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Regeneron (REGN) Q4 Earnings, Sales Beat on Solid Dupixent Show

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Regeneron Pharmaceuticals, Inc. (REGN - Free Report) reported better-than-expected results for the fourth quarter of 2020, wherein both earnings and sales beat estimates. Evidently, shares are up in pre-market trading following the strong results.

Regeneron’s shares have surged 28% in the past year compared with the industry’s growth of 12.8%.

Regeneron reported fourth-quarter earnings of $9.53 per share, which comfortably beat the Zacks Consensus Estimate of $8.32 and increasing from $7.50 in the year-ago quarter.

Total revenues in the reported quarter increased 30% year over year to $2.42 billion and beat the Zacks Consensus Estimate of $2.39 billion. The year-over-year growth was driven by strong Dupixent sales.

Quarterly Highlights

Net product sales increased to $1.6 billion in the quarter under review, up from $1.3 billion in the year-ago quarter.  Lead drug Eylea’s sales in the United States were $1.3 billion compared with $1.2 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 $678 million compared with $482 million in the year-earlier quarter. The increase was primarily owing to higher net product sales of Dupixent.

Notably, Regeneron records net product sales of Libtayo in the United States. Sanofi records net product sales of Libtayo outside the country and global net product sales of Dupixent, Kevzara and Zaltrap. Regeneron records its share of profits/losses in connection with sales of Libtayo outside the United States, and global sales of Dupixent and Kevzara within collaboration revenues.

Dupixent’s sales were $1.2 billion, up from $751.5 million in the year-ago quarter.  Libtayo sales came in at $97.3 million, up from $74.7 million in the year-ago quarter.  Kevzara recorded sales of $71.5 million, up from $59.7 million in the year-earlier quarter.

Praluent’s global net sales totaled $100.9 million in the reported quarter, up from $81.4 million in the prior-year quarter.

REGEN-COV, its antibody cocktail for COVID-19, recorded sales of $145.5 million in the quarter.

R&D expenses increased to $675.4 million from $450 million, while SG&A expenses grew to $380.7 million during the quarter from $311.2 million in the year-ago quarter.

2020 Results

Revenues came in at $8.5 billion, up 30% from 2019. Earnings per share came in at $31.47, up from $24.67 in 2019 and beat the Zacks Consensus Estimate of $30.38.

COVID-19 Update

REGEN-COV, a cocktail of two monoclonal antibodies (casirivimab and imdevimab) received an Emergency Use Authorization from the FDA in November 2020 for the treatment of mild-to-moderate COVID-19 in certain patients at high risk of progressing to severe COVID-19 and/or hospitalization. 

In early February 2021, the European Medicines Agency (EMA) announced that it has commenced a rolling review of data for the casirivimab and imdevimab antibody cocktail.

Pipeline and Regulatory Update

In November 2020, the European Commission (EC) extended the marketing authorization of Dupixent in the European Union (EU) to include children 6 to 11 years of age with severe atopic dermatitis who are candidates for systemic therapy.

The FDA accepted the sBLA for Libtayo as monotherapy to treat patients with first-line locally advanced or metastatic non-small cell lung cancer (NSCLC) and granted priority review to the same with a target action date of Feb 28, 2021.  The agency also accepted the sBLA for Libtayo for the treatment of patients with locally advanced or metastatic basal cell carcinoma (BCC) with a target action date of Mar 3, 2021.

Our Take

Regeneron’s fourth-quarter results were impressive as the company beat on both sales and earnings, driven by strong Dupixent growth fueled by continued label expansions.  Eylea too maintained momentum despite the pandemic. Incremental contribution from REGEN-COV also boosted the top line and should propel sales as the pandemic continues. The company’s efforts to expand the label of its approved drugs and concurrently develop the pipeline are impressive.

However, Eylea faces stiff competition from Novartis AG’s (NVS - Free Report) Beovu, which might affect sales going forward.

Regeneron currently carries a Zacks Rank #4 (Sell).

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