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Regeneron (REGN), U.S. Government Ink Deal for COVID-19 Treatment

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Regeneron Pharmaceuticals, Inc. (REGN - Free Report) announced that the U.S. Department of Health and Human Services (HHS) and the Department of Defense (DOD) will purchase additional 1.25 million doses (an agreement value of up to $2.625 billion) of its COVID-19 antibody cocktail. This would bring the U.S. supply of the cocktail, consisting of casirivimab and imdevimab antibodies, to more than 1.5 million doses. Under the new agreement, the government will purchase all finished doses of the cocktail delivered by Jun 30. 

Shares of the company rose 30.5% in the past year compared with the industry’s growth of 8.9%.

We note that casirivimab and imdevimabform a cocktail of two monoclonal antibodies (also known as REGN10933 and REGN10987, respectively), which was designed specifically to block the infectivity of SARS-CoV-2, the virus that causes COVID-19.

Regeneron is already supplying doses to treat approximately 300,000 people, with President Donald Trump receiving the treatment when he got infected with COVID-19 last year. In November 2020, the combination received Emergency Use Authorization (EUA) from the FDA for the treatment of mild-to-moderate COVID-19 in adults as well as pediatric patients at least 12 years of age and weighing at least 40 kg, who have received positive results of direct SARS-CoV-2 viral testing and are at high risk for progressing to severe COVID-19 and/or hospitalization.

Per the agreement, the government will acquire doses at the lowest authorized dose. The current authorized dose for emergency use in non-hospitalized patients is 2,400 mg (1,200 mg casirivimab and 1,200 mg imdevimab) administered as a one-time infusion. Regeneron is evaluating the safety and efficacy of a lower 1,200 mg dose (600 mg casirivimab and 600 mg imdevimab) of the antibody cocktail in this 'outpatient' setting. Per the company, patients who received the cocktail in clinical trials experienced significant reductions in virus levels and required fewer medical visits for COVID-19, suggesting that the therapy can help reduce the current burden on hospitals and healthcare systems.

The government is obligated to purchase all finished doses supplied by Jun 30, which is up to 1.25 million doses in total, and might accept doses after this date at its discretion. The company expects to supply about 750,000 finished doses by the end of June, based on the 2,400 mg dose level, with the vast majority supplied in the second quarter. Regeneron expects to fulfill the entire 1.25 million targeted doses, if the 1,200 mg dose is authorized.

Regeneron is collaborating with Roche AG (RHHBY - Free Report) to increase the global supply of casirivimab and imdevimab. Regeneron is responsible for the development and distribution of the treatment in the United States and Roche is primarily responsible for the development and distribution outside the nation.  

Zacks Rank & Stocks to Consider

Regeneron currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the healthcare sector include Alkermes Plc. (ALKS - Free Report) and Halozyme Therapeutics Inc. (HALO - Free Report) . While Alkermes carries a Zacks Rank #1 (Strong Buy), Halozyme carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Alkermes’ earnings per share estimates have increased from 48 cents to 52 cents for 2021 over the past 60 days. Shares of the company have increased 12.9% in the past year.

Halozyme’s earnings per share estimates have increased from 85 cents to 92 cents for 2020 and from $1.68 to $1.72 for 2021 over the past 60 days.

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