Three Biotechs Enter…One Biotech Gains

Three biotech stocks–Alexion Pharmaceuticals (ALXN), Amgen (AMGN), and Celgene (CELG)–reported earnings since yesterday’s close. But just one has seen its shares head higher after the announcement.

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That would be Alexion, which reported a profit of $1.38, beating forecasts for $1.23, according to Reuters, on sales of $870 million, ahead of analyst expectations for $826.6 million. Those results have sent Alexion shares up 5.1% to $126.87 at 34:35 p.m. today.

Unfortunately, Amgen and Celgene are trading lower, despite beating earnings forecasts. Credit Suisse analystAlethia Young and team call Amgen’s quarter “mixed,” which helps explain why its stock has dropped 1.4% to $162.25. They explain:

Product revenues were light by $200M although the company raised their bottom line EPS guidance for 2017. Newer product volume growth seemed sound although some legacy products experienced challenges: Reported revenues were $5.46B vs. consensus of $5.57B. EPS beat with $3.15/sh non-GAAP EPS vs. consensus of $3.00/sh driven by lower OpEx spend, specifically with non-GAAP R&D coming in at $748M vs. $900M consensus. We think results for the quarter were mixed, with some notable headwinds on the topline After listening to the call, it seems the quarter consisted of various one-type dynamics for products where revenues were light (Enbrel and Repatha). Enbrel missed by close to $200M ($1,181M vs. $1,360M consensus) and we think rheumatology/dermatology dynamics (both pricing and volume) remain a focus for investors. Repatha came in at $50M vs. $72M consensus although the company noted last quarter was helped by a one-time bulk order. Neulasta helped on the topline at $1,210 M vs. $1,142M consensus although this was helped by some purchases from larger end customers.

…while Evercore ISI’s Umer Raffat explains why investors were disappointed by Celgene’s earnings beat:

Celgene slight miss on topline (-2.6%) driven by Otezla (-$97M) and ex-US Revlimid (-$31M) however, expense mgmt got them to a 5c EPS beat. Based on expense mgmt, CELG raised EPS guidance by 5 cents for 2017 based on slightly better op margin.

Otezla miss driven by gross:net and some contraction in market volumes (Amgen mentioned similar for Enbrel in derm). On gross:net, investors were increasingly aware of this issue, and as we discussed in our biotech previews, consensus modeling +5% QoQ growth for Otezla didnt seem reasonable in light of CELG mgmts comments on Q1 call on Otezla: expanded access in 2017

That didn’t stop Celgene’s shares from falling 1.1% to$123.84. The iShares Nasdaq Biotech ETF (IBB) is little changed at $296.48.