Regeneron Pharmaceuticals, Inc.
) climbed 11.78% to $300.32 per share on Jan 14 following the
rosy fourth quarter 2013 outlook provided by the company on its
eye drug Eylea.
As per the preliminary (unaudited) results released by the
biopharmaceutical company, U.S. Eylea sales in the fourth quarter
of 2013 are expected to touch $400 million, up 10.2% sequentially
and 45% year over year. For full year 2013, U.S. Eylea sales are
expected to climb to $1.4 billion from $838 million recorded in
2012. The 2013 U.S. Eylea sales are above the company's projected
range of $1.35-$1.375 billion. We note that sales of the drug
have been on the rise ever since its U.S. launch in late 2011 for
treating patients suffering from neovascular form of age-related
macular degeneration (wet AMD).
Eylea is also available for the macular edema following
central retinal vein occlusion (CRVO) indication. Eylea is also
being developed for other eye disorders such as macular edema
after branch retinal vein occlusion and myopic choroidal
We note that Regeneron has co-developed Eylea with the
HealthCare unit of
). Regeneron is solely responsible for the U.S. sales of the eye
drug. The company is entitled to the entire profits arising from
the U.S. sales of Eylea. Regeneron and Bayer equally share the
profits and losses from ex-US Eylea sales, except for Japan where
Regeneron receives a royalty on net sales.
In another development related to Eylea, Regeneron announced
that it will co-develop a platelet derived growth factor receptor
beta (PDGFR-beta) antibody in combination with Eylea (an
intravitreal injection) for wet AMD with Bayer. Pre clinical
studies on the combination have yielded encouraging results. The
combination is expected to be evaluated in human studies
As per the agreement related to the above candidate, Regeneron
will receive an upfront payment of $25.5 million from Bayer
besides milestone and option payments of up to $40 million. The
two companies will share the world wide development costs related
to the program. Bayer will be entirely responsible for
commercializing the treatment (on approval) in ex-U.S. markets
with profits being shared equally. Regeneron will be responsible
for the same in the U.S. Moreover, Regeneron will be eligible for
the entire profits from the U.S. sales. Moreover, Bayer will be
responsible for certain third party royalties and share of
milestones. Regeneron also intends to submit an investigational
new drug application on ANG2 combined with Eylea during the
course of the current year.
Apart from the label expansion efforts on Eylea, Regeneron
boasts of an interesting pipeline including programs with
) which offer significant potential. The promising candidates
being developed under the antibody collaboration with Sanofi
include alirocumab, a proprotein convertase subtilisin/kexin type
9 (PCSK9) antibody, to lower lowdensity lipoprotein-cholesterol
cholesterol levels (phase III), sarilumab an antibody targeting
the interleukin-6 receptor (IL-6R) for rheumatoid arthritis
(phase III) and dupilumab an IL4R antibody being developed for
asthma, atopic dermatitis and nasal polyposis (phase II).
Regeneron initially entered into a partnership with Sanofi in
2007. The agreement has been recently amended. Sanofi, which
currently has approximately 16% stake in Regeneron, will have the
right to nominate an independent director to Regeneron's board on
reaching 20% stake as per the amended agreement. Sanofi retains
the right to acquire up to 30% of Regeneron's outstanding common
stock and Class A stock.
Regeneron also announced the launch of a new human genetics
initiative. The biopharmaceutical company has announced five year
collaboration with the Geisinger health system, one of the
largest integrated health systems in the U.S. for the
Regeneron carries a Zacks Rank #3 (Hold).
) is an example of a better-ranked stock in the biopharma space.
Actelion carries a Zacks Rank #1 (Strong Buy).
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