There's more than Eylea to like about Regeneron Pharmaceuticals right now, an analyst said Friday as REGN stock touched another record high.
Eylea is far and away Regeneron's biggest moneymaker. In the December quarter, Eylea generated $1.46 billion in U.S. sales, Regeneron said in a preannouncement this week. Though the total sales number missed estimates, revenue from a new high-dose formulation beat expectations, RBC Capital Markets analyst Brian Abrahams said in a report.
But that's not what drove Abrahams to upgrade REGN stock. He noted strength from the company's Sanofi-partnered allergic conditions treatment Dupixent and good pipeline progress for the move to an outperform rating. Abrahams also raised his price target to 1,076 from 884.
"While shares have appreciated and we acknowledge some may prefer to wait for a pullback before stepping in, with these near-term overhands removed and considerable room for additional fundamental upside, we believe this is as good a time as any to own one of the most dynamic all-around stories in large-cap biotech," he said in a report.
On today's stock market, REGN stock climbed 1.9% to close at 933.20.
REGN Stock: Dupixent Enthusiasm Continues
Abrahams is "enthusiastic" about Dupixent's performance. The blockbuster drug treats numerous allergic conditions including eczema and asthma. Last year, the drug succeeded in a final-phase test of patients with a lung condition called chronic obstructive pulmonary disease, or COPD.
In the first nine months of 2022, Dupixent sales grew 41% and topped $6.2 billion, Regeneron said in a presentation at the J.P. Morgan Healthcare Conference in San Francisco, Calif.
"Our analysis of prescription trends and run rate suggest Dupixent should beat consensus in 2024 which may help drive additional enthusiasm and share upside," Abrahams said. "And our physician feedback has indicated high receptivity and a large unmet need in COPD, enabling about $4 billion peak COPD sales to further propel Regeneron's leading franchise."
Leerink Partners analyst David Risinger noted Dupixent sales look durable even after the expected first patent protecting it expires in 2031 to 2032.
"CEO Len Schleifer stated that Dupixent's patent portfolio offers the potential for protection beyond early 2030s and hinted at development of a more convenient version of Dupixent," he said in a note to clients.
Looking Into Regeneron's Pipeline
Both analysts are closely watching Regeneron's pipeline.
Late this year, Regeneron expects to offer an update on its experimental drug, fianlimab, in patients with non-small cell lung cancer. The biotech company is also testing a drug called linvoseltamab as a treatment for multiple myeloma.
RBC's Abrahams is bullish on Regeneron's chances with linvoseltamab which he calls "a meaningful pipeline catalyst this year." He projects up to $1.5 billion in sales following a potential 2025 launch.
Risinger, the Leerink analyst, notes Regeneron is also working on new treatments for eye diseases, a gene therapy to restore hearing in babies with a genetic condition, cardiovascular diseases and, of note, obesity.
In the latter condition, Regeneron is testing an approach to preserve muscle mass and improve fat loss. The company hopes to begin a Phase 2 study in mid-2024 and could have those results in the second half of 2025. Regeneron is also partnered with Alnylam Pharmaceuticals and AstraZeneca on different approaches to obesity treatment.
Risinger maintained his outperform rating on REGN stock.
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