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Will Eylea & Dupixent Drive Regeneron's (REGN) Q1 Earnings?

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Regeneron Pharmaceuticals, Inc. (REGN - Free Report) is scheduled to release first-quarter 2021 results on May 6, before the opening bell.

The company has an impressive track record. In the last reported quarter, the company beat earnings expectations by 14.54%. It surpassed earnings estimates by 15.07, 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.

Why a Likely Positive Surprise

Our proven model predicts an earnings beat for Regeneron this season. 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. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.

Earnings ESP: Earnings ESP for Regeneron is +2.54%, as the Zacks Consensus Estimate is pegged at $8.79 while the Most Accurate Estimate is pegged at $9.02.

Zacks Rank: It currently carries a Zacks Rank #3.

Factors to Note

A major chunk of Regeneron’s revenues comes from sales of key drug, Eylea, which is approved for various ophthalmology indications (neovascular age-related macular degeneration, diabetic macular edema and macular edema, among others). Eylea was developed in collaboration with Bayer AG. Regeneron records net product sales of Eylea in the United States, while Bayer records net product sales of the drug outside the country. Regeneron also records its share of profits/losses in connection with sales of Eylea outside the United States.

Eylea sales in the fourth quarter of 2020 came in at $1.34 billion in the United States. Sales in the first quarter have most likely witnessed a sequential growth. The Zacks Consensus Estimate for Eylea sales in the United States is pegged at $1.29 billion.

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 asthma drug Dupixent’s (sales are recorded by Sanofi) performance and label expansion. The drug has been the primary growth driver in the last few quarters. Regeneron records its share of profits/losses in connection with global sales of Dupixent and Kevzara within collaboration revenues.

Dupixent maintained its strong performance all through, on continuous label expansion and the trend is expected to have continued in the to-be-reported 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 $1.2 billion.

In November 2020, the European Commission (EC) extended the marketing authorization for Dupixent in the EU to include children 6 to 11 years of age with severe atopic dermatitis who are candidates for systemic therapy. The incremental sales from this label expansion and the uptake of previous label expansions have most likely led to growth in sales of the drug in the to-be-reported quarter.

Investors will focus on the performance of PCSK9 inhibitor, Praluent, and Libtayo. Sales of Libtayo came in at $74.1 million in the United States in the previous quarter. Regeneron records net product sales of Libtayo in the United States and its share of profits/losses in connection with sales of the drug outside the country. Sales have most likely recorded sequential growth in the to-be-reported quarter. Praluent sales too have most likely recorded growth on label expansions approved last year.

Apart from these, the company recorded sales of $145.5 million from REGEN-COV, its antibody cocktail for COVID-19. REGEN-COV is a cocktail of two monoclonal antibodies (casirivimab and imdevimab, also known as REGN10933 and REGN10987, respectively) and was designed specifically to block the infectivity of SARS-CoV-2, the virus that causes COVID-19. REGEN-COV received an Emergency Use Authorization from the FDA in November 2020 for the treatment of mild-to-moderate COVID-19 in adult and pediatric patients. Sales are most likely to have recorded sequential growth in the to-be-reported quarter following this authorization, as the pandemic continues to wreak havoc.

Key Recent Developments

In February 2021, Regeneron and Sanofi announced that the FDA has approved Libtayo for the first-line treatment of patients with advanced non-small-cell lung cancer (NSCLC). The FDA also approved Libtayo as the first immunotherapy treatment indicated for patients with advanced basal cell carcinoma (BCC) previously treated with a hedgehog pathway inhibitor (HHI) or for whom an HHI is not appropriate.

The FDA approved Evkeeza (evinacumab-dgnb) as an adjunct to other low-density lipoprotein cholesterol (LDL-C) lowering therapies to treat adult and pediatric patients aged 12 years and older with homozygous familial hypercholesterolemia (HoFH).

The company announced that its phase III outcomes trial on REGEN-COV in high-risk non-hospitalized COVID-19 patients was successful. It announced positive data from a late-stage study (2069B) evaluating REGEN-COV 1,200 mg administered via subcutaneous administration in recently infected asymptomatic COVID-19 patients. The cocktail reduced the overall risk of progressing to symptomatic COVID-19 by 31% (primary endpoint) and by 76% after the third day. Regeneron also announced that the phase III study (2069A) evaluating the ability of REGEN-COV to reduce the risk and burden of COVID-19 infection among household contacts of SARS-CoV-2 infected individuals met the primary and key secondary endpoints.

Share Price Performance

Regeneron’s shares have lost 0.4% in the year so far compared with the industry’s decline of 3.4%.


Other Stocks to Consider

Here are some other drug/biotech stocks you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season.

Ironwood Pharmaceuticals (IRWD - Free Report) has an Earnings ESP of +0.25% and a Zacks Rank #1.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Incyte (INCY - Free Report) has an Earnings ESP of +8.48% and a Zacks Rank #3.

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