Please ensure Javascript is enabled for purposes of website accessibility

Why Regeneron Pharmaceuticals Dropped 11.3% in September

By Brian Feroldi - Oct 5, 2017 at 10:30AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The release of phase 3 trial results that failed to impress led to a sinking share price.

What happened

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

So what

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.

Scientists working in lab

Image source: Getty images.

Now what

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.

Brian Feroldi owns shares of Regeneron Pharmaceuticals. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sanofi Stock Quote
Sanofi
SNY
$43.83 (-1.22%) $0.54
Regeneron Pharmaceuticals, Inc. Stock Quote
Regeneron Pharmaceuticals, Inc.
REGN
$643.29 (2.32%) $14.58
AbbVie Inc. Stock Quote
AbbVie Inc.
ABBV
$142.29 (-0.22%) $0.31

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/15/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.