Regeneron Pharmaceuticals is the IBD Stock of the Day as the biotech giant trades near an all-time high ahead of its earnings report due Nov. 2. The big debate for REGN stock: Will the company get its mojo back in its core eye disease treatment business?
On the stock market today, REN stock hit an intraday high of 853.97. Shares edged higher by 0.14% to close at 839.63.
In 2023, Regeneron stock has gained 17% — outperforming many large-cap biotech stocks.
REGN Stock: Eylea Competition Mounts
REGN stock popped in August after the Food and Drug Administration approved a higher-dose version of its eye-disease drug Eylea.
With that move, the biotech stock broke out of a double-bottom base. Further, Regeneron stock has been working on a flat base in a tight trading zone. REGN stock holds an 847.50 buy point.
Its relative strength line has been trending higher for several months.
The FDA's recent approval of the higher-dose version of Eylea came amid increased competition for the lower-dose version from Roche's Vabysmo drug.
The higher dose of Eylea goes to treat three eye diseases: wet age-related macular degeneration, diabetic macular edema and diabetic retinopathy.
Higher-Dose Eylea Upside
Analysts bullish on REGN stock expect sales of the higher-dose version to take off.
At Bank of America, analyst Geoff Meacham is bearish: "Although REGN shares have rebounded robustly since Eylea HD (high dose) approval in late August, we maintain that overall expectations on Eylea HD performance are too high."
He added: "Furthermore, with increasing competition and negotiations for Eylea HD coverage underway, we anticipate that Eylea sales will continue to weaken, driven by a mix of volume and pricing pressures."
Bayer is Regeneron's marketing partner for the low-dose version of Eylea.
Another question for Regeneron stock is whether the biotech can handle more competition for low-dose Eylea from lower-cost knockoffs called biosimilars. Regeneron is in litigation with Mylan over an Eylea biosimilar.
REGN Stock: Earnings Due Nov. 2
Regeneron recently said it expects to log a charge of about $100 million on a pretax basis in its third-quarter results that will lower adjusted earnings by about 78 cents. The charge is mainly related to a collaboration with Alnylam Pharmaceuticals involving Alzheimer's disease.
Regeneron sales are steadily rebounding from a sharp drop in 2022. Regeneron's Covid antibody treatment, Regen-Cov, proved ineffective against new versions of coronavirus, so it's no longer in use in the U.S.
Meanwhile, REGN stock has an IBD Relative Strength Rating of 88 out of a best-possible 99, according to IBD Stock Checkup. Its Composite Rating is 87 out of 99.
In addition, Regeneron stock has an Accumulation/Distribution Rating of C-, which indicates modest institutional buying of shares.
Long-Term Initiatives
Bullish REGN stock analysts see possible long-range upside from new product initiatives.
Intellia Therapeutics and Regeneron Pharmaceuticals recently expanded their CRISPR human gene editing partnership. The partnership initially focused on liver diseases. Also, the companies plan to expand their collaboration to CRISPR-based therapies for neurological and muscular diseases.
CRISPR drugs use molecular "scissors" to cut and change DNA.
Some analysts also expect progress in cancer treatment drugs. In 2022, Regeneron acquired exclusive rights to cancer drug Libtayo for $900 million.
Oppenheimer in a report said REGN stock could become a "cancer powerhouse" with a combination of treatments developed internally along with Libtayo.
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