Regeneron (REGN) Q1 Earnings Beat on Strong Eylea & Dupixent

·5-min read

Regeneron Pharmaceuticals, Inc. REGN reported strong growth in earnings and sales in the first quarter of 2021 on broad-based portfolio growth. Evidently, shares are up in pre-market trading following the strong results.

However, the company's shares have lost 0.2% in the past year compared with the industry’s decline of 6%.

Regeneron reported first-quarter earnings of $9.89 per share, comfortably beating the Zacks Consensus Estimate of $8.79. Earnings jumped 50% from $6.60 in the year-ago quarter.

Total revenues in the reported quarter increased 38% year over year to $2.52 billion but missed the Zacks Consensus Estimate by 1.96%. The year-over-year growth was driven by incremental contribution from the antibody cocktail, REGEN-COV (a cocktail of two monoclonal antibodies — casirivimab and imdevimab), for COVID-19. Total revenues, excluding REGEN-COV, increased 20% to $2.2 billion.

Quarterly Highlights

Net product sales in the United States increased to $1.7 billion, up from $1.2 in the year-ago quarter. Lead drug Eylea’s sales in the United States were $1.3 billion compared with $1.2 billion in the year-ago quarter.

We note that Regeneron co-developed Eylea with the HealthCare unit of Bayer AG BAYRY. The company is solely responsible for sales of this eye drug and entitled to profits in the United States. However, it shares profits and losses from the ex-U.S. Eylea sales equally with Bayer, except in Japan where the former receives a royalty on net sales.

Total revenues also included collaboration revenues of $754.4 million from Sanofi SNY, Bayer and Roche RHHBY, up from $528.3 million in the year-ago quarter. Sanofi’s collaboration revenues amounted to $364.8 million, up from $246.9 million in the year-ago quarter. Bayer’s collaboration revenues came in at $322.8 million, up from $281.4 million in the year-ago quarter. Roche’s collaboration revenues for REGEN-COV came in at $66.8 million.

Notably, Sanofi records global net product sales of Dupixent, Kevzara and ZALTRAP. Regeneron records its share of profits/losses in connection with global sales of Dupixent and Kevzara, and Sanofi pays the company a percentage of net sales of ZALTRAP. Regeneron records net product sales of Libtayo in the United States and Sanofi records the same outside the United States.

Dupixent’s sales surged to $1.3 billion, up from $855.2 million in the year-ago quarter. Libtayo sales came in at $100.8 million, up from $74.8 million in the year-ago quarter. Kevzara recorded sales of $69.1 million, up from $60.1 million in the year-earlier quarter.

Praluent’s global net sales totaled $104.6 million in the reported quarter, up from $79.8 million in the prior-year quarter. Effective Apr 1, 2020, Regeneron records net product sales of Praluent in the United States and Sanofi records the same outside the United States and pays the former a royalty on such sales.

REGEN-COV, its antibody cocktail for COVID-19, recorded sales of $438.8 million in the quarter.

R&D expenses increased to $673.2 million from $527.2 million, while SG&A expenses grew to $354.8 million during the quarter from $306.8 million in the year-ago quarter.

REGEN-COV Updates

The phase III treatment study in high-risk COVID-19 outpatients met its primary endpoint, showing that REGEN-COV significantly reduced the risk of hospitalization or death by approximately 70% with both REGEN-COV doses (1,200 mg and 2,400 mg) compared to placebo. The trial also met key secondary endpoints. Based on these results, Regeneron submitted a request to the FDA to update the Emergency Use Authorization (EUA) to the lower 1,200 mg dose.

The phase III COVID-19 prevention trial in uninfected household contacts of SARS-CoV-2 infected individuals also met its primary and key secondary endpoints.

Pipeline and Regulatory Update

The FDA accepted for review a supplemental biologics license application (sBLA) seeking approval for Dupixent in children aged 6 to 11 years with moderate-to-severe asthma. The agency has set a target action date of Oct 21, 2021.

In February 2021, the FDA approved Libtayo for the first-line treatment of patients with advanced non-small cell lung cancer (NSCLC) and metastatic or locally advanced basal cell carcinoma (BCC). The FDA also approved Evkeeza for the treatment of adults and adolescents with homozygous familial hypercholesterolemia (HoFH).

Our Take

Regeneron’s first-quarter results were strong with broad-based growth. Demand for Eylea revived and Dupixent maintained its strong performance. Incremental contribution from REGEN-COV boosted the top line and should propel sales as the pandemic continues. Continued growth in Eylea and Dupixent through further penetration in existing indications and a promising late-stage pipeline set the momentum for growth, going ahead. The approval of Libtayo in the lucrative indication of NSCLC and BCC should boost sales.

Regeneron Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Regeneron Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Regeneron Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Regeneron Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Regeneron Pharmaceuticals, Inc. Quote

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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