What do $140 million and $790 million have in common? Absolutely nothing. And that's the reason Regeneron Pharmaceuticals (Nasdaq: REGN ) is up 188% this year.
In January, Regeneron said that it expected 2012 sales of its new macular degeneration drug, Eylea, would be between $140 million and $160 million. At the time, I called that conservative, but there was no way I could have guessed that sales would come in between $790 million and $815 million, the biotech's new guidance for the year. By my count, this is the fourth time Regeneron has raised guidance this year.
Even the new guidance might be conservative. In the third quarter, Eylea sales increased 26% quarter over quarter. If Regeneron kept that pace, sales would top $860 million for the year.
Keeping that pace might be a little difficult since the company faces a headwind as it ramps up sales; the label recommends that doctors give Eylea every month for the first three months and then transition to every-other-month dosing. But even at the high end of its guidance, the company needs quarter-over-quarter growth of just 3.6% to make its estimate. Even working off the lower base, that seems doable. Considering the history, my guess is that investors will be disappointed if Regeneron doesn't blow that number away again.
To put this in launch in perspective, the only recent launch I can think of that's done better is Vertex Pharmaceuticals' (Nasdaq: VRTX ) Incivek, a blockbuster within four quarters. Dendreon's (Nasdaq: DNDN ) Provenge hasn't reached that level. Or even half of it. Ditto for GlaxoSmithKline's (NYSE: GSK ) Benylsta, another hopeful-turned-dud.
To keep the sales going, Regeneron will have to take market share from Roche's (OTH: RHHBY) Lucentis, which has to be injected every month. Some doctors also split vials of Avastin, a cancer drug that works in the same way as Lucentis. The split vials lower the cost per injection substantially, but treatment of macular degeneration with Avastin has been linked with infections. One has to wonder if the unrelated cases on meningitis from contamination at compounding pharmacies will give doctors pause about trying to save a buck using Avastin off label.
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