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The Zacks Analyst Blog Highlights: Regeneron Pharmaceuticals, Bayer, Boston Scientific, Medtronic and Edwards Lifesciences

REGN BAYRY BSX MDT EW

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For Immediate Release

Chicago, IL – September 25, 2012 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Regeneron Pharmaceuticals, Inc. (REGN - Analyst Report), Bayer (BAYRY - Analyst Report), Boston Scientific (BSX - Analyst Report), Medtronic (MDT - Analyst Report) and Edwards Lifesciences (EW - Analyst Report).

 

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Here are highlights from Monday’s Analyst Blog:

 

Regeneron Pharma on a High

 

Good news flowed in at Regeneron Pharmaceuticals, Inc. (REGN - Analyst Report) from both the US and Europe regarding its eye drug Eylea (aflibercept). While the US Food and Drug Administration (FDA) cleared Eylea for treating patients suffering from macular edema following central retinal vein occlusion (CRVO), the European Committee for Medicinal Products for Human Use (CHMP) backed its approval for the treatment of the neovascular form of age-related macular degeneration (wet AMD) in the EU. A final decision from the European Commission (EC) is expected by year end.

We note that Eylea is already marketed in the US for the wet AMD indication since late last year. The drug has performed exceptionally well since its launch. Encouraged by the strong performance of Eylea, the company increased its forecast for 2012 US Eylea sales for the second successive quarter. Management stated on the second quarter 2012 conference call that it expects the eye drug to record 2012 sales in the range of $700-$750 million as opposed to the previously forecasted range of $500-$550 million. Eylea, which is also available in some ex-US markets, is under review in Japan for the indication.

The sales potential of the injectable eye drug has been boosted further by the FDA clearance for an additional indication - macular edema following CRVO. The recommended dosage for Eylea is 2mg on a monthly basis. The approval was based on encouraging 24 week data from two phase III studies, COPERNICUS and GALILEO.  Data from the studies from week 24 to 52 have not yet been reviewed by the US regulatory body. European approval for the CRVO indication will be sought shortly by Regeneron’s partner on Eylea - the HealthCare unit of Bayer (BAYRY - Analyst Report), once the EC clears Eylea for the wet AMD indication in the EU.

Per the agreement, Bayer is responsible for marketing Eylea in ex-US markets on approval. The profit earned from the sales of the drug in those markets will be shared equally by the companies. In Japan, Regeneron will receive royalties on Eylea’s net sales. However, Regeneron owns the entire US rights pertaining to the eye drug.

Our Recommendation

We have an Outperform recommendation on Regeneron driven by the strong performance of Eylea along with its robust pipeline. The stock carries a Zacks #1 Rank (Strong Buy) in the short run.

 

BSX to Acquire BridgePoint Medical

 

Boston Scientific (BSX - Analyst Report), in order to strengthen its interventional cardiology portfolio, has signed a definitive agreement to acquire Minnesota-based BridgePoint Medical. The transaction is expected to close in the fourth quarter of 2012. However, financial details of the deal were not disclosed.  

On successful completion of the deal, Boston Scientific’s portfolio would include a catheter-based system developed by BridgePoint Medical to treat coronary chronic total occlusions (CTOs). The system has received both US Food and Drug Administration (‘FDA’) and CE Mark approvals.

CTO prevents blood circulation to critical areas of the heart. As such, the CTO devices enable treatment in these cases that otherwise would have required the patient to undergo invasive intervention, such as coronary artery bypass surgery.

During the last reported quarter, revenues from Interventional Cardiology (other than coronary stent system) increased 3% at constant currency to $209 million comprising US sales of $78 million and international sales of $131 million.

Following the CE Mark approval of the Emerge PTCA dilatation catheter in the EMEA region in April this year, the company launched the product. The company expects to unveil this product in the US market in the third quarter.  Furthermore, it anticipates introducing additional new products in vascular access, balloon catheters and IVUS during 2012.

Boston Scientific diversified the portfolio of this business with the acquisitions of Atritech and Sadra Medical, both in 2011. The former brought in the Watchman Left Atrial Appendage Closure device which offers an alternative to anticoagulant drugs and is CE Mark approved.  The company is working to get the device approved in the US, possibly in 2013.

On the other hand, with the acquisition of Sadra Medical, Boston Scientific is developing a fully repositionable and retrievable device, Lotus valve system, for transcatheter aortic valve replacement to treat patients with severe aortic stenosis. This business, apart from being immensely promising, is also highly competitive with players such as Medtronic (MDT - Analyst Report) and Edwards Lifesciences (EW - Analyst Report) competing to increase their respective market share in Europe.   

We are impressed with Boston Scientific’s recent acquisitions, which reflect its focus on new therapies to drive top line. This strategy is significant given the poor performance of its core segments of stents and defibrillators.

We have a Neutral recommendation on Boston Scientific. The stock retains a Zacks #3 Rank (“Hold”) in the short term.

 

 

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