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Regeneron Pharmaceuticals, Inc. (REGN - Free Report) reported second-quarter 2016 earnings (including share-based compensation expenses and tax adjustments) of $2.10 per share, significantly ahead of the Zacks Consensus Estimate of $1.73. Earnings were also up from $1.66 per share earned in the year-ago quarter.
Excluding share-based compensation expenses, the company’s earnings were up 24.2% to $2.82 per share.
Total revenue in the reported quarter soared 21% year over year to $1.21 billion driven by strong sales of the eye drug, Eylea, as well as higher collaboration revenues that the company receives on Eylea and Praluent.
We note that Regeneron has co-developed Eylea with the HealthCare unit of Bayer AG (BAYRY - Free Report) . Regeneron is solely responsible for the U.S. sales of the eye drug and is entitled to the entire U.S. profits. However, it shares profits and losses equally with Bayer from ex-U.S. Eylea sales, except Japan, where Regeneron receives a royalty on net sales.
Praluent has been co-developed in collaboration with Sanofi (SNY - Free Report) . Product sales for Praluent are recorded by Sanofi, and Regeneron shares in the profits or losses from the commercialization of the drug.
Revenues were slightly below the Zacks Consensus Estimate of $1.25 billion. Total revenues consist mainly of net product sales and collaboration revenues.
Eylea Continues to Impress
Net product sales increased to $834 million in the quarter from $658 million a year ago. The majority of sales came from Eylea in the U.S. ($831 million, up 27%). Sales of Eylea in ex-U.S. markets were $486 million compared with $338 million in the second quarter of 2015.
Collaboration revenues came in at $355 million in the quarter, compared with $329 million a year ago. Collaboration revenues in the second quarter of 2016 increased primarily due to an increase in net profit from commercialization of Eylea in ex-U.S. markets and reimbursement of the company's research and development expenses (R&D) and amortization of upfront that the company received under the Jul 2015 immuno-oncology collaboration with Sanofi. This was partly offset by lower reimbursement of the company's R&D expenses and an increase in the company's share of losses primarily from the commercialization of Praluent under the antibody collaboration with Sanofi.
Praluent recorded global net sales of $24 million in the reported quarter.
Meanwhile, both R&D and selling, general and administrative (SG&A) expenses increased during the reported quarter.
We note that Regeneron is developing 14 human monoclonal antibodies utilizing its VelocImmune technology. The company is developing four of the antibodies in partnership with Sanofi.
2016 Eylea Outlook Maintained
Regeneron reiterated Eylea U.S. net sales guidance for 2016. The company continues to expect U.S. Eylea net sales to grow 20–25% year over year.
However, the company now expects adjusted unreimbursed R&D expenses in the range of $970 million to $1.01 billion (old guidance: $875 million to $950 million). Adjusted SG&A costs are now projected in the range of $980 million to $1.02 billion (old guidance: $925 million to $1 billion).
Regeneron’s second-quarter results were better than expected with the company significantly beating on earnings though revenues marginally fell short of expectations. However, revenues increased year over year. This was largely due to the outperformance of Eylea. Meanwhile, Regeneron continues to progress with its pipeline. We expect investor focus to remain on the performance of Eylea as well as Praluent.
Regeneron is a Zack Rank #3 (Hold) stock. ANI Pharmaceuticals, Inc. (ANIP - Free Report) is a better-ranked stock in the health care sector, sporting a Zacks Rank #1 (Strong Buy).
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Regeneron (REGN) Tops Q2 Earnings, Keeps '16 Eylea View
Regeneron Pharmaceuticals, Inc. (REGN - Free Report) reported second-quarter 2016 earnings (including share-based compensation expenses and tax adjustments) of $2.10 per share, significantly ahead of the Zacks Consensus Estimate of $1.73. Earnings were also up from $1.66 per share earned in the year-ago quarter.
Excluding share-based compensation expenses, the company’s earnings were up 24.2% to $2.82 per share.
Total revenue in the reported quarter soared 21% year over year to $1.21 billion driven by strong sales of the eye drug, Eylea, as well as higher collaboration revenues that the company receives on Eylea and Praluent.
We note that Regeneron has co-developed Eylea with the HealthCare unit of Bayer AG (BAYRY - Free Report) . Regeneron is solely responsible for the U.S. sales of the eye drug and is entitled to the entire U.S. profits. However, it shares profits and losses equally with Bayer from ex-U.S. Eylea sales, except Japan, where Regeneron receives a royalty on net sales.
Praluent has been co-developed in collaboration with Sanofi (SNY - Free Report) . Product sales for Praluent are recorded by Sanofi, and Regeneron shares in the profits or losses from the commercialization of the drug.
Revenues were slightly below the Zacks Consensus Estimate of $1.25 billion. Total revenues consist mainly of net product sales and collaboration revenues.
Eylea Continues to Impress
Net product sales increased to $834 million in the quarter from $658 million a year ago. The majority of sales came from Eylea in the U.S. ($831 million, up 27%). Sales of Eylea in ex-U.S. markets were $486 million compared with $338 million in the second quarter of 2015.
Collaboration revenues came in at $355 million in the quarter, compared with $329 million a year ago. Collaboration revenues in the second quarter of 2016 increased primarily due to an increase in net profit from commercialization of Eylea in ex-U.S. markets and reimbursement of the company's research and development expenses (R&D) and amortization of upfront that the company received under the Jul 2015 immuno-oncology collaboration with Sanofi. This was partly offset by lower reimbursement of the company's R&D expenses and an increase in the company's share of losses primarily from the commercialization of Praluent under the antibody collaboration with Sanofi.
Praluent recorded global net sales of $24 million in the reported quarter.
Meanwhile, both R&D and selling, general and administrative (SG&A) expenses increased during the reported quarter.
We note that Regeneron is developing 14 human monoclonal antibodies utilizing its VelocImmune technology. The company is developing four of the antibodies in partnership with Sanofi.
2016 Eylea Outlook Maintained
Regeneron reiterated Eylea U.S. net sales guidance for 2016. The company continues to expect U.S. Eylea net sales to grow 20–25% year over year.
However, the company now expects adjusted unreimbursed R&D expenses in the range of $970 million to $1.01 billion (old guidance: $875 million to $950 million). Adjusted SG&A costs are now projected in the range of $980 million to $1.02 billion (old guidance: $925 million to $1 billion).
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Our Take
Regeneron’s second-quarter results were better than expected with the company significantly beating on earnings though revenues marginally fell short of expectations. However, revenues increased year over year. This was largely due to the outperformance of Eylea. Meanwhile, Regeneron continues to progress with its pipeline. We expect investor focus to remain on the performance of Eylea as well as Praluent.
Regeneron is a Zack Rank #3 (Hold) stock. ANI Pharmaceuticals, Inc. (ANIP - Free Report) is a better-ranked stock in the health care sector, sporting a Zacks Rank #1 (Strong Buy).
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