Alexion Pharmaceutical Inc. ( ALXN)

Q3 2011 Earnings Conference Call

October 20, 2011 10:00 AM ET


Leonard Bell – CEO

Tom Dubin – SVP and Chief Legal Officer

Vikas Sinha – SVP and CFO

David Hallal – SVP, Global Commercial Operations

Steve Squinto – EVP, R&D


Eric Schmidt – Cowen and Company

Salveen Richter – Collins Stewart LLC

Geoff Meacham – JP Morgan

David Freidman – Morgan Stanley

Sapna Srivastava – Goldman Sachs

John Sonnier – William Blair & Company, LLC

Stephen Willey – Stifel Nicolaus

Ian Somaiya – Piper Jaffray

Brian Abrahams – Wells Fargo Securities

Bret Holley – Oppenheimer



Good day and welcome, everyone, to the Alexion Pharmaceutical Incorporated Third Quarter 2011 Results Conference Call. Today’s call is being recorded.

At this time, for opening remarks and introduction, I would like to turn the call over to Dr. Leonard Bell. Please go ahead.

Leonard Bell

Thank you, operator. Good morning and thank you for joining us on today’s call to discuss Alexion’s performance with the third quarter of 2011.

I’m joined by members of Alexion management – Steve Squinto, Executive Vice President and head of R&D; Vikas Sinha, Senior Vice President and Chief Financial Officer; David Hallal, Senior Vice President Global Commercial Operations; and Tom Dubin, Senior Vice President and Chief Legal Officer.

We also welcome our entire Alexion team working around the world. Vikas, David, and Steve will join me on today's call to report on our financial, commercial, and R&D accomplishments in the third quarter and to discuss our strategic initiatives and accelerated execution plans for the remainder of 2011. Before we begin, Tom will apprise you of our potential to make forward-looking statements. Tom?

Tom Dubin

Thanks, Lenny. During this call, we may make forward-looking statements such as expected financial results; medical benefits, regulatory milestones, and commercial potential of Soliris in PNH, aHUS, transplant and other indications in the US and other territories; plans for clinical trials of Soliris in aHUS, transplant, STEC-HUS and other indications, as well as development plans for other products, and operations, reimbursement, price approval and funding processes in different territories.

Forward-looking statements are subject to factors that may cause our results and plans to differ from those expected, including decisions of regulatory authorities regarding approval or limitations on the marketing of Soliris for various indications, the possibility that results of clinical trials are not predictive of the safety and efficacy of Soliris in broader patient populations in the disease studied or in other diseases; the risks that third parties won't agree to license any necessary intellectual property to us on reasonable terms or at all, the possibility that initial results of commercialization are not predictive of future results, the risk that third party payers will not or will not continue to reimburse for the use of Soliris at acceptable rates or at all, and a variety of other risks set forth from time to time in our filings with the SEC, including our 10-Q for the quarter ended June 30, 2011. We do not intend to update any of these forward-looking statements after this call, except when a duty arises under law.

I'd like to remind you that our reported non-GAAP numbers conform to US GAAP except in three respects. First, our non-GAAP numbers exclude share-based compensation. Second, we exclude non-cash tax adjustments associated with utilization of our US net operating losses. And third, with completion of two acquisitions earlier this year, we now also exclude amortization of acquired intangible assets and costs associated with the acquisition. A reconciliation of our GAAP to non-GAAP results is included in the press release we issued this morning. As a further reminder, earnings per share discussed in today's call reflect the two-for-one stock split affected during the second quarter.

Thank you. Lenny?

Leonard Bell

Thank you, Tom. During the third quarter, Alexion made important progress on our key objectives for 2011. First, we continue to achieve strong performance in serving patients with PNH worldwide. Second, the FDA approval of Soliris as a treatment for patients with aHUS late last month marked a major milestone in Alexion’s mission to serve patients with severe and ultra-rare disorders. And finally, we significantly progressed key development programs beyond PNH and beyond aHUS.

Again, we’re continuing to focus on accelerating the growth of our global PNH operations. In Q3, we again achieved steady quarter-on-quarter growth in our core territories of United States, Western Europe and Japan.

While we are pleased with the progress we’ve made to date, we continue to approach the global introduction of Soliris and PNH with urgency, mindful that worldwide, most patients with PNH has still not received an accurate diagnosis, nor started on appropriate treatment. We’ll maintain our consistent focus on identifying patients suffering with PNH by overcoming low levels of PNH disease awareness and inadequate approaches to diagnosis through our education initiatives.

Beyond our core territories, we continue to establish PNH operations in three additional major countries – Turkey, Brazil and Russia – where we have now assembled our leadership teams. We’re likewise focused on the opportunity to serve increasing numbers of patients with PNH in additional countries.

I’d like now turn to review key elements of our initial stages of the introduction of Soliris in the aHUS community in the United States. In addition to my father’s 85th birthday on September 23rd, following the FDA approval on the same date, we have now started to serve patients with aHUS.

As we discussed on our earlier call, patient access to Soliris is supported by a broad and strong label. It includes all patients with aHUS, including children and adults regardless of history of supportive care or presence of an identifiable genetic mutation. Importantly, the label also supports the common understanding aHUS as a disorder of uncontrolled complement activation leading to thrombotic microangiopathy or TMA and that Soliris has indicated for the treatment of patients with aHUS to inhibit complement mediated TMA. Thus, the new product indications, they may clearly identify both the disease mechanism of aHUS as well as (inaudible) directly to the therapeutic action of Soliris.

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