Regeneron cut to Neutral at Cannacord on FDA snub for high-dose Eylea
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Canaccord Genuity downgraded Regeneron Pharmaceuticals (NASDAQ:REGN) to Hold from Buy on Wednesday after the FDA declined to approve a high-dose version of its blockbuster eye disease therapy Eylea.
The Complete Response Letter issued for 8 mg of aflibercept injection indicates minor inspection issues, analyst John Newman points out.
However, Newman argues that the FDA might take a longer-than-expected six-month period to review a resubmitted marketing application, as opposed to the two-month period given for a class 1 resubmission.
Expecting a potential delay in high-dose Eylea approval until at least early 2024, Newman projects the company's Eylea revenue, led by its 2 mg version, to come under pressure in 2023. 
As reasons for the estimate, the analyst cites competition from Rocheâs (OTCQX:RHHBY) rival eye injection, Vabysmo, which, according to him, will lead to more discounting for the Eylea 2 mg version.
Newman lowers his price target on REGN to $720 from $953 per share as a result.
Commenting on the FDA's rejection of high-dose Eylea, Bairdâs Brian Skorney argued that "every day it isn't on the market is a day Vabysmo gets to build its lead and catching up with a similar profile won't be easy."
Skorney lowered his price target on Regeneron (REGN) to $760 from $800 per share, citing how the delay will impact the companyâs competitive position.
Meanwhile, Bank of America reiterated its Underperform rating and $650 per share target on REGN, citing overly optimistic Street expectations for high-dose Eylea's commercial success.
Noting that the FDA's decision was unexpected, analyst Geoff Meacham expects the FDA to ultimately approve the therapy based on new two-year data.
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