Alexion Pharmaceuticals Inc's (ALXN.O) forecast for full-year revenue was not as bad as some investors had feared, at a time when the rare-disease drug maker is looking to steady the ship following the exit of its top management.
The U.S. biotech's flagship drug, Soliris, has fueled much of the company's growth, but slowing sales growth in recent quarters and looming competition have made investors jittery.
The future of the company hinges on the successful development of its highly anticipated drug, ALXN1210, aimed at treating the same rare blood disorders as Soliris.
The New Haven, Connecticut-based company on Thursday forecast 2017 revenue of $3.40 billion-$3.50 billion, falling short of the average analyst estimate of $3.54 billion (2.84 billion pounds), according to Thomson Reuters I/B/E/S.
"While revenue guidance implies only modest growth, investors should be relieved, since fears about significant slowdown in revenue were not realized," Cowen & Co's Eric Schmidt said.
Analysts attributed the soft forecast to a stronger dollar, disruptions to Soliris access in Latin America, as well as the adverse impact of patient enrollment for ALXN1210's trials.
ALXN1210, which is in two late-stage studies, could eat into Soliris sales as the experimental drug's dosing schedule is designed to reduce the number of times it needs to be administered to six per year from about 26 with Soliris.
David Brennan, interim CEO and former head of British drugmaker AstraZeneca Plc (AZN.L), said Alexion is actively looking at M&A opportunities.
Brennan replaced David Hallal, who justified the company's $8.4 billion purchase of Synageva Biopharma, touting the potential of enzyme replacement therapies Kanuma and SBC-103.
While Kanuma generated only $29 million in 2016, Alexion said on Thursday it was not planning additional studies on SBC-103, opting instead to wait for early-stage data to decide the drug's fate. [nBwbhPjCba]
"Management has essentially decided to discontinue SBC-103 – making the Synageva acquisition increasingly look like a miscalculation of historic proportions," William Blair's Stephen Willey said.
The past few months have been choppy for the drugmaker, with both Hallal and chief financial officer leaving the company in December amid speculation that the board had lost confidence in them.
Alexion said in November it was investigating allegations related to Soliris' sales practices. [nL4N1E73HU]
The company, however, revealed last month that the probe had found no instances of improper revenue recognition, but it did identify a material weakness in internal controls over financial reporting in some previous quarters.
(Reporting by Natalie Grover in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)