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Regeneron (REGN) Down 1.4% Since Last Earnings Report: Can It Rebound?

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A month has gone by since the last earnings report for Regeneron (REGN - Free Report) . Shares have lost about 1.4% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Regeneron due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Regeneron Q1 Earnings Beat, COVID Antibody Sales Affected

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.

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, Bayer and Roche, 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.

 

How Have Estimates Been Moving Since Then?

It turns out, estimates revision flatlined during the past month.

The consensus estimate has shifted 7.37% due to these changes.

VGM Scores

Currently, Regeneron has a great Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Regeneron has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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