Attention bargain shoppers: There could be some deals in aisle biotech. Agenus Inc. (NASDAQ:AGEN) and Regeneron Pharmaceuticals (NASDAQ:REGN) dished out some disappointing losses in recent months, but the market's reaction to recent events seems a bit overdone.  

Investors are right to wonder if these beaten-down biotech stocks are best avoided or if now's the right time to scoop up shares of two quality companies at a discount. To find out, let's peek beneath the surface to see if other investors are missing something. 

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Agenus Inc.: Longshot worth taking? 

This stock's fallen around 40% over the past couple of months despite revealing nothing particularly damaging. The company's $365 million market cap seems a bit low for a company with lots of potential new cancer therapies in clinical-stage development and an incoming stream of royalty revenue. 

GlaxoSmithKline's (NYSE:GSK) launch of Shingrix, a new shingles vaccine that contains a proprietary booster licensed from Agenus, is progressing well, with first-quarter sales topping $150 million. A second vaccine aimed at malaria could be on the way, as well.

Last year, the company adjusted a deal with Incyte Corporation that will shift most financial responsibility and risk for developing a few partnered candidates to the big biotech. To top it off, Agenus launched a combination study with its most advanced candidate AGEN1884 and Merck & Co.'s Keytruda. If adding Agenus' candidate to Merck's drug leads to a survival benefit for newly diagnosed patients with stage 4 lung cancer, it could lead to billions in sales for Agenus' candidate.

Agenus also boasts a candidate similar to Keytruda, AGEN2034, in a mid-stage cervical cancer trial with AGEN1884. The company intends to use it to support a Food and Drug Administration (FDA) application slated for late 2019.

Add it all up, and the stock seems like a terrific bargain -- until you consider an important lesson Merck and Incyte recently learned the hard way. In short, you really shouldn't trust single-arm data from combination studies with drugs like Keytruda. Agenus isn't running any controlled studies with its lead candidates yet, and investors might be better off waiting until it does. Although this stock could soar, we just don't know enough about its candidates to gauge their odds of success.

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Regeneron Pharmaceuticals: Launch progress isn't that bad

We didn't need to wait for Regeneron's first-quarter earnings report to know how well its drugs are performing. Analysts had already started fretting over Dupixent sales, which reached just $128 million in the first quarter, according to the biotech's collaboration partner Sanofi (NASDAQ:SNY).

The first quarter of 2018 was Dupixent's fourth on the U.S. market, and its European rollout still is getting started. With 25% total subscription growth over the previous quarter, there's no reason to assume that the drug can't hit lofty peak annual sales targets north of $4 billion annually. After all, regulators in the U.S. and EU have already started reviewing applications that could expand Dupixent's reach to include asthma patients who need a lot more than a simple inhaler.

It seems that investors are looking at Dupixent's launch through glasses tinted by disappointing launches for two more Sanofi-partnered drugs. Kevzara outperformed the world's best-selling drug Humira in clinical trials, which encouraged the FDA to grant it an approval last May. Hampered by a label that limits the treatment to arthritis patients who already respond poorly to an existing therapy and a $39,000-per-year list price, Kevzara's first-quarter sales came in at just $10 million.

Regeneron's cholesterol-lowering medication Praluent was another drug with multibillion-dollar potential that's been a huge disappointment in the commercial setting. Trying to launch a treatment with a $14,000-per-year price tag didn't work, but a more affordable solution is getting attention from the right people. Express Scripts (NASDAQ:ESRX), a pharmacy benefits manager with a national formulary that covers around 25 million Americans, recently agreed to a straightforward reimbursement path in return for drastically lowered pricing. Express Scripts also removed Praluent's market rival Repatha from its formulary.

Praluent probably won't become a megablockbuster, but there are enough eligible patients to push its annual sales past the $1 billion mark several years from now. Eylea sales still are growing by double digits, and data presented earlier this year suggests incoming threats have no clear advantage over the entrenched leader.

Regeneron leaned on its blindness-preventing eyeball injection for around three-quarters of total revenue in 2017. Investors will want to watch closely for incoming threats, but for now, it looks like years of smooth sailing ahead.

The average stock in the S&P 500 trades at 17.0 times estimates, but Regeneron's poised for above-average earnings growth. Assuming Eylea keeps on trucking, the stock looks awfully cheap right now at just 16.3 times forward earnings estimates.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.