On Jun 20, 2013, we retained our Neutral recommendation on
Regeneron Pharmaceuticals Inc.
). Our investment thesis is supported by a Zacks Rank #3 (Hold).
ALEXION PHARMA (ALXN): Free Stock Analysis
JAZZ PHARMACEUT (JAZZ): Free Stock Analysis
REGENERON PHARM (REGN): Free Stock Analysis
SANOFI-AVENTIS (SNY): Free Stock Analysis
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Why the Reiteration?
Regeneron reported higher-than-expected earnings in the first
quarter of 2013, on the back of strong sales of its eye-drug
Eylea. The drug has performed well since its US launch in late
2011 for treating patients suffering from neovascular form of
age-related macular degeneration (wet AMD). The European approval
of the drug for the same indication came in Nov 2012.
Sales of Eylea in the US came in at $314 million in the first
quarter of 2013, up 13.8% sequentially. Encouraged by the strong
performance, the company raised its forecast for 2013 Eylea
sales. Regeneron now expects 2013 sales of Eylea in the range of
$1.25-$1.325 billion (old guidance: $1.2-$1.3 billion). We too
expect Eylea to continue to perform well.
In Sep 2012, the US Food and Drug Administration (FDA) approved
the label expansion of Eylea into the macular edema following
central retinal vein occlusion indication.
Zaltrap, co-developed with
), is another promising drug in Regeneron's product portfolio.
Zaltrap gained FDA approval in early Aug 2012 for treating
previously treated patients suffering from metastatic colorectal
cancer. As per Sanofi, sales of Zaltrap were $14 million in the
first quarter of 2013.
The EU approval of Zaltrap for the same indication in Feb 2013 is
another positive for Regeneron. However, we believe that the
current price reflects all these positives. Hence, we retain our
Neutral recommendation on the stock.
Stocks That Warrant a Look
While we expect Regeneron to perform in line with its peers and
industry levels in the coming months and advice investors to wait
for a better entry point before accumulating shares, one can look
Alexion Pharmaceuticals, Inc.
) as a good buying opportunity. This biopharmaceutical company -
sporting a Zacks Rank #2 (Buy) - has performed encouragingly over
the last few quarters with potential to rise significantly from
Jazz Pharmaceuticals Public Limited Company
) is another company that is favorably placed in the biopharma
space with a Zacks Rank #1 (Strong Buy).