Regeneron Pharmaceuticals Inc.
) fourth quarter 2012 earnings (excluding special items but
including stock-based compensation) of $1.21 per share breezed
past the Zacks Consensus Estimate of $1.07. The company suffered
an adjusted loss of $0.54 per share in the year-ago quarter.
Higher revenues boosted earnings in the final quarter of 2012.
Total revenue in the reported quarter soared 237% to $415
million, driven by strong sales of eye drug, Eylea. This was the
fourth full quarter of the drug in the market. The drug was
launched in the US in Nov 2011 for treating patients suffering
from the neovascular form of age-related macular
In Sept 2012, the label of the drug was successfully expanded
to treat patients suffering from macular edema following central
retinal vein occlusion
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Revenues handsomely beat the Zacks Consensus Estimate of $393
million. Total revenue included net product sales, collaboration
revenue, technology licensing revenue and contract research and
Full year earnings (excluding special items but including
stock-based compensation expense) came in at $3.78 per share,
$0.18 above the Zacks Consensus Estimate. The company suffered an
adjusted loss of $2.41 per share in 2011. Revenues jumped 209% to
$1.4 billion in 2012, edging past the Zacks Consensus Estimate of
The Quarter in Detail
Net product sales jumped to $281 million in the final quarter of
2012 from $30 million a year ago. Eylea sales came in at $276
million in the reported quarter, up 13% sequentially. Sales of
Regeneron's first marketed product, Arcalyst, for treating
cryopyrin-associated periodic syndromes, accounted for the
Moreover, Zaltrap was approved by the US Food and Drug
Administration in Aug 2012 as a combination therapy for treating
patients suffering from metastatic colorectal cancer, who are
either resistant to or whose disease has progressed following
treatment with an oxaliplatin-containing regimen. Zaltrap was
approved for the metastatic colorectal cancer indication in the
EU in Feb 2013. Regeneron co-developed Zaltrap with
As per the terms of the agreement, both companies share profits
and losses from commercialization of the drug except for Japan,
where Regeneron receives a royalty on sales. As per Sanofi, sales
of Zaltrap were $23 million in the fourth quarter of 2012.
Collaboration revenues came in at $126.6 million, up 46%.
Revenues from technology licensing remained flat at $5.9 million.
Revenues from contract research and others accounted for the
balance in the reported quarter.
Both research and development (R&D) expenses and selling,
general and administrative (SG&A) expenses were on the
upswing during the reported quarter.
The increase in R&D expenses was primarily attributable to
the efforts of the company to develop its pipeline. Higher costs
related to the marketing of Eylea were primarily responsible for
pushing the SG&A costs up.
Bright Outlook for Eylea
Regeneron expects sales of Eylea to increase by 50% in 2013 over
2012 levels ($838 million). Consequently, 2013 sales are expected
in the range of $1.2-$1.3 billion.
Regeneron, a biopharmaceutical company, carries a Zacks Rank #3
(Hold) in the short run. Biopharma stocks, which are currently
well placed include,
). Both stocks carry a Zacks Rank #2.