What's in the Cards for Regeneron's (REGN) Q3 Earnings?
Regeneron Pharmaceuticals, Inc. REGN is scheduled to release third-quarter 2020 results on Nov 5, before the opening bell.
The company has an impressive track record. In the last reported quarter, the company beat earnings expectations by 14.93%. It surpassed earnings estimates by 11.05%, on average, in the last four quarters.
Regeneron Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Regeneron Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Regeneron Pharmaceuticals, Inc. Quote
Let’s see how things are shaping up for the upcoming announcement.
Factors at Play
A major chunk of Regeneron’s revenues comes from sales of key drug, Eylea, which is approved for various ophthalmology indications (neovascular age-related macular degeneration, diabetic macular edema and macular edema, among others). Eylea was developed in collaboration with Bayer AG. Regeneron records net product sales of Eylea in the United States, while Bayer records net product sales of the drug outside the country. Regeneron also records its share of profits/losses in connection with sales of Eylea outside the United States. Eylea sales in the second quarter of 2020 came in at $1.11 billion in the United States and were negatively impacted by the COVID-19 pandemic. The trend most likely continued in the third quarter, though sales might have witnessed some stabilization. The Zacks Consensus Estimate for Eylea sales in the United States is pegged at $1.2 billion.
Regeneron has a collaboration agreement with Sanofi SNY for some of its drugs like Dupixent, Praluent and Kevzara.
Apart from Eylea, investors will be focusing on Dupixent’s (sales are recorded by Sanofi) performance and label expansion. The drug has been the primary growth driver in the last few quarters. Regeneron records its share of profits/losses in connection with global sales of Dupixent and Kevzara within collaboration revenues.
Asthma drug Dupixent’s sales maintained solid momentum in the second quarter of 2020 on continuous label expansion and the trend is expected to have continued in the third quarter. Label expansion of the drug in the last few months has most likely boosted sales, further. The Zacks Consensus Estimate for Dupixent sales is pegged at $1 billion.
In May, the FDA approved Dupixent for children aged 6 to 11 years with moderate-to-severe atopic dermatitis. In June 2020, the National Medical Products Administration (NMPA) in China approved the drug for adults with moderate-to-severe atopic dermatitis. The incremental sales from these added indications might have been realized in the to-be-reported quarter. In June 2020, the FDA approved a 300-mg, single-dose, pre-filled pen of Dupixent.
Investors will also focus on the performance of PCSK9 inhibitor, Praluent, and Libtayo. Sales of Libtayo came in at $63.3 million in the United States in the previous quarter. Regeneron records net product sales of Libtayo in the United States and its share of profits/losses in connection with sales of the drug outside the country. Sales have most likely recorded a sequential growth in the to-be-reported quarter. Praluent sales have most likely recorded growth on label expansions approved last year.
Key Recent Developments
Regeneron submitted a request to the FDA for an Emergency Use Authorization (EUA) for its experimental COVID-19 treatment, REGN-COV2. REGN-COV2 is a combination of two monoclonal antibodies (REGN10933 and REGN10987) and was designed specifically to block the infectivity of SARS-CoV-2, the virus that causes COVID-19.
Regeneron recently announced positive, prospective results from an ongoing phase II/III seamless trial in the COVID-19 outpatient setting, showing its investigational antibody cocktail, REGN-COV2, met the primary and key secondary endpoints. REGN-COV2 significantly reduced viral load and patient medical visits (hospitalizations, emergency room, urgent care visits and/or physician office/telemedicine visits).
Share Price Performance
Regeneron’s stock has surged 48% year to date against the industry’s decline of 6.3%.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for Regeneron this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate of $7.17 and the Zacks Consensus Estimate of $7.24, is -0.87%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Regeneron has a Zacks Rank #3.
Stocks to Consider
Here are a few stocks you may want to consider, as our model shows that these the right combination of elements to post an earnings beat this season.
Geron GERN has an Earnings ESP of +6.25% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Regenxbio, Inc. RGNX has an Earnings ESP of +4.76% and a Zacks Rank #3.
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Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
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