ALXN Alexion Pharmaceuticals Inc

By Austen Hufford

Alexion Pharmaceuticals Inc. reported that revenue increased but profit fell as the rare drug market continues to ramp up sales of new drugs.

The company, which focuses on a narrow range of treatments for rare diseases, also cut its adjusted earnings guidance for the year.

Sales of Soliris, a treatment for two serious blood conditions that affect a very small percentage of the global population, rose to $701 million from $636 million a year ago.

Alexion posted a profit of $114.9 million, or 51 cents a share, compared with $170.2 million, or 84 cents a share, a year prior. The number of shares outstanding rose 10%.

Alexion said a May interpretation released by the U.S. Securities and Exchange Commission caused it to change how it accounts for income tax in its adjusted results. With special items excluded, adjusted earnings per share were $1.13, or $1.25 a share if the previous tax accounting method was used.

Revenue climbed 18% to $753 million.

Analysts surveyed by Thomson Reuters forecast per-share earnings of $1.17 on revenue of $743 million.

The company said it now expects earnings per share to be between $4.50 and $4.65, down from the previous range of the low end of $5.00 to $5.20. It previously said it expected its revenue forecast to fall at the low end of its $3.05 billion to $3.1 billion range, but no longer expects it to fall at the low end.

Research and development expenses rose 36% to $179.3 million as general and administrative expenses rose 4.7% to $231.8 million.

In June, Alexion completed its $8.4 billion acquisition of Synageva, a smaller maker of medicines for rare diseases. The move continued the deal-making frenzy among pharmaceutical companies centered on rare diseases, treatments that have been considered attractive because regulators often give their marketers financial incentives, such as extended periods of market exclusivity. Still some companies in the sector have come under scrutiny from congress and regulators for buying up rare drugs and then raising prices.

In October, the U.S. Food and Drug Administration approved Alexion's second major drug Strensiq, an injectable treatment for an extremely rare, often deadly metabolic disorder. Strensiq had $45.1 million in sales in the quarter, up from $33 million in the March quarter.

In December, the FDA approved Kanuma as a treatment for a rare but deadly disease caused by an enzyme deficiency. It posted $6.4 million in sales, up from $2.5 million in the March quarter.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

July 28, 2016 07:42 ET (11:42 GMT)

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