Alexion Quarter 2019 revenues 15% up

• 2Q19 total revenues of $1,203.3 million, a 15 percent increase over 2Q18 and a 23 percent volume increase

• 2Q19 GAAP diluted EPS of $2.04; non-GAAP diluted EPS of $2.64

• Received 3 regulatory approvals – SOLIRIS^® (eculizumab) for adults with neuromyelitis optica spectrum disorder (NMOSD) in the U.S., and ULTOMIRIS^® (ravulizumab-cwvz) for adults with paroxysmal nocturnal hemoglobinuria (PNH) in Japan and the EU

• ULTOMIRIS for atypical hemolytic uremic syndrome (aHUS) under priority review with U.S. FDA

• Total revenues and EPS guidance increased to reflect strength of the business and continued growth

BOSTON–(BUSINESS WIRE)–Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) today announced financial results for the second quarter of 2019. Total revenues in the second quarter were $1,203.3 million, a 15 percent increase compared to the same period in 2018. The negative impact of foreign currency on total revenues year-over-year was 1 percent, or $15.1 million, inclusive of hedging activities. On a GAAP basis, diluted EPS in the quarter was $2.04, a 200 percent increase versus the prior year. The second quarter of 2018 included $803.7 million of expense related to the value of the in-process research and development asset acquired in connection with our acquisition of Wilson Therapeutics AB. Non-GAAP diluted EPS for the second quarter of 2019 was $2.64, a 28 percent increase versus the second quarter of 2018.

“We delivered another strong quarter, with continued growth driven by the successful U.S. launches of ULTOMIRIS in PNH and SOLIRIS in gMG. We received three regulatory approvals over the last month, including SOLIRIS for NMOSD in the U.S., and ULTOMIRIS for PNH in Japan and the EU. In addition, the FDA granted priority review for ULTOMIRIS in atypical HUS,” said Ludwig Hantson, Ph.D., Chief Executive Officer of Alexion. “We are well positioned to continue our momentum in the second half of 2019, strengthening our four durable franchises in hematology and nephrology, neurology, metabolics and FcRn, advancing and expanding our pipeline, and serving more people living with rare diseases than ever before.”

Second Quarter 2019 Financial Highlights

• Total net product sales were $1,202.5 million in the second quarter of 2019, compared to $1,044.7 million in the second quarter of 2018.
• SOLIRIS^® (eculizumab) net product sales were $980.8 million, compared to $898.2 million in the second quarter of 2018, representing a 9 percent increase. SOLIRIS volume increased 17 percent year-over-year. SOLIRIS net product sales for the second quarter 2019 included a $31.6 million reduction to revenue related to a recent judicial order on SOLIRIS pricing in Canada. The reduction in revenue includes the impact for the period from September 2017 to June 2019.
• ULTOMIRIS^® (ravulizumab-cwvz) net product sales were $54.2 million in the second quarter of 2019.
• STRENSIQ^® (asfotase alfa) net product sales were $141.3 million, compared to $125.1 million in the second quarter of 2018, representing a 13 percent increase. STRENSIQ volume increased 21 percent year-over-year.
• KANUMA^® (sebelipase alfa) net product sales were $26.2 million, compared to $21.4 million in the second quarter of 2018, representing a 22 percent increase. KANUMA volume increased 33 percent year-over-year.
• GAAP cost of sales was $99.2 million, compared to $95.3 million in the second quarter of 2018. Non-GAAP cost of sales was $95.7 million, compared to $89.3 million in the second quarter of 2018.
• GAAP R&D expense was $187.6 million, compared to $173.4 million in the second quarter of 2018. Non-GAAP R&D expense was $148.7 million, compared to $158.3 million in the second quarter of 2018.
• GAAP SG&A expense was $299.3 million, compared to $277.3 million in the second quarter of 2018. Non-GAAP SG&A expense was $255.8 million, compared to $230.4 million in the second quarter of 2018.
• GAAP acquired in-process research and development expense (benefit) was $(4.1) million related to the agreement of the final working capital adjustment for the Syntimmune, Inc. acquisition, compared to $803.7 million in the second quarter of 2018, related to the in-process research and development asset acquired in connection with the 2018 acquisition of Wilson Therapeutics AB.
• GAAP income tax expense was $39.7 million, compared to income tax expense of $38.8 million in the second quarter of 2018. Non-GAAP income tax expense was $90.2 million, compared to $77.1 million in the second quarter of 2018.
• GAAP diluted EPS was $2.04, compared to $(2.05) in the second quarter of 2018. The second quarter of 2018 included $803.7 million of expense related to the value of the in-process research and development asset acquired in connection with the Wilson Therapeutics AB acquisition. Non-GAAP diluted EPS was $2.64, compared to $2.07 in the second quarter of 2018.

Research and Development

PHASE 3

• SOLIRIS – Neuromyelitis Optica Spectrum Disorder (NMOSD): In June 2019, the U.S. Food and Drug Administration (FDA) approved SOLIRIS for adults with anti-aquaporin-4 (AQP4) auto antibody-positive NMOSD. Applications for approval in the European Union (EU) and Japan are under review. Alexion plans to initiate a Phase 3 study in children and adolescents with NMOSD by the end of 2019.
• SOLIRIS – Generalized Myasthenia Gravis (gMG): Dosing is underway in a Phase 3 study of SOLIRIS in children and adolescents with gMG.
• ULTOMIRIS – Paroxysmal Nocturnal Hemoglobinuria (PNH): ULTOMIRIS was approved for adults with PNH in Japan in June 2019 and in the EU in July 2019. A Phase 3 study of ULTOMIRIS in children and adolescents with PNH is underway.
• ULTOMIRIS – Atypical Hemolytic Uremic Syndrome (aHUS): In June 2019, Alexion announced that the FDA granted priority review for ULTOMIRIS in aHUS and set a Prescription Drug User Fee Act (PDUFA) target action date of October 19, 2019. The filing was based on previously announced positive topline results from a Phase 3 study of ULTOMIRIS in complement inhibitor-naïve patients with aHUS. Alexion plans to file for regulatory approvals in the EU and Japan in the second half of 2019. In addition, a Phase 3 study of ULTOMIRIS in children and adolescents with aHUS is underway.
• ULTOMIRIS – Subcutaneous: Dosing is underway in a single, PK-based Phase 3 study of ULTOMIRIS delivered subcutaneously once per week to support registration in PNH and aHUS. Data are expected in early 2020.
• ULTOMIRIS – gMG: Dosing is underway in a Phase 3 study of ULTOMIRIS in gMG.
• ULTOMIRIS – NMOSD: Alexion plans to initiate a Phase 3 study of ULTOMIRIS in NMOSD by the end of 2019, pending regulatory feedback.
• ULTOMIRIS – Hematopoietic Stem Cell Transplant-Associated Thrombotic Microangiopathy (HSCT-TMA): Alexion plans to initiate a Phase 3 study of ULTOMIRIS in HSCT-TMA in the first half of 2020, pending regulatory feedback.
• ALXN1840 (WTX101) – Wilson Disease: Dosing is underway in a Phase 3 study of ALXN1840 (WTX101) in Wilson disease, a rare genetic disorder with devastating hepatic and neurological consequences. ALXN1840 is a first-in-class oral copper-binding agent with a unique mechanism of action to bind serum copper and promote its removal from the liver. Enrollment is expected to complete in early 2020.

PHASE 1/2

• ALXN1830 (SYNT001): Alexion plans to initiate a Phase 2/3 study of ALXN1830 (SYNT001) in warm autoimmune hemolytic anemia (WAIHA) in early 2020. In addition, Alexion plans to initiate a Phase 1 study of a subcutaneous formulation of ALXN1830 in healthy volunteers in early 2020. Pending results from the Phase 1 study, Alexion plans to initiate a Phase 2/3 study of subcutaneous ALXN1830 in gMG in 2020.
• ALXN1810 – Subcutaneous: Alexion has completed a Phase 1 study of subcutaneous ALXN1210 co-administered with Halozyme’s ENHANZE^® drug-delivery technology, recombinant human hyaluronidase enzyme (rHuPH20), a next-generation subcutaneous formulation called ALXN1810. Strategic planning for the best development path for ALXN1810 is ongoing.
• ULTOMIRIS – Amyotrophic Lateral Sclerosis (ALS): Alexion plans to initiate a proof-of-concept study for ULTOMIRIS in ALS in early 2020, pending regulatory feedback.
• ULTOMIRIS – Primary Progressive Multiple Sclerosis (PPMS): Alexion plans to initiate an exploratory clinical study of ULTOMIRIS in PPMS.
• Caelum Biosciences – CAEL-101 – Light Chain (AL) Amyloidosis: Alexion is collaborating with Caelum Biosciences to develop CAEL-101 for AL amyloidosis, a rare systemic disorder that causes misfolded immunoglobulin light chain protein to build up in and around tissues, resulting in progressive and widespread organ damage. CAEL-101 is a first-in-class amyloid fibril targeted therapy designed to improve organ function by reducing or eliminating amyloid deposits in patients with AL amyloidosis. In a Phase 1a/1b study, CAEL-101 demonstrated improved organ function, including cardiac and renal function, in patients with relapsed and refractory AL amyloidosis. Pending regulatory feedback, a Phase 2/3 study investigating CAEL-101 as an add-on to current standard-of-care therapy is planned to begin in 2020.
• Affibody AB – ABY-039: In April 2019, Alexion entered into a partnership with Affibody AB, following approval from the relevant regulatory authorities, to co-develop ABY-039 for rare Immunoglobulin G (IgG)-mediated autoimmune diseases. Currently in Phase 1 development, ABY-039 is a bivalent antibody-mimetic that targets the neonatal Fc receptor (FcRn). ABY-039 has been specifically designed to combine Affibody’s protein therapeutics platform (Affibody^® molecules) and Albumod^TM technology to achieve a long half-life, which, along with its small size provides the potential for less frequent, convenient, at-home subcutaneous administration.

PRE-CLINICAL

• ALXN1720: In June 2019, Alexion submitted the initial Clinical Trial Authorization (CTA) application to the Medicines and Healthcare Products Regulatory Agency (MHRA) for the initiation of a Phase 1 study of ALXN1720, a novel anti-C5 albumin-binding bi-specific mini-body that binds and prevents activation of human C5. Alexion plans to initiate this first-in-human study in late 2019.
• Zealand Pharma A/S: Alexion is collaborating with Zealand Pharma A/S to discover and develop novel peptide therapies for up to four targets in the complement pathway. Peptides offer a number of advantages, including being highly selective and potent, allowing low dosage volumes for ease of administration, and having the potential to treat a broad range of complement-mediated diseases.
• Dicerna – GalXC^TM: Alexion is collaborating with Dicerna Pharmaceuticals to jointly discover and develop up to four subcutaneously delivered GalXC^TM RNA interference (RNAi) candidates, currently in pre-clinical development, for the treatment of complement-mediated diseases.
• Complement Pharma – CP010: Alexion is collaborating with Complement Pharma to co-develop CP010, a pre-clinical C6 inhibitor that has the potential to treat multiple neurological disorders.

2019 Financial Guidance

Alexion is increasing total revenues and EPS guidance. Full guidance updates are outlined below.

Updated 2019 financial guidance assumes a GAAP effective tax rate of 6 to 7 percent and a non-GAAP effective tax rate of 14 to 15 percent.

Alexion’s financial guidance is based on current foreign exchange rates net of hedging activities and does not include the effect of acquisitions, license and collaboration agreements, intangible asset impairments, litigation charges, changes in fair value of contingent consideration or restructuring and related activity outside of the previously announced activities that may occur after the issuance of this press release.