Regeneron stock toppled Monday after a West Virginia judge unexpectedly rejected a preliminary injunction that would have prevented Amgen from launching a biosimilar copycat of eye drug Eylea.
The move means Amgen could launch its knockoff of the eye disease treatment at risk while the companies are battling it out in court, RBC Capital Markets analyst Brian Abrahams said in a client note. The Food and Drug Administration signed off on Amgen's version of Eylea, dubbed Pavblu, last week.
Eylea is one of Regeneron Pharmaceuticals' biggest drugs. In 2023, it brought in $9.38 billion in worldwide sales. Regeneron records U.S. sales and Bayer records international sales.
"It is yet unclear whether Amgen will launch Pavblu at risk, as Amgen would be subject to treble damages" if Regeneron appeals and wins, RBC's Abrahams said. He added that, "We note Amgen has launched their biosimilar products at risk in the past."
Regeneron stock tumbled 4.6%, closing at 1,091.98. Amgen stock also dipped a fraction to 335.61.
Regeneron Stock: Appeal Expected
An Amgen spokesperson said the company is planning to announce its launch timing "in due course."
"We are pleased with the court's decision denying Regeneron's request for a preliminary injunction," she said in an email to Investor's Business Daily. "Our biosimilar product, Pavblu, does not infringe Regeneron's patent."
But Regeneron is planning to appeal the decision from the Northern District Court of West Virginia. A company spokesperson noted the decision only applies to Amgen, not other makers of biosimilar copies of Eylea.
Importantly, the decision only applies to the standard dose of Eylea. Regeneron also sells a high-dose version of Eylea. This version requires less frequent dosing. Eylea HD sales are small, but ramping. Last year, the high-dose version brought in $165.8 million in sales.
"Regeneron has invested many years of effort into its design and development of Eylea," the company said in a written statement. "This work has resulted in numerous patents, reflecting our important research and innovation. We continue to believe that Amgen is infringing our patent rights, and today's decision denying our request for a preliminary injunction is not the final word in this litigation."
IRA Will Play A Role
RBC's Abrahams says the court battle could have important implications for Eylea when it comes to Medicare negotiations. Under the Inflation Reduction Act, the Centers for Medicare and Medicaid Services are already negotiating the prices of a handful of high-cost drugs. Eylea, if it isn't facing lower-cost biosimilars, could soon be targeted for a lower, negotiated price.
"The appeals decision is unlikely to come before early 2026 — a timeline at which we believe biosimilars will need to be on the market for both Eylea and Eylea HD to avoid IRA pricing negotiation," he said.
He sees the news as "incrementally negative to Regeneron's story," but kept his outperform rating on Regeneron stock.
"The Eylea franchise has not been core to our bullish thesis — we already assume biosimilar (Eylea) launch in early 2026 at the latest and meaningful erosion to Eylea/Eylea HD in out-year sales," he said. He estimates U.S. sales stabilizing at about $3.8 billion annually in later years.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
