Regeneron (REGN) 2nd Quarter Earnings: What to Expect

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Shares of biotech specialist Regeneron Pharmaceuticals (REGN), which have surged 68% year to date, have been a popular way to play the race for a COVID-19 treatment. With COVID-19 cases rising in states like California, Texas, Florida and Arizona and sparking record deaths, the pandemic is showing no signs of slowing down.

But can Regeneron, given its prior struggles with execution, deliver on the optimism shown in its share price? The company is set to report second quarter fiscal 2020 earnings results before the opening bell Wednesday. Whether the stock price rises or falls broadly depends on what the management says about its promising coronavirus treatment, which was awarded a $450-million contract by the government to manufacture and supply REGN-COV2 — the company’s investigational double-antibody cocktail.

As part of Operation Warp Speed, REGN-COV2 is not only phase-2 and phase-3 for COVID-19 treatment, it’s also in a phase-3 study for the preventing COVID-19 infection. The unique position of being in both phases could, if successful, not only save lives, but also help people save billions of dollars on healthcare costs. It’s remarkable how quickly the company, which has faced some operational hurdles due to the pandemic, has turned its outlook around to now competing with the likes of Moderna (MRNA) and Pfizer (PFE).

Notably, Regeneron is more than just a COVID-19 play. Investors will want to know Regeneron’s key drug, Eylea, which was developed in collaboration with German drug giant Bayer. Eylea posted strong growth in Q1, delivering revenue of $1.17 billion. Regeneron controls about 80% of Eylea profits. Its other drug Dupixent (dupilumab) which is developed in collaboration with Sanofi (SNY), will be another product the market will keep an eye from progress and sales trends for the second half of the year.

For the quarter that ended in June, the Tarrytown, NY.-based company is projected to earn $5.98 per share on revenue of $1.74 billion. This compares to the year-ago quarter when earnings came to $6.02 per share on revenue of $1.93 billion. For the full year, ending in December, earnings are projected to rise 10% year over year to $27.20 per share, while full-year revenue of $7.62 billion would mark a decline of 3.12% year over year.

While both the top and bottom lines are expected to decline this quarter, this doesn’t reflect how strong the company has performed during the pandemic. In the first quarter, Regeneron beat on both revenue and profits, with revenue of $1.83 billion surging 33% year over year, while EPS of $6.60 surged 48% year over year and beat Street estimates by 51 cents. Sanofi collaboration revenue came in at $246.9 million, while Bayer collaboration revenue of $281.4 million rose about 7% year over year.

The strong gains were driven by strong global sales of Dupixent and Kevzara which soared 129% and 78%, respectively. The aforementioned Eylea posted revenue of $1.17 billion, up 9% year over year. These trends are certain to be the key focus of analysts questions on Wednesday’s conference call. They, of course, will be secondary to any update of REGN-COV the company can provide.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Richard Saintvilus

After having spent 20 years in the IT industry serving in various roles from system administration to network engineer, Richard Saintvilus became a finance writer, covering the investor's view on the premise that everyone deserves a level playing field. His background as an engineer with strong analytical skills helps him provide actionable insights to investors. Saintvilus is a Warren Buffett disciple who bases his investment decisions on the quality of a company's management, its growth prospects, return on equity and other metrics, including price-to-earnings ratios. He employs conservative strategies to increase capital, while keeping a watchful eye on macro-economic events to mitigate downside risk. Saintvilus' work has been featured on CNBC, Yahoo! Finance, MSN Money, Forbes, Motley Fool and numerous other outlets. You can follow him on Twitter at @Richard_STv.

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