Regeneron Pharmaceuticals predicted a faster-than-expected approval timeline for a high dose of its eye drug Eylea on Thursday, and REGN stock jumped.
The Food and Drug Administration previously rejected the high dose of Eylea for patients with wet age-related macular degeneration, diabetic macular edema and diabetic retinopathy. At the time, the agency said it had yet to review the inspection of a third-party manufacturer involved in the process.
Now, Regeneron says it expects to resubmit its application for approval by mid-August and hopes to have an FDA decision in the third quarter, Leerink Partners analyst David Risinger said in a note to clients.
"We believe this timing is faster than many expected as there was speculation of a six-month-plus resubmission timeline when the company announced the (rejection) on June 27," he said. There's a chance, though, that the review period could be extended out to November, he added.
The news comes on the back of a second-quarter earnings beat. On today's stock market, REGN stock bounded 5.4% to 771.45. The move put Regeneron shares above their 200-day moving average for the first time since late June. Regeneron stock is consolidating with a buy point at 837.65, MarketSmith.com shows.
REGN Stock: Earnings, Sales Beat
During the second quarter, Regeneron earned $10.24 per share, minus some items, on $3.16 billion in sales. Earnings ticked up 5% and beat forecasts for $9.88 a share, according to FactSet. Sales rose 11%, coming in above expectations for $3.02 billion.
Regeneron recorded $1.32 billion in collaboration revenue from partnerships with Sanofi and Bayer. Notably, Regeneron partners with Sanofi on Dupixent, which treats several inflammatory conditions.
"Recall, partner Sanofi had previously reported another strong quarter for Dupixent, with worldwide sales nearing $2.8 billion and U.S. sales over $2.1 billion, yielding higher-than-expected $944 million in collaboration revenue for Regeneron, suggesting that the profit margin for Dupixent may be further increasing," RBC Capital Markets analyst Brian Abrahams said in his note to clients.
U.S. sales of Eylea came in at $1.5 billion, down 7.5%. But that beat REGN stock analyst forecasts for $1.48 billion, Piper Sandler analyst Christopher Raymond said in a note. Bayer records Eylea sales abroad. Those sales also beat expectations at $886 million and rose about 2%.
Raymond kept his overweight rating and 850 price target on REGN stock.
Cancer Patient Dies In Study
Bearishly, one of Regeneron's high-profile cancer treatment programs hit a setback, said Abrahams, the RBC analyst. Regeneron is testing a combination of its cancer drug Libtayo with an experimental drug called REGN5678.
So far, there have been two patient deaths in the study, including a newly reported death in July. The patients experienced immune system side effects. Regeneron is now planning to test a lower dose of Libtayo in the study.
"We believe this further highlights the potential challenges threading the needle on therapeutic window for co-stimulatory bispecific regimens, one of the company's core oncology strategies," Abrahams said in his note.
Abrahams has a sector perform rating and 818 price target on REGN stock.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
