and
milestone payments related to licensing and collaboration agreements, and
non-cash taxes. These non-GAAP financial measures are not intended to be
considered in isolation or as a substitute for, or superior to, the financial
measures prepared and presented in accordance with GAAP and should be reviewed
in conjunction with the relevant GAAP financial measures. Please refer to the
attached Reconciliation of GAAP to Non-GAAP Net Income for explanations of the
amounts adjusted to arrive at non-GAAP net income and non-GAAP earnings per
share amounts for the three and six month periods ended June 30, 2013 and
2012.

ALEXION PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
                                                                
                          Three months ended              Six months ended
                          June 30                         June 30
                          2013            2012            2013            2012
                                                                          
Net product sales         $ 370,091       $ 274,719       $ 709,032       $ 519,452
                                                                          
Cost of sales               39,377          31,613          74,646          59,881
                                                                          
Research and                68,563          59,635          143,099         105,043
development
Selling, general            123,189         94,855          232,015         182,097
and administrative
Acquisition-related         1,167           4,807           4,401           18,480
costs
Amortization of
purchased                   104             104             208             208
intangible assets
                                                                       
Total operating            193,023       159,401       379,723       305,828 
expenses
                                                                          
Operating income            137,691         83,705          254,663         153,743
                                                                          
Interest and other         (428    )      (1,983  )      (659    )      (4,212  )
expense
                                                                          
Income before               137,263         81,722          254,004         149,531
income taxes
                                                                          
Income tax                  41,378          45,464          75,902          67,860
provision
                                                                       
Net income                $ 95,885       $ 36,258       $ 178,102      $ 81,671  
                                                                          
Earnings per common
share
Basic                     $ 0.49         $ 0.19         $ 0.92         $ 0.44    
Diluted                   $ 0.48         $ 0.18         $ 0.90         $ 0.42    
                                                                          
Shares used in
computing earnings
per common share
Basic                      195,247       188,575       193,944       187,129 
Diluted                    199,299       197,051       198,096       195,832 
                                                                                    


ALEXION PHARMACEUTICALS, INC.
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
      (in thousands, except per share amounts)
       (unaudited)
                                  Three months ended            Six months ended
                                     June 30                         June 30
                                     2013          2012            2013          2012
                                                                                     
       Net income
       reconciliation:
       GAAP net income               $ 95,885        $ 36,258        $ 178,102       $ 81,671
                                                                                     
       Share-based                     17,957          12,989          34,812          26,306
       compensation expense
       Acquisition-related             1,167           4,807           4,401           18,480
       costs (1)
       Amortization of
       purchased intangible            104             104             208             208
       assets
       Upfront and milestone
       payments related to
       license and                     -               -               3,000           -
       collaboration
       agreements
       Non-cash taxes (2)              32,117          18,103          58,021          33,657
       Tax related to
       acquisition structuring         -               21,812          -               21,812
       (3)
                                                                                  
       Non-GAAP net income           $ 147,230      $ 94,073       $ 278,544      $ 182,134 
                                                                                     
       GAAP earnings per share       $ 0.48         $ 0.18         $ 0.90         $ 0.42    
       - diluted
       Non-GAAP earnings per         $ 0.73         $ 0.47         $ 1.38         $ 0.92    
       share - diluted
                                                                                     
       Shares used in
       computing diluted              199,299       197,051       198,096       195,832 
       earnings per share
       (GAAP)
       Shares used in
       computing diluted              202,593       198,431       201,340       197,180 
       earnings per share
       (non-GAAP)
                                                                                     
       Cost of sales
       reconciliation:
       GAAP cost of sales            $ 39,377        $ 31,613        $ 74,646        $ 59,881
       Share-based                    (717    )      (672    )      (1,592  )      (1,275  )
       compensation expense
       Non-GAAP cost of sales        $ 38,660       $ 30,941       $ 73,054       $ 58,606  
                                                                                     
       Research and
       development
       reconciliation:
       GAAP research and             $ 68,563        $ 59,635        $ 143,099       $ 105,043
       development
       Share-based                     (5,068  )       (3,381  )       (10,158 )       (6,730  )
       compensation expense
       Upfront and milestone
       payments related to
       license and                    -             -             (3,000  )      -       
       collaboration
       agreements
       Non-GAAP research and         $ 63,495       $ 56,254       $ 129,941      $ 98,313  
       development
                                                                                     
       Selling, general and
       administrative
       reconciliation:
       GAAP selling, general         $ 123,189       $ 94,855        $ 232,015       $ 182,097
       and administrative
       Share-based                    (12,172 )      (8,936  )      (23,062 )      (18,301 )
       compensation expense
       Non-GAAP selling,
       general and                   $ 111,017      $ 85,919       $ 208,953      $ 163,796 
       administrative
                                                                                     
       Income tax provision
       reconciliation:
       GAAP income tax               $ 41,378        $ 45,464        $ 75,902        $ 67,860
       provision
       Non-cash taxes (2)              (32,117 )       (18,103 )       (58,021 )       (33,657 )
       Tax related to
       acquisition structuring        -             (21,812 )      -             (21,812 )
       (3)
       Non-GAAP income tax           $ 9,261        $ 5,549        $ 17,881       $ 12,391  
       provision
                                                                                     
       The following table
(1 )   summarizes
       acquisition-related
       costs:
                                                                                     
                                     Three months ended              Six months ended
                                     June 30                         June 30
                                     2013            2012            2013            2012
       Acquisition-related
       costs:
       Separately-identifiable       $ -             $ 799           $ 248           $ 3,095
       employee costs
       Professional fees               -               2,041           775             10,510
       Changes in fair value
       of contingent                  1,167         1,967         3,378         4,875   
       consideration
                                     $ 1,167        $ 4,807        $ 4,401        $ 18,480  
                                                                                               

      Non-cash taxes represents the adjustment from GAAP tax expense to the
(2)  amount of taxes that are payable in cash. The adjustment includes tax
      amounts that are not currently payable in cash due to the continued
      utilization of our US net operating losses and credits.
      
      The tax provision for the three and six months ended June 30, 2012
(3)   includes tax expense of $21.8 million related to the structuring of the
      Enobia acquisition.
      


ALEXION PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
                                                           
                                                 June 30,        December 31,
                                                 2013            2012
Cash and cash equivalents                        $ 936,464       $  989,501
Marketable securities                              182,926          -
Trade accounts receivable, net                     355,284          295,598
Inventories, net                                   112,627          94,521
Deferred tax assets, current                       19,892           26,086
Other current assets                               71,440           89,894
Property, plant and equipment, net                 173,721          165,629
Deferred tax assets, noncurrent                    9,734            13,954
Intangible assets, net                             643,252          646,678
Goodwill                                           254,073          253,645
Other noncurrent assets                           55,825          38,054
Total assets                                     $ 2,815,238     $  2,613,560
                                                                 
Accounts payable and accrued expenses            $ 214,346       $  271,275
Current portion of long-term debt                  48,000           48,000
Other current liabilities                          40,632           40,814
Long-term debt                                     89,000           101,000
Contingent consideration                           142,048          139,002
Other noncurrent liabilities                      69,672          42,619
Total liabilities                                 603,698         642,710
                                                                 
Total stockholders' equity                        2,211,540       1,970,850
Total liabilities and stockholders' equity       $ 2,815,238     $  2,613,560


Contact:

Alexion Pharmaceuticals, Inc.
Irving Adler, 203-271-8210
Executive Director, Corporate Communications
or
Rx Communications (Investors)
Rhonda Chiger, 917-322-2569
 
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