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Is a Beat in the Cards for Regeneron (REGN) Q3 Earnings?

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Regeneron Pharmaceuticals, Inc. (REGN - Free Report) is scheduled to release third-quarter 2019 results on Nov 5, before the opening bell.

Regeneron has a decent track record. In the last reported quarter, the company beat earnings expectations by 11.07%. It surpassed earnings estimates by average of 6.14% in the last four quarters.

Let’s see how things are shaping up for the to-be-reported quarter.

Why a Likely Earnings Beat?

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: Regeneron has an Earnings ESP of +4.41% as the Zacks Consensus Estimate is pegged at $6.35 and the Most Accurate Estimate at $6.63.

Zacks Rank: The company has a Zacks Rank #3.

Factors Influencing Q3

Regeneron’s key drug, Eylea, drove performance in the first half of 2019, a trend that most likely continued in the third quarter. Eylea was developed in collaboration with Bayer AG (BAYRY - Free Report) . The drug is approved in the United States, the EU, Japan and other countries for the treatment of neovascular age-related macular degeneration (wet AMD), diabetic macular edema (DME) and macular edema following retinal vein occlusion, which includes macular edema following central retinal vein occlusion and macular edema following branch retinal vein occlusion.

In May, the FDA approved Eylea injection to treat all stages of diabetic retinopathy (DR). Label expansion into additional indications would provide the drug access to a higher patient population and increase its commercial potential. We expect sales to have benefited from the first full quarter for this expanded indication.

In August, the FDA has approved the Chemistry, Manufacturing and Controls (CMC) Prior-Approval Supplement (PAS) for the Eylea injection prefilled syringe. Consequently, the drug became the only anti-VEGF approved to treat four retinal conditions with a single-dose strength prefilled syringe.

Apart from Eylea, investors will be focusing on the uptake of Dupixent and its label expansion.

Asthma drug Dupixent’s sales have been impressive in the first half of 2019 on continuous label expansion and the same is expected to have prevailed in the third quarter. Label expansion of the drug in the last few months has most likely boosted sales. In May, the European Commission approved Dupixent for use in adults and adolescents 12 years and older as an add-on maintenance treatment for severe asthma. In June, the FDA approved the drug for use with other medicines to treat chronic rhinosinusitis with nasal polyposis (CRSwNP) in adults whose disease is not controlled. The European Commission approved another label expansion of Dupixent, extending its approval to include adolescents 12-17 years of age with moderate-to-severe atopic dermatitis, who are candidates for systemic therapy.

Regeneron also has Kevzara in its portfolio. Kevzara, an anti-interleukin (IL)-6 receptor monoclonal antibody used for the treatment of adult patients with moderately- to severely-active rheumatoid arthritis, was approved by the FDA in May 2017.

Investors will also focus on the performance of PCSK9 inhibitor, Praluent, and Libtayo. Sales of Libtayo came in at $40.8 million in the second quarter. In June, the drug got approval in Europe for the treatment of adult patients with metastatic or locally advanced cutaneous squamous cell carcinoma (CSCC), who are not candidates for curative surgery or curative radiation. Consequently, sales have most likely increased in the third quarter as a result of geographical expansion.

Praluent sales came in at $73.7 million in the second quarter. In April, the FDA approved a label expansion of the drug to reduce the risk of heart attack, stroke and unstable angina requiring hospitalization of adults suffering from established cardiovascular (CV) disease. Hence, this is likely to have driven sales in the third quarter.

Apart from top-line numbers, investors will focus on Regeneron's pipeline updates. The company announced positive pivotal phase III results for evinacumab, an investigational angiopoietin-like 3 (ANGPTL3) antibody, in patients with homozygous familial hypercholesterolemia (HoFH).

Share Price Performance

Regeneron’s stock has lost 18% in the year so far compared with the industry’s decline of 0.8%.

 

Other Stocks to Consider

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

Allergan plc (AGN - Free Report) has an Earnings ESP of +2.51% and a Zacks Rank of 2. The company is scheduled to release third-quarter results on Nov 5. You can see the complete list of today’s Zacks #1 Rank stocks here.

Jazz Pharmaceuticals, Inc. (JAZZ - Free Report) has an Earnings ESP of +1.70% and a Zacks Rank #2. The company is scheduled to release third-quarter 2019 results on Nov 5.

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