Stock (Symbol) |
Regeneron (REGN) |
Stock Price |
$351 |
Sector |
| Healthcare |
Data is as of |
| March 17, 2016 |
Expected to Report |
| May 5 – May 9 |
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) has a lot to deal with right now. Last qtr REGN missed profit estimates of $3.42 by a whopping 59 cents. Analysts then lowered future qtrs as well as annual estimates. 2016’s est fell from $1.94 to $11.67, and that would make profits lower than 2015’s. The company also just lost a patent suit to Amgen, which will probably be worked through with royalties going to AMGN. If that wasn’t enough, drug stocks are really weak as Hillary Clinton is the favorite to be our next President, and she has vowed to lower drug prices. But not all is bad with REGN. It has a blockbuster in Eylea which is 2/3rds of revenue and treats molecular degeneration, the leading cause of blindness in the US. Regeneron now has another blockbuster, in Praluent, which lowers “bad” LDL-cholesteral in patients with heart disease who need more than the standard treatment. This new drug could one day prove to prove to prevent heart attacks and strokes. Regeneron also has a good pipeline of 15 other drugs in development, including sarilumab, which treats rheumatoid arthritis, and dupilumad which could help asthma and/or atopic dermatitis. Regeneron is working on a drug that targets cancer as well. This stock is around a 52-week low in a market that has been rising for a month. The trend is your friend, and REGN’s trend is down, thus I will sell the stock from the Growth Portfolio today. I removed REGN from the Aggressive Growth Portfolio earlier this week. |
One Year Chart |
 Bad looking stock chart. I did a research report on another stock this morning, and that stock fell during the Jan/Feb market correction but has since bounced back and is close to a 52-week high. This chart looks nothing like that. Note profit growth just fell out of bed, and Estimates how profits could fall the next 2 qtrs (these looked good last qtr, and just got slashed). Nice Est LTG of 20% thus I’ll continue to watch this stock. |
Fair Value |
 I’m taking my Fair Value down from 42x earnings to 25x. That gives REGN a Fair Value of $292. Also, 2016 estimates just got slashed from $14.97 to $11.67 so they could decline again next qtr. |
Bottom Line |
 Regeneron has two key drugs that have the ability to push profits higher, as well as other drugs in development. But this year looks to be one of lackluster profit growth and with the political atmosphere pushing down drug stocks I think it’s best to step away for a while. I will sell REGN from the Growth Portfolio and keep the stock on my radar. I anticipate buying the stock back if or when profit growth accelerates. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
