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What's in the Cards for Regeneron's (REGN) Q2 Earnings?

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Regeneron Pharmaceuticals, Inc. (REGN - Free Report) is scheduled to release second-quarter 2020 results on Aug 5, before the opening bell.

The company has an impressive track record. In the last reported quarter, the company beat earnings expectations by 15.18%. It surpassed earnings estimates by 10.08%, on average, in the last four quarters.

Regeneron Pharmaceuticals, Inc. Price, Consensus and EPS Surprise


Regeneron Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Regeneron Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Regeneron Pharmaceuticals, Inc. Quote

Let’s see how things are shaping up for the upcoming announcement.

Factors at Play

Regeneron’s key drug, Eylea, which is approved for various ophthalmology indications (neovascular age-related macular degeneration, diabetic macular edema and macular edema, among others), reflected strong growth in the first quarter of 2020 with sales of $1.172 billion. This trend most likely continued in the second quarter. Eylea was developed in collaboration with Bayer AG. The Zacks Consensus Estimate for Eylea sales in the United States is pegged at $1065 million.

Regeneron has a collaboration agreement with Sanofi (SNY - Free Report) for some of its drugs like Dupixent, Praluent and Kevzara.

Apart from Eylea, investors will be focusing on Dupixent’s (sales are recorded by Sanofi) performance and label expansion, which has been the primary growth driver in the last few quarters.

Asthma drug Dupixent’s sales maintained solid momentum in the first quarter of 2020 on continuous label expansion and the trend is expected to have continued in the second quarter. Label expansion of the drug in the last few months has most likely boosted sales, further. The Zacks Consensus Estimate for Dupixent sales is pegged at $957 million.

In May, the FDA approved Dupixent for children aged 6 to 11 years with moderate-to-severe atopic dermatitis, whose disease is not adequately controlled with topical prescription therapies or when those therapies are not advisable. The FDA also approved a 300-mg, single-dose, pre-filled pen for Dupixent. The pre-filled pen is approved for all Dupixent indications in patients aged 12 years and older, which includes use in certain patients with atopic dermatitis, asthma and chronic rhinosinusitis with nasal polyposis (CRSwNP), for at-home administration. The incremental sales from these added indications might have been realized in the to-be-reported quarter.

Investors will also focus on the performance of PCSK9 inhibitor, Praluent, and Libtayo. Sales of Libtayo came in at $74.8 million in the previous quarter. Sales have most likely recorded a sequential growth in the to-be-reported quarter.  Praluent sales have most likely recorded growth on label expansions approved last year.

Key Recent Developments

Apart from top-line numbers, investors will focus on Regeneron's pipeline updates. Results from Part A of the pivotal phase III study, evaluating Dupixent in patients 12 years and older with eosinophilic esophagitis (EoE), showed that the study met both of its co-primary endpoints as well as all key secondary endpoints. An ongoing Part B portion of the phase III study evaluates an additional Dupixent dosing regimen.

COVID-19 Update

As part of Operation Warp Speed, the Biomedical Advanced Research and Development Authority (BARDA), part of the Office of the Assistant Secretary for Preparedness and Response at the U.S. Department of Health and Human Services, and the Department of Defense Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense have awarded Regeneron a $450-million contract to manufacture and supply REGN-COV2. REGN-COV2 is the company’s investigational double-antibody cocktail that is currently in two phase II/III studies for the treatment of COVID-19 and in a phase III study for the prevention of COVID-19 infection.

Share Price Performance

Regeneron’s stock has surged 68.3% year to date compared with the industry’s growth of 5%.


Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Regeneron this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate of $6.07 and the Zacks Consensus Estimate of $6.23, is -2.72%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Regeneron has a Zacks Rank #4 (Sell).

Stocks to Consider

Here are a few stocks you may want to consider, as our model shows that these the right combination of elements to post an earnings beat this season.

Bristol-Myers Squibb (BMY - Free Report) has an Earnings ESP of +0.23% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Incyte (INCY - Free Report) has an Earnings ESP of +4.62% and a Zacks Rank #3.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

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