The global landscape is fraught with simmering tensions, but one universal commonality remains intact: the need for a coronavirus vaccine.
However, Canaccord analyst John Newman believes that until a vaccine becomes available, there could be another solution. And one just as potent.
“Regeneron's (REGN) REGN-COV2 antibody cocktail could provide immediate treatment for COVID-19 patients, whereas a vaccine would not. We believe REGN-COV2 is a much-needed approach to provide both immediate impact and a supplement to protection once vaccines are (hopefully) available,” said the 5-star analyst.
Regeneron initiated the Phase 3 study for REGN-COV2 in July, evaluating its efficacy in treating and preventing COVID-19. Initial data from the trial could become available by the end of September, ahead of vaccine data.
Newman argues that what differentiates REGN-COV2 from vaccines is its potential to actually treat active COVID-19. Additionally, before a vaccine becomes widely available, REGN-COV2 could also be used to prevent infection, thereby protecting those most at risk such as front-line workers and elderly patients.
“Even after the availability of a vaccine,” Newman adds, “REGN-COV2 could supplement protection for those not developing an antibody response and help limit pressure on hospital systems.”
The Phase 3 trial is evaluating REGN-COV2's ability to prevent infection in subjects who have been in close proximity to a COVID-19 patient. When initial REGN-COV2 results are presented, Newman says he will be specifically looking out for data regarding this issue as “this could be informative for long-term care and nursing home settings most vulnerable to COVID-19, as well as hospital settings where workers are constantly exposed.”
Newman expects Regeneron to produce hundreds of thousands of doses per month for prevention, and tens of thousands of doses a month to treat active disease. The company could produce even more if other companies offer Regeneron their manufacturing capabilities.
To this end, Newman rates REGN a Buy along with a $700 price target, which implies a 14% upside potential from current levels. (To watch Newman’s track record, click here)
The Regeneron bulls currently have a slight edge among Wall Street analysts. The stock has a Moderate Buy consensus rating based on 10 Buys and 8 Holds. At $650.94, the average price target puts the 12-month upside potential at 6%. (See Regeneron stock analysis on TipRanks)
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