After posting better-than-expected first-quarter results, Regeneron Pharmaceuticals (REGN 0.94%) stock enjoyed a nice bounce. The biotech announced solid sales for eye-disease drug Eylea and a strong launch for atopic dermatitis drug Dupixent with partner Sanofi (SNY 0.68%)

But is Regeneron still a smart investing pick after the recent surge? Here are the bull and bear cases for the biotech stock.

Buy diagram with a pen and a calculator

Image source: Getty Images.

Buy -- Regeneron has tremendous potential

Although Eylea isn't generating the double-digit percentage growth of the past, it remains a big moneymaker for Regeneron. The company reported $854 million in U.S. sales of the drug for the first quarter, up 9% year over year. That's not bad. There's still plenty of potential for Eylea as well, with increasing prevalence of diabetes and an aging population (both of which should mean greater numbers of patients with age-related macular degeneration).

Regeneron also claims several new sources of revenue outside of Eylea. As previously mentioned, Dupixent got off to a great start in the first quarter. There is a significant unmet medical need in the drug's initial target indication, atopic dermatitis. Sanofi and Regeneron report results from a late-stage study evaluating Dupixent in treating asthma this year. If all goes well, that could be another lucrative market for the two companies -- especially since many patients have both atopic dermatitis and asthma. 

In addition, Sanofi and Regeneron have a late-stage underway for Dupixent in treating nasal polyps. The partners also plan to initiate a late-stage study targeting treatment of pediatric patients with atopic dermatitis and a phase 2 study for treatment of food allergies this year.

Another catalyst is just around the corner. Regeneron and Sanofi expect a decision by the U.S. Food and Drug Administration (FDA) for rheumatoid arthritis drug Kevzara by May 22. The two companies are also pursuing regulatory approval for the drug outside of the U.S. 

Over the long run, Regeneron and Sanofi remain hopeful that cholesterol drug Praluent can achieve its potential. Some observers projected that the PCSK9 inhibitor could become a huge blockbuster, but sales have been sluggish as payers await cardiovascular outcomes data.

Regeneron could also become a contender in the hot immuno-oncology (I-O) space. The biotech recently announced an agreement with Inovio to evaluate PD-1 inhibitor REGN2810 in combination with two of Inovio's candidates in treating brain cancer. Regeneron also is moving ahead with a clinical study of REGN2810 in combination with Sillajen's oncolytic virus Pexa-Vec in treating kidney cancer.

Don't buy -- there are too many unknowns and the stock's expensive

The case against Regeneron comes down to two primary arguments: (1) There's a lot of uncertainty with the company's products and pipeline; and (2) the stock's valuation is too high. Let's look at both of these arguments in more detail.

Eylea continues to generate over half of Regeneron's total revenue. The company is having to discount the drug in the U.S. to compete against Roche's Lucentis. Regeneron says that Roche's development of an implantable delivery platform for its drug isn't a real threat, but the added competition shouldn't be dismissed. 

Dupixent will no doubt be a big success, but profits will be split with Sanofi. Despite getting positive decisions from two leading pharmacy benefits managers, the two companies could have a tougher road than expected convincing other major payers to loosen their purse strings for the relatively expensive drug. 

If approved, Kevzara could face an uphill battle in the crowded rheumatoid arthritis market. The pricing environment in the U.S. is especially complicated. It won't be easy for Regeneron and Sanofi to carve out a space for Kevzara.

As for Praluent, simply look at Amgen's (AMGN -0.69%) weak first-quarter results for its rival PCSK9 inhibitor, Repatha. Even though Amgen announced positive results from a cardiovascular outcomes study in early February, payers don't appear to be overly excited yet.

Amgen also rolled out a deal with Harvard Pilgrim to refund the cost of Repatha if a patient has a heart attack or stroke while taking the drug. That could force Regeneron and Sanofi to come out with their own outcomes-based reimbursement arrangements.

There's also a question about whether or not Regeneron is arriving too late to the party with its PD-1 inhibitor. Other companies are well ahead of the biotech with their I-O drugs. Regeneron says that "sometimes it's best not to be first." That's true, but it's unknown if it will prove applicable for REGN2810.

Finally, Regeneron stock currently trades at 28 times expected earnings. This valuation doesn't compare favorably with other biotechs that are at least the same size as Regeneron. 

Which argument wins?

My colleague Todd Campbell thinks that Dupixent and Kevzara could be the shot in the arm that Regeneron needs. I suspect that Todd is right.

Atopic dermatitis should just be the start for Dupixent. Approval in additional indications would be huge for Regeneron. And Kevzara's efficacy should enable Regeneron and Sanofi to establish at least a toehold in the rheumatoid arthritis market. Once they get going, higher market share could come.

I wouldn't write off Eylea's growth prospects, either, especially with the prospects for success with a clinical study evaluating the drug in combination with Regeneron's Ang2 antibody nesvacumab. I'm not as sold on success for Praluent yet, but the drug could eventually take off.

All in all, I think Regeneron is a good long-term pick even after the nice post-earnings bounce. Count me in with the bulls on this biotech stock.