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Regeneron Pharmaceuticals, Inc. (REGN - Free Report) reported better-than-expected results for the first quarter of 2020, wherein both earnings and sales beat estimates.
Shares are up in pre-market trading on strong results. Shares of Regeneron have gained 44.3% in the year so far compared with the industry’s growth of 1.7%.
The company reported earnings of $6.60 per share in the first quarter, comfortably beating the Zacks Consensus Estimate of $5.73 and increasing from $4.45 in the year-ago quarter.
Total revenues in the reported quarter jumped 33% year over year to $1.8 billion and comfortably beat the Zacks Consensus Estimate of $1.7 billion. However, revenues were down sequentially from $2.2 billion. The year-over-year growth was driven by strong Eylea and Dupixent sales.
Quarterly Highlights
Net product sales increased to $1.2 billion in the quarter, up from $1.1 billion in the year-ago quarter. Majority of sales in the United States came from Eylea ($1.17 billion, up from $1.07 billion in the year-ago quarter).
We note that Regeneron co-developed Eylea with the HealthCare unit of Bayer AG (BAYRY - Free Report) . The company is solely responsible for sales of this eye drug and entitled to profits in the United States. However, it shares profits and losses from the ex-U.S. Eylea sales equally with Bayer, except in Japan where the company receives a royalty on net sales.
Total revenues also included Sanofi (SNY - Free Report) and Bayer’s collaboration revenues of $528 million compared with $246 million in the year-earlier quarter. The increase was primarily owing to higher net product sales of Dupixent.
We note that sale proceeds from drugs like Praluent, Dupixent and Kevzara are garnered by Sanofi, while Regeneron earns profits or incurs losses from the commercialization of the drugs.
Dupixent’s sales summed $855.2 million, up from $373.7 million in the year-ago quarter and $751.5 million in the previous quarter. Kevzara recorded sales of $60.1 million, up from $33.7 million in the year-earlier quarter.
Praluent’s global net sales totaled $79.8 million in the reported quarter, up from $63.9 million in the prior-year quarter.
Libtayo sales in the quarter totaled $74.8 million, up from $26.8 million in the prior-year quarter.
R&D expenses increased to $527.2 million from $427.4 million, while SG&A expenses increased to $5306.8 million during the quarter from $242.3 million in the year-ago quarter.
Update on Sanofi Agreement
Regeneron and partner Sanofi restructured their antibody collaboration for Praluent. In the United States, Regeneron will be solely responsible for the development and commercialization of Praluent and record net product sales. Sanofi will have sole responsibility for the development and commercialization of the drug outside the United States and pay Regeneron a 5% royalty on net product sales.
The agreement related to Kevzara is pending in light of the recently-launched clinical programs evaluating Kevzara in patients hospitalized with COVID-19.
COVID-19 Update
Regeneron is advancing REGN-COV2, a novel investigational antibody "cocktail" treatment designed to prevent and treat the SARS-CoV-2 virus. In April, Regeneron moved its leading neutralizing antibodies into pre-clinical and clinical-scale cell production lines and plans to begin clinical studies in June 2020.
Regeneron and Sanofi are also evaluating Kevzara for COVID-19. In April 2020, Regeneron provided an update on the adaptively-designed phase II/III U.S. study evaluating Kevzara in patients hospitalized with COVID-19 infection. An Independent Data Monitoring Committee recommended continuing the ongoing phase III trial only in the more advanced "critical" group with the 400 mg dose of Kevzara and discontinuing the study in the less advanced "severe" group, based on initial phase II results.
Pipeline Update
In February 2020, Regeneron announced positive two-year results from the phase III PANORAMA study evaluating Eylea in patients with moderately severe to severe non-proliferative diabetic retinopathy (NPDR), wherein Eylea reduced the likelihood of developing vision-threatening events by at least 75% in patients with NPDR.
The FDA accepted for priority review the supplemental Biologics License Application (sBLA) for Dupixent for the indication of moderate-to-severe atopic dermatitis in children aged 6 to 11 years, with a target action date of May 26, 2020. In addition, a Marketing Authorization Application (MAA) for the same indication has also been submitted in the European Union (EU).
The primary endpoint was met in the phase III study of Libtayo as monotherapy in first-line non-small cell lung cancer (NSCLC). The Independent Data Monitoring Committee recommended stopping the study early due to highly significant improvement in overall survival. The data from the study will form the basis of regulatory submissions in the United States and the EU in the second half of 2020.
Our Take
Regeneron’s first-quarter results were impressive as it beat on both sales and earnings, driven by the label expansion of Eylea, and strong Dupixent and Libtayo sales. The company’s efforts to expand the label of its approved drugs and concurrently develop the pipeline are encouraging. The company plans to file regulatory submissions for Libtayo in both NSCLC and basal cell carcinoma, based on recent promising late-stage results.
The company’s efforts to develop REGN-COV2 are encouraging as well and a positive outcome should drive further growth.
While the first quarter was not materially impacted by the coronavirus pandemic, the overall demand for Eylea in the United States was lower on a year-over-year basis in the month of April. Moreover, the drug is likely to face stiff competition from Novartis AG’s (NVS - Free Report) recently-approved Beovu.
Regeneron Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
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Image: Bigstock
Regeneron's (REGN) Q1 Earnings & Sales Surpass Estimates
Regeneron Pharmaceuticals, Inc. (REGN - Free Report) reported better-than-expected results for the first quarter of 2020, wherein both earnings and sales beat estimates.
Shares are up in pre-market trading on strong results. Shares of Regeneron have gained 44.3% in the year so far compared with the industry’s growth of 1.7%.
The company reported earnings of $6.60 per share in the first quarter, comfortably beating the Zacks Consensus Estimate of $5.73 and increasing from $4.45 in the year-ago quarter.
Total revenues in the reported quarter jumped 33% year over year to $1.8 billion and comfortably beat the Zacks Consensus Estimate of $1.7 billion. However, revenues were down sequentially from $2.2 billion. The year-over-year growth was driven by strong Eylea and Dupixent sales.
Quarterly Highlights
Net product sales increased to $1.2 billion in the quarter, up from $1.1 billion in the year-ago quarter. Majority of sales in the United States came from Eylea ($1.17 billion, up from $1.07 billion in the year-ago quarter).
We note that Regeneron co-developed Eylea with the HealthCare unit of Bayer AG (BAYRY - Free Report) . The company is solely responsible for sales of this eye drug and entitled to profits in the United States. However, it shares profits and losses from the ex-U.S. Eylea sales equally with Bayer, except in Japan where the company receives a royalty on net sales.
Total revenues also included Sanofi (SNY - Free Report) and Bayer’s collaboration revenues of $528 million compared with $246 million in the year-earlier quarter. The increase was primarily owing to higher net product sales of Dupixent.
We note that sale proceeds from drugs like Praluent, Dupixent and Kevzara are garnered by Sanofi, while Regeneron earns profits or incurs losses from the commercialization of the drugs.
Dupixent’s sales summed $855.2 million, up from $373.7 million in the year-ago quarter and $751.5 million in the previous quarter. Kevzara recorded sales of $60.1 million, up from $33.7 million in the year-earlier quarter.
Praluent’s global net sales totaled $79.8 million in the reported quarter, up from $63.9 million in the prior-year quarter.
Libtayo sales in the quarter totaled $74.8 million, up from $26.8 million in the prior-year quarter.
R&D expenses increased to $527.2 million from $427.4 million, while SG&A expenses increased to $5306.8 million during the quarter from $242.3 million in the year-ago quarter.
Update on Sanofi Agreement
Regeneron and partner Sanofi restructured their antibody collaboration for Praluent. In the United States, Regeneron will be solely responsible for the development and commercialization of Praluent and record net product sales. Sanofi will have sole responsibility for the development and commercialization of the drug outside the United States and pay Regeneron a 5% royalty on net product sales.
The agreement related to Kevzara is pending in light of the recently-launched clinical programs evaluating Kevzara in patients hospitalized with COVID-19.
COVID-19 Update
Regeneron is advancing REGN-COV2, a novel investigational antibody "cocktail" treatment designed to prevent and treat the SARS-CoV-2 virus. In April, Regeneron moved its leading neutralizing antibodies into pre-clinical and clinical-scale cell production lines and plans to begin clinical studies in June 2020.
Regeneron and Sanofi are also evaluating Kevzara for COVID-19. In April 2020, Regeneron provided an update on the adaptively-designed phase II/III U.S. study evaluating Kevzara in patients hospitalized with COVID-19 infection. An Independent Data Monitoring Committee recommended continuing the ongoing phase III trial only in the more advanced "critical" group with the 400 mg dose of Kevzara and discontinuing the study in the less advanced "severe" group, based on initial phase II results.
Pipeline Update
In February 2020, Regeneron announced positive two-year results from the phase III PANORAMA study evaluating Eylea in patients with moderately severe to severe non-proliferative diabetic retinopathy (NPDR), wherein Eylea reduced the likelihood of developing vision-threatening events by at least 75% in patients with NPDR.
The FDA accepted for priority review the supplemental Biologics License Application (sBLA) for Dupixent for the indication of moderate-to-severe atopic dermatitis in children aged 6 to 11 years, with a target action date of May 26, 2020. In addition, a Marketing Authorization Application (MAA) for the same indication has also been submitted in the European Union (EU).
The primary endpoint was met in the phase III study of Libtayo as monotherapy in first-line non-small cell lung cancer (NSCLC). The Independent Data Monitoring Committee recommended stopping the study early due to highly significant improvement in overall survival. The data from the study will form the basis of regulatory submissions in the United States and the EU in the second half of 2020.
Our Take
Regeneron’s first-quarter results were impressive as it beat on both sales and earnings, driven by the label expansion of Eylea, and strong Dupixent and Libtayo sales. The company’s efforts to expand the label of its approved drugs and concurrently develop the pipeline are encouraging. The company plans to file regulatory submissions for Libtayo in both NSCLC and basal cell carcinoma, based on recent promising late-stage results.
The company’s efforts to develop REGN-COV2 are encouraging as well and a positive outcome should drive further growth.
While the first quarter was not materially impacted by the coronavirus pandemic, the overall demand for Eylea in the United States was lower on a year-over-year basis in the month of April. Moreover, the drug is likely to face stiff competition from Novartis AG’s (NVS - Free Report) recently-approved Beovu.
Regeneron Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Regeneron Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Regeneron Pharmaceuticals, Inc. Quote
Regeneron currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>