Despite sharing a series of positive news items with investors, shares of biotech-giant Regeneron Pharmaceuticals (REGN 2.32%) fell more than 11% in September, according to data from S&P Global Market Intelligence.
Regeneron and its partner Sanofi (SNY -1.22%) made a number of announcements during the month that captured the market's attention.
Here's an overview of the key developments from the month:
- The two companies announced that their skin-cancer drug candidate Cemiplimab (REGN2810) received Breakthrough Therapy Designation from the Food and Drug Administration (FDA).
- Regeneron and Sanofi reported top-line results from its LIBERTY ASTHMA QUEST study, a phase 3 trial studying Dupixent as a treatment for asthma. The data showed that adding Dupixent to standard therapies reduced severe asthma attacks by 46% and improved lung function. What's more, the results were even better in the subgroups of patients who showed higher levels of eosinophilic cells. The two companies plan to submit the drug for approval in this indication before the end of the year.
- The two companies reported positive study results using Dupixent as a treatment for atopic dermatitis. The study showed that 59% of patients who received Dupixent with topical corticosteroids weekly -- and 63% who received Dupixent with topical corticosteroids every two weeks -- achieved a greater than 75% reduction in the Eczema Area and Severity Index score at 16 weeks.
- Regeneron and Sanofi announced that Dupixent has received regulatory approval in the E.U. to treat atopic dermatitis.
Given all the positive news, why did shares tumble? The most likely answer is that investors were looking for even better news from the company's LIBERTY ASTHMA QUEST study. The reason is that companies like AstraZeneca, Amgen, and AbbVie (ABBV -0.22%) have interesting asthma drugs in development that could compete with Dupixent one day. Since the LIBERTY ASTHMA QUEST showed that Dupixent wasn't as effective in treating patients with lower levels of eosinophilic cells, traders are worried that the drug might not have the commercial success that many were hoping for.
More than $50 billion is spent annually on treating asthma, so Regeneron's Dupixent is certainly going after a huge market opportunity. Management estimates that one million Americans could use Dupixent as a treatment for asthma if it wins regulatory approval. These figures suggest that blockbuster sales results are possible.
Will Dupixent go on to win the thumbs up from regulators and get the support that it needs from the healthcare community? While we won't know the answers to these questions for quite some time, this shareholder is content to sit tight while we wait to find out.