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Regeneron (REGN) Sails Steady on Label Expansion of Drugs

Shares of Regeneron Pharmaceuticals Inc. REGN have gained 10.7% in the past six months. This compares favorably to the 15% decline for the overall industry it belongs to.

 

While the overall biotech sector was in doldrums in 2018, Regeneron’s performance has been steady backed by strong growth of two drugs — Eylea and Dupixent. The strong performance in the last few quarters and a deep pipeline has put the spotlight on this leading biotech as industry is undergoing consolidation.

Regeneron’s key growth driver, Eylea continues to drive revenues for the company. The company has co-developed Eylea with the HealthCare unit of Bayer AG BAYRY. Eylea is approved in the United States, EU, Japan and other countries for the treatment of wet AMD, diabetic macular edema (DME) and macular edema following retinal vein occlusion, which includes macular edema following central retinal vein occlusion and macular edema following branch retinal vein occlusion.

The FDA also approved a 12-week dosing interval of Eylea injection in patients with wet AMD, based on physician's assessment. Consequently, Eylea is now the only anti-VEGF drug for the treatment of wet AMD that offers the flexibility to optimally treat patients, regardless of whether they require fixed-interval dosing of 4, 8 or 12 weeks. The FDA also accepted for review the supplemental Biologics License Application (sBLA) of Eylea for the treatment of diabetic retinopathy, with a target action date of May 13, 2019.

Another feather in the cap is the company’s atopic dermatitis (AD) drug, Dupixent. The uptake of the drug has been strong after it obtained approval last year for the treatment of adults with moderate-to-severe AD. The company and partner Sanofi SNY are also working to expand Dupixent’s label, which should diversify the company’s revenue base and reduce dependence on the lead drug. The FDA has accepted for priority review the sBLA for AD in adolescent patients and set a target action date of Mar 11, 2019.

Meanwhile, Regeneron is working to expand its portfolio/pipeline. In September 2018, the FDA approved Libtayo for the treatment of patients with metastatic or locally advanced CSCC who are not candidates for curative surgery or curative radiation. The drug is also under review in Europe and a decision is expected in the first half of 2019. Libtayo is also being evaluated for the treatment of non-small cell lung cancer in a phase III study, which is currently enrolling.

The company is also working to expand its PCSK9 inhibitor, Praluent’s label. The FDA approved Praluent for the treatment of patients with heterozygous familial hypercholesterolemia (HeFH) undergoing apheresis. The agency also accepted an sBLA for Praluent as a potential treatment to reduce major adverse cardiovascular events and had set a target action date of Apr 28, 2019.

However, competition is expected to stiffen for Eylea.

The biotech sector has started off with a bang in 2019, with shares of Celgene Corp. CELG soaring on an acquisition offer from large-cap pharma, Bristol-Myers. This, in turn, has put focus on other attractive big biotechs in the sector with lucrative valuations.

Zacks Rank

Regeneron currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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