Regeneron slips as Raymond James downgrades on Eylea concerns
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Regeneron (NASDAQ:REGN) dropped ~2% pre-market Wednesday after Raymond James downgraded the pharma giant to Underperform from Market Perform, citing concerns on the future of its eyecare franchise led by anti-VEGF agent Eylea.
Regeneron (REGN) surged in September after the company said that an 8mg dose of the blockbuster therapy which it develops with German pharma company Bayer AG (OTCPK:BAYZF) (OTCPK:BAYRY) showed noninferiority to the standard 2mg dose with less frequent administration.
âThe life cycle extension benefits of 8mg aflibercept (AFL) is likely over-estimated,â the analyst Dane Leone wrote, referring to the generic term for Eylea.
Citing a survey of retinal specialists, the analyst argues that results can support the view that an 8mg dose can defend the company from a potential sales erosion for Eylea. Yet, âeven under a generous modeling scenario, it does not turn the tide for the structural decline of the franchise,â Leone added.
Arguing that REGNâs oncology franchise will continue to underwhelm in 2023, Leone notes that even with 8mg Eylea, the company will struggle to diversify away from the highly competitive anti-VEGF market which accounts for over 50% of its topline and even a higher share of profits.
Additionally, given the outlook of chronic obstructive pulmonary disease, the analyst sees limited upside to current forecasts for atopic dermatitis therapy Dupixent for which Regeneron (REGN) has partnered with Sanofi (SNY) (OTCPK:SNYNF).
During Q2 2022, Dupixent sales exceeded Street forecasts to reach $2.1B with ~40% YoY growth.