Why Investors Have to Be Happy With Alexion's Latest Update

Health and Healthcare

Published: October 6, 2020 11:05 am

Announcements that Alexion Pharmaceuticals Inc. (NASDAQ: ALXN) made at its virtual Investor Day about expanding its pipeline and its guidance led to a handy gain in its shares on Tuesday.

The company boasts a robust pipeline, with over 20 development programs across seven rare disease franchises, with expected continued growth from more than five novel investigational new drug applications to the FDA by 2025. Alexion also announced an anticipated 2025 global revenue target of $9 billion to $10 billion, and at least 10% revenue compound annual growth rate through 2025 and beyond.

In the short term, the company said that it plans to raise revenue guidance for the 2020 full year by $200 million when it reports its third-quarter results. Right now, analysts are calling for $2.47 in EPS and $1.39 billion in revenue for the third quarter. For the 2020 full year, consensus estimates are set at $11.00 in EPS and $5.67 billion in revenue.

Separately, Alexion said that it expects to return at least $3 billion to shareholders through a multiyear stock buyback program.

Management noted that, roughly three years ago, it laid out an ambitious, multiyear strategy to transform Alexion dramatically and position it for the future, as well as drive continued value creation. As a result, Alexion is a very different company than it was in 2017. It is currently in a new stage of company expansion and diversification that provides a path to long-term sustainable growth and allows the firm to reinvest in innovation for the future and return value to shareholders.

Alexion stock traded up over 1% at $116.95 on Tuesday, in a 52-week range of $72.67 to $121.50. The consensus price target is $141.32.