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How Regeneron Pharmaceuticals, Inc. Makes Most of Its Money

By Brian Orelli, PhD – Updated Jun 16, 2017 at 2:09PM

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One drug dominates, but diversification is coming.

Regeneron Pharmaceuticals (REGN -0.37%) has five drugs approved for sale by the Food and Drug Administration, but most of its revenue still comes from just one drug.


Q1 2017 Revenue

Eylea U.S. sales

$854 million

Eylea royalties on sales outside U.S.

$175 million

Everything else

$290 million

Data source: Regeneron.

Today's star

Eylea was originally approved to treat wet age-related macular degeneration, but Regeneron Pharmaceuticals has expanded the indication to three additional eye diseases: diabetic macular edema (DME), diabetic retinopathy in patients with DME, and maulcar edema following retinal vein occlusion. In addition to adding revenue, the expanded indications have allowed Regeneron to diversify away from Medicare, since patients in the other eye diseases tend to be younger than patients with wet age-related macular degeneration.

In the first quarter, U.S. sales of Eylea were up 9% year over year, with Eylea having about 66% of the market for its FDA-approved class of drugs, which includes Roche's Lucentis, which was approved first. Eylea was able to overtake Lucentis as the go-to drug for wet age-related macular degeneration because it has to be injected only every other month in the maintenance phase of dosing, compared with every month  for Lucentis.

To keep Eylea in its lead position, Regeneron is testing one of its pipeline drugs, nesvacumab, in combination with Eylea. Investors will get an idea of how the combination works compared with Eylea alone when phase 2 data is released in the second half of this year.

A doctor examines a patient's eye.

Image source: Getty Images.

Tomorrow's promises

Sales of Regeneron's cholesterol drug, Praluent, which it sells with partner Sanofi (SNY -2.30%), have been disappointing, with first-quarter sales coming in at just $36 million. The companies are in the middle of a patent battle with Amgen (AMGN -1.89%), which has a drug in the same class. Amgen was able to get an injunction, which the court eventually stayed, ordering Regeneron and Sanofi to stop selling Praluent. The threat of being pulled off the market had a negative effect on sales, but even taking that into account, the class of drugs hasn't quite taken off; Amgen managed to sell only $49 million worth of Repatha in the first quarter.

The outlook for the class of drugs, known as PCSK9 inhibitors, could improve, with Amgen recently showing that Repatha not only lowers cholesterol but also improves cardiovascular outcomes. Regeneron and Sanofi are running a similar cardiovascular-outcomes study for Praluent, with data expected in early 2018.

It's been a productive start to the year for Regeneron and Sanofi's regulatory department, with the FDA approval of Dupixent, which treats a form of eczema called atopic dermatitis, at the end of March and another FDA approval for their rheumatoid arthritis drug, Kevzara, earlier this month.

Of the two, Dupixent is likely to have an easier time, with less competition in the atopic dermatitis space. In contrast, quite a few drugs have dominated the market for a while in rheumatoid arthritis. Regeneron and Sanofi are also testing Dupixent as a treatment for asthma, which could further increase sales.


Regneron's fifth approved drug, Arcalyst, mustered sales of just $3.8 million in the first quarter. Sales for the drug that treats an orphan class of diseases called cryopyrin-associated periodic syndromes are so small that they're not even disclosed in Regeneron's press release; investors have to go to the company's SEC 10-Q filing to find the sales figure.


It can be risky investing in a biotech with one of its drugs making up a majority of the company's revenue, but Regeneron looks to be in a good position to diversify away from Eylea. The most likely near-term expansion of revenue should come from Dupixent, but Kevzara could give the top line a boost, and Praluent might see sales increase next year if the outcomes trial shows the drug can lower the risk of heart attacks, stokes, and other cardiovascular issues.

Brian Orelli and The Motley Fool have no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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