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Regeneron (REGN) Q1 Earnings Beat, COVID Antibody Sales Affected

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Regeneron Pharmaceuticals, Inc. (REGN - Free Report) posted better-than-expected first-quarter 2022 results, beating on both earnings and sales driven by strong growth in Eylea and Dupixent. 

Consequently, share are up in pre-market trading.  Regeneron’s shares have gained 2.4% in the year so far against the industry’s decline of 21.2%.

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Regeneron reported first-quarter earnings of $11.49 per share, comfortably beating the Zacks Consensus Estimate of $9.37. Earnings jumped 16% from the year-ago quarter due to higher sales.

Total revenues in the reported quarter were up 17% year over year to $2.9 billion and beat the Zacks Consensus Estimate of $2.71 billion. Excluding REGEN-COV (a cocktail of two monoclonal antibodies — casirivimab and imdevimab) for COVID-19, sales increased 25%.

Quarterly Highlights

Lead drug Eylea’s sales in the United States were $1.5 billion compared with $1.3 billion in the year-ago quarter. Please note that Regeneron co-developed Eylea with the HealthCare unit of Bayer AG (BAYRY - Free Report) . 

Regeneron records net product sales of Eylea in the United States. Bayer records net product sales of Eylea outside the United States. Regeneron records its share of profits/losses in connection with sales of Eylea outside the United States.

Total revenues also included collaboration revenues of $1.2 billion from Sanofi (SNY - Free Report) , Bayer and Roche (RHHBY - Free Report) , up from $754 million in the year-ago quarter. Sanofi’s collaboration revenues amounted to $415 million, up from $261 million. Bayer’s collaboration revenues came in at $385 million, up from $323 million. Roche’s collaboration revenues came in at $216 million compared with $67 million in the year-ago quarter, in connection with payments from Roche attributable to global gross profits from sales of Ronapreve.

Regeneron earned a $50 million sales-based milestone from Sanofi upon aggregate annual sales of antibodies outside the United States exceeding $2.0 billion on a rolling 12-month basis.

Sanofi records global net product sales of Dupixent and Kevzara. Regeneron records its share of profits/losses in connection with global sales of Dupixent and Kevzara. REGN records net product sales of Libtayo in the United States and Sanofi records the same outside the country. Regeneron records net product sales of Praluent in the United States. Sanofi records net product sales of Praluent outside the United States and pays the company a royalty on such sales.

Dupixent’s sales surged to $1.8 billion from $1.3 billion in the year-ago quarter. Libtayo sales in the United States came in at $124.7 million, up from $100.8 million.  Kevzara recorded sales of $106.4 million, up from $69.1 million.

Praluent’s global net sales totaled $111.4 million in the reported quarter, up from $104.6 million in the prior-year quarter.

REGEN-COV, its antibody cocktail for COVID-19, generated total sales of $635.6 million in the quarter outside of the United States.   In January 2022, the FDA revised the authorizations for a few monoclonal antibody treatments, including Regeneron’s REGEN-COV (casirivimab and imdevimab), as data indicated that these treatments are highly unlikely to be active against the Omicron variant.  Therefore, REGEN-COV is not currently authorized for use in any U.S. states, territories or jurisdictions.

R&D expenses increased to $751.4 million from $673.2 million while SG&A expenses jumped to $389.3 million from $354.8 million in the year-ago quarter.

REGEN-COV Updates

The FDA extended by three months its review of the BLA for REGEN-COV  for the treatment of COVID-19 in non-hospitalized patients and as prophylaxis in certain individuals. The extension is due to ongoing discussions with the regulatory body on pre-exposure prophylactic use, for which Regeneron has submitted additional data from its completed prophylaxis trial that the FDA has accepted for review. The FDA determined these additional data constitute a major amendment to the BLA and set a new target action date of Jul 13, 2022.

Pipeline and Regulatory Update

In April 2022, the European Commission approved Dupixent for the treatment of severe asthma in children aged 6 to 11 years.

The FDA accepted for priority review the sBLA for Dupixent for children aged 6 months to 5 years with moderate-to-severe atopic dermatitis, with a target action date of Jun 9, 2022. A regulatory application was also submitted to the European Union (“EU”). The sBLA for Dupixent for adults and adolescents aged 12 years and older with eosinophilic esophagitis has been accepted with priority review with a target action date of Aug 3, 2022. A regulatory application was also submitted to the EU.

Our Take

Regeneron’s first-quarter results were strong with broad-based growth. Solid demand for Eylea and Dupixent maintained momentum for the company. However, sales from REGEN-COV took a hit due to the regulatory update.

Nevertheless, growth in Eylea and Dupixent through further penetration in existing indications and a promising late-stage pipeline set the momentum for growth. The approval of Libtayo in the lucrative indication of NSCLC should further boost the drug's sales in the upcoming quarters.

Regeneron currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.