Regeneron Pharmaceuticals, Inc. REGN reported better-than-expected third-quarter results despite lower sales from its lead drug, Eylea. Revenues climbed 11% to $3.72 billion, driven by growth in Eylea HD sales, profits from blockbuster asthma drug Dupixent and oncology drug Libtayo. The top line beat the Zacks Consensus Estimate of $3.67 billion.
Higher revenues drove the bottom line as well. Adjusted earnings per share (EPS) of $12.46 beat the Zacks Consensus Estimate of $11.75 and were up 8% from the year-ago quarter’s level.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
REGN Reports Strong Eylea HD Uptake
Eylea HD generated $392 million from U.S. market sales in the third quarter and continues to outperform recent launches in the anti-VEGF category. Total combined product sales for Eylea HD and Eylea in the United States were $1.54 billion, up 3% year over year. The figure, however, missed the Zacks Consensus Estimate of $1.58 billion.
In August 2023, the FDA approved Eylea HD (higher dose of Eylea) for the treatment of patients with wet age-related macular degeneration, diabetic macular edema (DME) and diabetic retinopathy.
However, on a standalone basis, Eylea sales declined 21% to $1.15 billion due to increased competition resulting in lower volumes and a reduced net selling price.
Eylea HD has witnessed a strong uptake maintaining momentum for REGN as patients transition from Eylea. The company is now focused on bringing a pre-filled syringe of Eylea HD to the U.S. market. A tentative launch is targeted for early 2025.
Regeneron shares have risen 5.1% year to date against the industry’s decline of 3.3%.
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REGN’s Dupixent Marches Ahead
Collaboration revenues from partner Sanofi SNY increased 19% to $1.26 billion, driven by profits associated with higher Dupixent sales. Sanofi records global net product sales of Dupixent and Kevzara, while Regeneron records its share of profits/losses in connection with the global sales of both drugs.
Dupixent’s sales increased 23% year over year to $3.82 billion, reflecting strong growth across all approved indications (atopic dermatitis, asthma and nasal polyps), age groups and geographies. Dupixent was approved for its sixth indication — chronic obstructive pulmonary disease — in Europe in July and in the United States in September 2024, which should boost sales further in future quarters.
During the reported quarter, the FDA also approved Dupixent as an add-on maintenance treatment for adolescents aged 12-17 years with inadequately controlled chronic rhinosinusitis with nasal polyposis. Regeneron/Sanofi also received a positive opinion from the advisory committee to the regulatory body in the EU, recommending the label expansion of Dupixent to treat children aged 1 to 11 years with eosinophilic esophagitis. A final decision is anticipated soon.
REGN’s Libtayo Continues to Gain Traction
Total Libtayo sales came in at $289 million, up 24% year over year. The figure missed the Zacks Consensus Estimate of $307.9 million. Libtayo is witnessing growth in demand for the indication of skin cancer while making impressive inroads in non-small cell lung cancer (NSCLC) indication. Regeneron pays Sanofi a royalty on the global net product sales of Libtayo.
REGN’s Cost & Margin Analysis
Adjusted R&D expenses jumped 20% year over year to $1.15 billion due to the advancement of Regenron’s late-stage oncology programs and higher headcount and headcount-related costs. Adjusted SG&A expenses increased 15% to $613.1 million due to higher commercialization-related expenses to support the launch of Eylea HD and higher headcount and headcount-related costs.
REGN’s 2024 Guidance Updated
Regeneron streamlined its adjusted operating expenses guidance for 2024. Adjusted R&D expenses are now expected in the range of $4.525-$4.575 billion, narrower than the previously guided range of $4.5-$4.6 billion.
The company anticipates adjusted SG&A expenses to be in the $2.55-$2.6 billion band, narrower than the previous guidance of $2.55-$2.65 billion.
REGN’s Pipeline Progress
In September 2024, Regeneron and Sanofi announced positive results from a late-stage study for an investigational treatment with Dupixent in patients with uncontrolled, biologic-naïve chronic spontaneous urticaria who are on background antihistamine therapy. The study met its primary and key secondary endpoints, with Dupixent treatment achieving nearly a 50% reduction in itch and urticaria activity scores from baseline. The data from the study validated previous findings from an earlier phase III study and supported the recent resubmission of a supplemental biologics license application (BLA) to the FDA.
Additionally, REGN and SNY reported successful phase III study results for Dupixent in treating moderate-to-severe bullous pemphigoid, a rare skin condition. Per the data readout, five times more patients treated with Dupixent achieved sustained disease remission than those on placebo. These findings are expected to support global regulatory submissions, with a U.S. submission planned for the fourth quarter of 2024.
In August 2024, Regeneron received approval for Ordspono(odronextamab) in the EU to treat adult patients with relapsed or refractory (R/R) follicular lymphoma or R/R diffuse large B-cell lymphoma, after two or more lines of systemic therapy.
The company also reported that it has initiated a mid-stage study for Libtayo in neoadjuvant NSCLC.
The BLA for linvoseltamab was earlier accepted for Priority Review for the treatment of R/R multiple myeloma by the FDA with a target action date of Aug. 22, 2024. However, the FDA issued a complete response letter to REGN in August due to issues identified from a pre-approval inspection at a third-party fill/finish manufacturer. Consequently, a reinspection will be required to resolve this issue before pursuing approval in both the United States and the EU.
REGN’s Zacks Rank & Stocks to Consider
Regeneron currently carries a Zacks Rank #3 (Hold).
Some better-ranked pharma stocks are Bayer BAYRY and Novartis NVS, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Estimates for Bayer’s 2024 EPS have increased from $1.37 to $1.38 over the past 60 days, while the same for 2025 have remained constant at $1.44. BAYRY’s shares have lost 26.2% year to date.
Novartis’ EPS estimates have risen from $7.48 to $7.56 per share for 2024 over the past 60 days, while that for 2025 has increased from $8.29 to $8.34. NVS’ shares have risen 8.8% year to date.
Novartis’ earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 2.22%.
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