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Regeneron (REGN) to Report Q2 Earnings: What's in Store?
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Regeneron Pharmaceuticals, Inc. (REGN - Free Report) is scheduled to release second-quarter 2023 results on Aug 3, before the opening bell.
The company has an impressive track record, with an earnings streak in all the past four quarters. In the last reported quarter, it beat earnings expectations by 9.08%. It surpassed earnings estimates by 17.06%, on average, in all the trailing four quarters.
Regeneron Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
A major chunk of Regeneron’s revenues come from the sales of its lead 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.
However, Eylea sales have been under pressure in the last couple of quarters due to competition from Avastin and sale deductions. The second quarter is likely to have seen the same trend. The Zacks Consensus Estimate for Eylea’s sales in the United States is pegged at $1.53 billion.
Apart from Eylea, investors will focus on the asthma drug Dupixent’s performance, sales of which are recorded by Sanofi (SNY - Free Report) . Regeneron has a collaboration agreement with Sanofi for drugs like Dupixent and Kevzara. While Sanofi records sales, Regeneron records its share of profits/losses in connection with global sales of Dupixent and Kevzara. Profits from Dupixent sales have been REGN’s primary growth driver in the last few quarters.
Sales of Dupixent were up 34.2% in the second quarter, as recorded by Sanofi and hence Regeneron is likely to have recorded incremental profits in the yet-to-be-reported quarter.
Dupixent has maintained its stellar performance, driven by continued strong demand in the approved indications, atopic dermatitis (AD), asthma, chronic rhinosinusitis with nasal polyposis (CRSwNP), eosinophilic esophagitis and prurigo nodularis. The label expansion of the drug in the past few months has boosted sales further and is likely to have resulted in incremental revenues for Regeneron in the second quarter.
Investors will focus on the performance of Libtayo and the PCSK9 inhibitor Praluent. Effective Jul 1, 2022, Regeneron records net product sales of Libtayo and pays Sanofi a royalty on such sales. Increased sales of Libtayo on-label expansions have most likely boosted the top line. The Zacks Consensus Estimate for Libtayo’s sales is pegged at $191 million.
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 witnessed a 31% increase and sales in the second quarter are likely to have maintained the momentum.
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. REGEN-COV is a cocktail of two monoclonal antibodies (casirivimab and imdevimab, also known as REGN10933 and REGN10987, respectively). Therefore, REGEN-COV is currently unauthorized for use in U.S. states, territories or jurisdictions. Hence, this revision has dented sales thereafter.
Regeneron and Roche share gross profits from global sales of REGEN-COV and Ronapreve based on a pre-specified formula.
RECENT UPDATES
The FDA issued a complete response letter (CRL) to the company’s biologics license application seeking approval for the 8 mg dose strength of aflibercept for the treatment of patients with wet age-related macular degeneration (wAMD), diabetic macular edema (DME) and diabetic retinopathy (DR).
Regeneron has reported that the cause of the CRL is only an ongoing review of inspection findings at a third-party filler. The company reaffirmed that the CRL was not levied due to issues with the clinical efficacy or safety, trial design and labeling or drug substance manufacturing of aflibercept 8 mg. Furthermore, the company also stated that the FDA had not requested any additional clinical data or studies for the drug candidate.
Additional updates on the same are expected on the call.
Share Price Performance
Regeneron’s shares have gained 3.2% in the year so far against the industry’s decline of 12%.
Image Source: Zacks Investment Research
What Our Model Predicts
Our proven model does not conclusively predict an earnings beat for Regeneron this time around. 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. That is not the case here, as you will see below.
Earnings ESP: Earnings ESP for REGN is +1.19% as the Zacks Consensus Estimate currently stands at $9.91 per share and the Most Accurate Estimate is currently pegged at $10.03 per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Here are some more drug/biotech stocks that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this season.
ACAD topped earnings estimates in two of the last four quarters and missed in the remaining two quarters, with earnings surprise of -2.75%, on average.
Sarepta Therapeutics (SRPT - Free Report) has an Earnings ESP of +8.01% and a Zacks Rank #3.
Sarepta beat earnings estimates in two of the trailing four quarters and missed in the remaining two. It delivered a negative earnings surprise of 63.49%.
Image: Bigstock
Regeneron (REGN) to Report Q2 Earnings: What's in Store?
Regeneron Pharmaceuticals, Inc. (REGN - Free Report) is scheduled to release second-quarter 2023 results on Aug 3, before the opening bell.
The company has an impressive track record, with an earnings streak in all the past four quarters. In the last reported quarter, it beat earnings expectations by 9.08%. It surpassed earnings estimates by 17.06%, on average, in all the trailing four quarters.
Regeneron Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Regeneron Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Regeneron Pharmaceuticals, Inc. Quote
Factors at Play
A major chunk of Regeneron’s revenues come from the sales of its lead 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.
However, Eylea sales have been under pressure in the last couple of quarters due to competition from Avastin and sale deductions. The second quarter is likely to have seen the same trend. The Zacks Consensus Estimate for Eylea’s sales in the United States is pegged at $1.53 billion.
Apart from Eylea, investors will focus on the asthma drug Dupixent’s performance, sales of which are recorded by Sanofi (SNY - Free Report) . Regeneron has a collaboration agreement with Sanofi for drugs like Dupixent and Kevzara. While Sanofi records sales, Regeneron records its share of profits/losses in connection with global sales of Dupixent and Kevzara. Profits from Dupixent sales have been REGN’s primary growth driver in the last few quarters.
Sales of Dupixent were up 34.2% in the second quarter, as recorded by Sanofi and hence Regeneron is likely to have recorded incremental profits in the yet-to-be-reported quarter.
Dupixent has maintained its stellar performance, driven by continued strong demand in the approved indications, atopic dermatitis (AD), asthma, chronic rhinosinusitis with nasal polyposis (CRSwNP), eosinophilic esophagitis and prurigo nodularis. The label expansion of the drug in the past few months has boosted sales further and is likely to have resulted in incremental revenues for Regeneron in the second quarter.
Investors will focus on the performance of Libtayo and the PCSK9 inhibitor Praluent. Effective Jul 1, 2022, Regeneron records net product sales of Libtayo and pays Sanofi a royalty on such sales. Increased sales of Libtayo on-label expansions have most likely boosted the top line. The Zacks Consensus Estimate for Libtayo’s sales is pegged at $191 million.
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 witnessed a 31% increase and sales in the second quarter are likely to have maintained the momentum.
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. REGEN-COV is a cocktail of two monoclonal antibodies (casirivimab and imdevimab, also known as REGN10933 and REGN10987, respectively). Therefore, REGEN-COV is currently unauthorized for use in U.S. states, territories or jurisdictions. Hence, this revision has dented sales thereafter.
Regeneron and Roche share gross profits from global sales of REGEN-COV and Ronapreve based on a pre-specified formula.
RECENT UPDATES
The FDA issued a complete response letter (CRL) to the company’s biologics license application seeking approval for the 8 mg dose strength of aflibercept for the treatment of patients with wet age-related macular degeneration (wAMD), diabetic macular edema (DME) and diabetic retinopathy (DR).
Regeneron has reported that the cause of the CRL is only an ongoing review of inspection findings at a third-party filler. The company reaffirmed that the CRL was not levied due to issues with the clinical efficacy or safety, trial design and labeling or drug substance manufacturing of aflibercept 8 mg. Furthermore, the company also stated that the FDA had not requested any additional clinical data or studies for the drug candidate.
Additional updates on the same are expected on the call.
Share Price Performance
Regeneron’s shares have gained 3.2% in the year so far against the industry’s decline of 12%.
Image Source: Zacks Investment Research
What Our Model Predicts
Our proven model does not conclusively predict an earnings beat for Regeneron this time around. 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. That is not the case here, as you will see below.
Earnings ESP: Earnings ESP for REGN is +1.19% as the Zacks Consensus Estimate currently stands at $9.91 per share and the Most Accurate Estimate is currently pegged at $10.03 per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Here are some more drug/biotech stocks that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this season.
ACADIA Pharmaceuticals (ACAD - Free Report) has an Earnings ESP of +38.26% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
ACAD topped earnings estimates in two of the last four quarters and missed in the remaining two quarters, with earnings surprise of -2.75%, on average.
Sarepta Therapeutics (SRPT - Free Report) has an Earnings ESP of +8.01% and a Zacks Rank #3.
Sarepta beat earnings estimates in two of the trailing four quarters and missed in the remaining two. It delivered a negative earnings surprise of 63.49%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.