Alexion Jumps as Lower-Than-Projected Tax Rate Boosts Profit

Alexion Pharmaceuticals Inc. (ALXN), maker of the rare-disease drug Soliris, soared to a record value after fourth-quarter earnings and its 2014 forecast exceeded analysts’ estimates, helped by a lower-than-projected tax rate.

Alexion gained 21 percent to $162 at 10:03 a.m. New York time, after reaching $169.98, its highest intraday price since the company first sold stock to the public in 1996. The shares of the Cheshire, Connecticut-based company had risen 41 percent in the 12 months through yesterday.

Alexion reported earnings, excluding one-time items, of 87 cents a share, topping by 3 cents the average of 18 analysts’ estimates compiled by Bloomberg. The drugmaker’s 2014 profit forecast of $3.70 to $3.80 a share was higher than the average estimate of $3.46. The company also projected an adjusted tax rate of 10 percent to 11 percent, compared with the 26 percent estimate of Cowen & Co. analyst Eric Schmidt.

“The biggest news today, though, is an Irish tax restructuring the company has just completed,” Schmidt wrote in a research note today. “2014 guidance was ahead of consensus on the top line, but far ahead of consensus on the bottom line due to the tax restructuring. This will drive lower future taxes and cost of goods sold, and higher profitability, than the Street had anticipated.”

Alexion forecast 2014 revenue of $2 billion to $2.02 billion, higher than the average estimate of $1.97 billion.

Fourth-quarter sales surged 38 percent to $441.9 million, beating the average $431.5 million estimate, as use of Soliris rose in Western Europe, Japan and the U.S.

The drugmaker reported a net loss of $19 million, or 10 cents a share, compared with profit of $81 million, or 40 cents, a year earlier.

To contact the reporter on this story: Meg Tirrell in New York at mtirrell@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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