Stock (Symbol) |
Regeneron (REGN) |
Stock Price |
$359 |
Sector |
| Healthcare |
Data is as of |
| January 7, 2017 |
Expected to Report |
| Feb 7 – 13 |
Company Description |
 REGN, Inc. is an integrated biopharmaceutical company that discovers, invents, develops, manufactures and commercializes medicines for the treatment of serious medical conditions. REGN commercializes medicines for eye diseases, colorectal cancer, and a rare inflammatory condition and has product candidates under development in other areas, including hypercholesterolemia, oncology, rheumatoid arthritis (RA), asthma and atopic dermatitis. REGN’s marketed products include EYLEA (aflibercept) injection, ZALTRAP (ziv-aflibercept) injection for intravenous infusion and ARCALYST (rilonacept) injection for subcutaneous use. The Company has 17 product candidates in clinical development. Its product candidates consist of two trap-based clinical programs and 15 human monoclonal antibody product candidates. REGN has generated each of the antibodies using its VelocImmune technology. Source: Thomson Financial |
Sharek’s Take |
 Regeneron (REGN) had expected to have a new blockbuster to boost profits, but now that drug has to be off the market in the US within 30 days. Regeneron’s main source of revenue is Eylea which treats molecular degeneration, the leading cause of blindness in the US. The company was expected to have another blockbuster in Praluent, which lowers “bad” LDL-cholesteral in patients with heart disease who need more than the standard treatment. Last year Amgen recently went to court stating Praluent was infringing on Amgen’s patent — and Amgen won. Regeneron’s choices were to win appeal, pay a royalty to Amgen, or removes Praluent off the market. Well, REGN & AMGN never came to an agreement on royalties and yesterday Amgen won a permanent injunction prohibiting Regeneron from manufacturing, using, selling or offering Praluent in the Unites States. Praluent was approved by the FDA last year, and early sales were less than expected, thus analysts lowered their 2017 profit estimates from $18.50 to $16.45, $15.42, $14.49 and $14.17 the past 5 qtrs. Regeneron plans to appeal but profit estimates should get slashed again as it looks like Amgen wants Praluent off the market. Regeneron does have a good pipeline of 15 other drugs in development, including Sarilumab, which treats rheumatoid arthritis, and Dupixent (dupilumab) which could help asthma and/or atopic dermatitis. Dupixent has achieved clearing or near-clearing of skin lesions in testing, but hasn’t received regulatory approval yet. But Praluent was expected to be the Rudolph to Santa’s sleigh. Shares of REGN fell from $381 to $359 on yesterday’s news. Shares of REGN are on my radar, for now. |
One Year Chart |
 Last qtr Regeneron posted a profit of $3.13 vs. $3.47 in the year-ago period and beat the street by 39 cents. Next qtr’s estimate and 2016’s estimate increased a bit after the news, but all the other estimates fell. These estimates were figured before this ruling took place, thus these numbers are expected to be lowered. |
Fair Value |
 I think the stock should have a Fair Value of 30x earnings, which today gives us a $425 Fair Value. But with profit figures looking to get reduced, I am not a buyer here. |
Bottom Line |
 Regeneron had a great run on the back of Eylea, and investors continued to push the stock higher on high expectations for Praluent. Now with Praluent’s future in question the company may have to look for other ways to grow profits. At this point, I’m not considering investing in Regeneron as I want to see what estimates will look like when the dust settles. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
