Categories Analysis, Health Care

Eylea recovery, COVID antibody cocktail make Regeneron an attractive bet

In the fourth quarter, double-digit revenue growth translated into a 27% increase in adjusted earnings that also topped expectations

After last year’s mixed performance, Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) looks to take advantage of the robust pipeline and the success of its antibody cocktail for COVID-19. Also, eye drug Eylea is currently on the recovery path, ending the slowdown caused by competition and the pandemic. Another growth driver is immunology drug Dupixent that witnessed double-digit sales growth consistently in recent quarters.

After retreating from their peak in the middle of last year, shares of the New York-based biopharmaceutical company stabilized in the second half and entered 2021 on a high note, despite high volatility. The vaccine-driven sentiment will continue to power the stock, which is expected to grow by more than a third this year. Though the price is high, REGN looks poised to boost shareholder value in the coming months, as it did earlier. Market watchers recommend strong buy.

COVID-19 Antibody

Positive results from the company’s advanced-stage COVID antibody treatment, which was followed by Emergency Use Authorization by the FDA for mild-to-moderate COVID-19 in high-risk patients, shows it would play an important role in care activities and in saving many lives in the country this year, while also reducing new infections. Though the COVID antibody cocktail is doing well, sales fell short of expectations last year.

Recently, the management restructured an agreement with Sanofi for cholesterol drug Praluent, thereby achieving profitability for the brand in the local market. Evkeeza, which is indicated for homozygous familial hypercholesterolemia, is expected to obtain approval next week and that will add to Regeneron’s cardiometabolic expertise.

Pipeline Power

The market’s bullish outlook also reflects the company’s robust pipeline of about 30 drug candidates in various stages of clinical development, including popular oncology drug Libtayo which is investigated for new indications. That will give a further boost to the diversified revenue and earnings streams. More importantly, Libtayo has emerged as the leading immunotherapy for non-melanoma skin cancers and it could be a potentially major new player in the lung cancer space once cleared for that.


Three companies that are likely to see a slowdown post-pandemic


“We are encouraged by the progress we are making against COVID-19 and expect several near-term data readouts for our antibody cocktail that George will outline momentarily. Importantly, our pipeline continues to grow and advance across a wide variety of diseases. Our core business momentum, new launches, and R&D advances position Regeneron to deliver significant and sustained growth for years to come,” said Regeneron’s CEO Leonard Schleifer during his interaction with analysts at the post-earnings conference call.

Blockbuster Q4

In the fourth quarter, double-digit revenue growth translated into a 27% increase in adjusted earnings to $9.53 per share, with Eylea and Dupixent together accounting for more than 90% of total sales. The numbers also exceeded the market’s prediction. The bottom-line has exceeded expectations regularly for about two years.

Going ahead, one of the key priorities would be effective capital allocation, with focus on aggressive R&D investment in the current fiscal year and beyond.


Read management/analysts’ comments on Regeneron’s Q4 earnings


Regeneron’s stock traded slightly above the $500-mark in early trading on Monday, which is about 4% above the levels seen at the beginning of the year. However, the stock is down 18% since mid-2020 when it climbed to an all-time high. The shares outperformed the market so far this year.

Looking for more insights?

Read the full conference call transcript here. It’s free!

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