Regeneron Pharmaceuticals, Inc. (REGN Quick QuoteREGN - Free Report) is scheduled to release second-quarter 2021 results on Aug 5, before the opening bell.

The company has an impressive track record. In the last reported quarter, it beat earnings expectations by 12.51%. It surpassed earnings estimates by 14.40%, on average, in the last four quarters.

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 +12.64%, as the Zacks Consensus Estimate is pegged at $19.55 while the Most Accurate Estimate is pegged at $22.03.

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 previous quarter came in at $1.35 billion in the United States. Sales in the quarter under review have most likely witnessed a sequential growth with the normalizing of demand. The Zacks Consensus Estimate for Eylea sales in the United States is pegged at $1.36 billion.

Regeneron has a collaboration agreement with Sanofi (SNY Quick QuoteSNY - Free Report) for some of its other drugs like Dupixent 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.

Dupixent maintained its stellar performance all through on continuous label expansion and the trend is expected to have continued in the to-be-reported quarter. Total sales in the last quarter came in at $1.26 billion.  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 $1.35 billion.

Investors will focus on the performance of PCSK9 inhibitor, Praluent, and Libtayo. Regeneron records net product sales of Libtayo in the United States and Sanofi records net product sales of the drug outside the United States. The parties equally share profits/losses in connection with global sales of Libtayo. Sales of Libtayo came in at $100.8 million in the previous quarter.  Sales have most likely recorded sequential growth in the to-be-reported quarter.

The European Commission (EC) has approved Libtayo for a couple of additional indications. The EC approved Libtayo for the first-line treatment of adults with non-small cell lung cancer (NSCLC) whose tumor cells have ≥50% PD-L1 expression and no EGFR, ALK or ROS1 aberrations. The patients targeted for this indication must have metastatic NSCLC or locally advanced NSCLC and not be a candidate for definitive chemoradiation. Libtayo has also been approved for the treatment of adults with locally advanced or metastatic basal cell carcinoma (BCC) who have progressed on or are intolerant to a hedgehog pathway inhibitor (HHI).

Effective Apr 1, 2020, Regeneron records net product sales of Praluent in the United States.  Sanofi records net product sales of the drug outside the United States and pays Regeneron a royalty on such sales. Total sales in the previous quarter came in at $104.6 million. Praluent sales too have most likely recorded growth on label expansions approved last year.

Apart from these, the company recorded total sales of $438.8 million from REGEN-COV, its antibody cocktail for COVID-19 in the previous quarter. 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 as the pandemic continues to wreak havoc. The FDA recently authorized a lower dose of the cocktail.

Key Recent Developments

The FDA updated the EUA for its investigational COVID-19 antibody cocktail, REGEN-COV. The authorization now includes post-exposure prophylaxis in people at high risk for progression to severe COVID-19, who are not fully vaccinated or are not expected to mount an adequate response to vaccination, and have been exposed to a SARS-CoV-2 infected individual, or who are at high risk of exposure to an infected individual because of infection occurring in the same institutional setting (such as in nursing homes or prisons).

Share Price Performance

Regeneron’s shares have gained 18.9% in the year so far against the industry’s decline of 0.5%.

Image Source: Zacks Investment Research

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 Quick QuoteIRWD - Free Report) has an Earnings ESP of +11.11% and a Zacks Rank #2.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Zoetis (ZTS Quick QuoteZTS - Free Report) has an Earnings ESP of +4.32% and a Zacks Rank #3.