On Aug 26, 2014, we issued an updated research report on
The biopharmaceutical company reported earnings of $1.89 per share
in the second quarter of 2014, missing the Zacks Consensus Estimate
of $2.33 by a wide margin. Results were impacted by higher costs.
Both research & development costs as well as selling, general
and administrative (SG&A) expenses were on the upswing during
the quarter. The company expects adjusted SG&A costs to rise
further in the remaining quarters of 2014 due to higher pre-launch
expenses related to alirocumab and sarilumab. Regeneron is
developing the candidates with Sanofi (
The huge earnings miss dented investors' and analysts' confidence
in the stock. Hence, over the last 30 days, the analysts are
bearish on Regeneron, leading to a decline in the Zacks Consensus
Estimate. For 2014, the Zacks Consensus Estimate fell 14.4% to
$7.95 per share, while for 2015 it decreased 18.4% to $9.53 per
Though second-quarter 2014 U.S. sales of the eye drug Eylea
improved 15.6% sequentially after a disappointing first quarter, we
believe sales of the drug will have to improve significantly in the
remaining quarters in order to meet the 2014 guidance of $1.7
billion to $1.8 billion. Below par showing of the drug in the
remaining quarters of 2014 would not only cause it to miss its
sales guidance, but would also hurt the stock badly as Eylea is
Regeneron's key growth driver.
A key action date for Regeneron is coming up in October when the
FDA will decide on expanding the label of Eylea into the macular
edema after branch retinal vein occlusion indication. Any
regulatory setback/hiccup in gaining approval would hurt the stock.
Regeneron presently has a Zacks Rank #5 (Strong Sell).
Stocks That Warrant a Look
Some better-ranked biopharmaceutical stocks include Gilead Sciences
) and Celgene Corp. (
). While Gilead carries a Zacks Rank #1 (Strong Buy), Celgene is a
Zacks Ranked #2 (Buy) stock.
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REGENERON PHARM (REGN): Free Stock Analysis
SANOFI-AVENTIS (SNY): Free Stock Analysis
GILEAD SCIENCES (GILD): Free Stock Analysis
CELGENE CORP (CELG): Free Stock Analysis Report
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