Stock (Symbol) |
Regeneron (REGN) |
Stock Price |
$372 |
Sector |
| Healthcare |
Data is as of |
| July 7, 2016 |
Expected to Report |
| Aug 2 – Aug 8 |
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 lost all momentum as estimates come down. Last year the Biotech drug developer was selling for around $500 a share and has now dropped to $372 as 2016 profit estimates have dropped from around $15 to around $11. Some of the decline is due to a weak Biotech sector, as Hillary Clinton is the favorite to be our next President and wants to lower drug prices. Regeneron’s main source of revenue is Eylea which 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. But Amgen recently went to court stating Praluent was infringing on Amgen’s patent — and won. Now either Regeneron wins on appeal, pays a royalty to Amgen, or removes Praluent off the market. A royalty of 5% would be reasonable, but 10% to 20% would cut into profit estimates. Regeneron has a good pipeline of 15 other drugs in development, including sarilumab, which treats rheumatoid arthritis, dupilumad which could help asthma and/or atopic dermatitis, and on a drug that targets cancer. This stock’s chart looks sick, and may foretell troubles ahead, thus I’m staying away. If Praluent gets removed from the U.S. market things could get ugly. But estimates are for the company to make around $10 this year, $15 next year and $20 in 2018 so this is a stock to monitor closely. |
One Year Chart |
 Wow, how the mighty have fallen. Not only is profit growth bad right now but the company now looks to make less money this year than it did last year. Profits dropped 11% last qtr even though sales increased 38%. The company missed estimates that had already dropped a qtr ago, and then lowered estimates going forward. Estimates for the next 4 qtrs are: -9%, -20%, 2%, and 42%. Dont’ get too excited about the 4QtrsOut estimate because comparisons are easy and REGN might not even hit that number. |
Fair Value |
 Last qtr I took my Fair Value down from 42x earnings to 25x. I may look to increase the Fair Value P/E to 35 is we get some positive news. |
Bottom Line |
 Regeneron’s future hinges on the Praluent outcome. Amgen could stick it to the company by having the drug removed from the market or assessed a big royalty fee, and that could be devastating. From the looks of the stock chart that’s a distinct possibility. Looking at the annual profit figures shows a more positive story as profits look to grow from $10 this year to $15 next year and $20 the year after. This is a stock to have on the radar. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
