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Citi Sees Plenty Of Q2 Earnings Beats Ahead In Biotech Sector

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Large-cap biotech stocks should see healthy second-quarter results driven by strong demand and new products, a Citi analyst said Thursday.

Performance of the sector will look especially attractive in light of a weak first quarter, when the sector was held back by poor weather, health-care reform and a draw-down of drug inventories, according to Citi's Yaron Werber.

Companies likely to beat Wall Street's estimates in the upcoming reporting period in Werber's view include a half-dozen of the biggest names in the sector.

Alexion Pharmaceuticals (NASDAQ: ALXN) should exceed consensus views calling for sales of $508 million. Werber's sees sales of $510 million. Results are getting driven by strong sales of its Soliris drug for atypical hemolytic uremic syndrome, a rare and often fatal disease. Werber said sales of the drug outside the U.S. are strong. Soliris is approved in nearly 40 countries.

Werber forecast Alexion's second-quarter earnings of $1.08 per share, versus the Street's $1.06.

Amgen (NASDAQ: AMGN) may see a strong rebound from a weak first quarter, with upcoming results driven by its self-injected Enbrel drug for rheumatoid arthritis and psoriasis, as well as its Prolia drug for male osteoporosis and Kyprolis, a multiple myeloma drug.

The Wall Street consensus for Amgen is $2.05 on sales of $4.9 billion: Werber expects $2.08 and $5 billion in sales.

Biogen Idec (NASDAQ: BIIB) might beat the Wall Street consensus with results based particularly on strong sales of its Tecfidra drug for relapsing multiple sclerosis. Werber sees total second-quarter sales of $2.2 billion versus a $2.1 billion consensus. For earnings, Werber expects $1.83 per share, compared with the $1.81 Street view.

Gilead Sciences' (NASDAQ: GILD) Chronic Hepatitis C drug Sovaldi is performing well above Street views according to Werber, who forecast second-quarter earnings of $0.90 per share on revenue of $1.8 billion. Consensus calls for$0.89 per share, also on $1.8 billion in revenue.

Medivation's (NASDAQ: MDVN) Xtandi prostate cancer drug may help the company exceed Street views because of increased market share and expanded use following its approval for pre-chemotherapy. Werber sees earnings of $.025 per share on revenue of $120 million. Wall Street expects $0.21 per share, also on revenue of $120 million.

Regeneron Pharmaceutical's (NASDAQ: REGN) Eylea drug for macular degeneration has performed better than expected because of higher user demand due to improved weather and a slight increase in inventory days, Werber said. He expects Regeneron earnings of $2.39 per share compared with the consensus $2.26 a share for the second quarter.

Latest Ratings for ALXN

DateFirmActionFromTo
Nov 2014JP MorganMaintainsOverweight
Sep 2014SunTrust Robinson HumphreyInitiates Coverage onBuy
Jul 2014Credit SuisseMaintainsNeutral

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Posted-In: Citi Yaron WerberAnalyst Color Health Care Analyst Ratings General

 

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