In early May, biotech giant Regeneron Pharmaceuticals (NASDAQ:REGN) posted stellar financial results for its first quarter, which ended March 31. Notably, the drugmaker's top line soared by 38% year over year to $2.53 billion. The company's REGEN-COV, an antibody cocktail for the treatment and prevention of COVID-19, was one of the main reasons for this performance. But this product and its meaningful impact on Regeneron's financials haven't been enough to keep its stock market performance afloat.

Over the past 12 months, shares of Regeneron are down by 7.6%; meanwhile, the S&P 500 is up by 37.6% in the same period. The biotech is currently trading for a reasonable 12 times forward earnings, while its price-to-earnings growth (PEG) ratio is an attractive 0.21 (anything under 1 is generally considered undervalued). Is the market overlooking Regeneron's potential?

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Some good news on the COVID-19 front

On June 4, Regeneron announced that the U.S. Food and Drug Administration (FDA) had updated its Emergency Use Authorization (EUA) for REGEN-COV. The regulatory agency gave the green light to the antibody cocktail to be administered at the 1,200 mg dose level, down from 2,400 mg. Furthermore, while REGEN-COV was previously supposed to be administered intravenously -- a process which can sometimes take several hours -- the FDA is now allowing it to be given by way of injection, a much quicker and less painful route.

As management argues, these changes, coupled with the fact that thousands of people are still contracting the disease (in part because of newer variants of the SARS-CoV-2 virus, which causes COVID-19), could significantly increase the number of antibody cocktails administered. The FDA's updated EUA could have a measurable impact on Regeneron's revenue.

Other reasons to be optimistic

Regeneron boasts exciting growth drivers beyond REGEN-COV. One of these is Dupixent, a treatment for atopic dermatitis. While Sanofi (NASDAQ:SNY) holds the commercial rights to Dupixent, the two companies equally share profits and losses associated with it in the U.S., while Regeneron is entitled to between 35% to 45% of the profits generated by Dupixent outside the U.S. As sales of the atopic dermatitis treatment increase, so will Regeneron's revenue associated with it.

And it looks like that's exactly what's going to happen. According to the research company Evaluate Pharma, sales of Dupixent will keep growing at a good clip in the next five years, and it will feature among the top 10 best-selling medicines in 2026. In the first quarter ending March 31, Sanofi recorded sales of $1.3 billion from Dupixent, a 48% year-over-year increase.

Smiling pharmacist leaning on a counter at a pharmacy.

Image source: Getty Images.

Other exciting products Regeneron can count on include Eylea, which is used to treat several eye-related conditions. Regeneron owns the rights to this product in the U.S., while Bayer (OTC:BAYR.Y) holds commercialization rights outside the U.S. In the first quarter, Regeneron's revenue from Eylea jumped by 15% to $1.35 billion.

Eylea makes up a large share of the biotech's product sales, but other medicines in the company's lineup are worth mentioning. Most notably, there is cancer treatment Libtayo, whose rights Regeneron also shares with Sanofi. Regeneron markets the medicine in the U.S. while Sanofi holds the rights to it outside the U.S. Regeneron's sales of Libtayo only came in at $69 million in the first quarter, an 11% increase compared to the previous fiscal year.

But this medicine landed two new approvals in February, one in advanced non-small cell lung cancer (NSCLC) and another in advanced basal cell carcinoma. According to Regeneron's senior vice president Marion McCourt, both indications represent "meaningful growth opportunities for Libtayo."

McCourt also said:

In April, we deployed our expanded and highly experienced field force across these indications to extend our Libtayo promotional impact. In lung cancer, we have heard from oncologists that Libtayo is highly competitive, based on the strength of our compelling clinical data and overall value proposition. Early launch indicators are encouraging, with uptake evident at top academic and community-based practices. We're advancing formulary placement, securing favorable payer coverage decisions, and growing overall market awareness.

Investors could start seeing the impact of these new indications on Libtayo's sales when Regeneron releases its financial results for the second quarter. Of note, Regeneron also has more than two dozen products in its pipeline. Even a handful of new approvals from these will be welcome additions to the company's lineup.

Worth serious consideration

Regeneron is looking like a great investment right now for at least three reasons. First, the FDA's updated EUA for REGEN-COV will likely lead to a boost in sales for the antibody cocktail, at least in the short term. Second, sales of Dupixent, Eylea, and Libtayo will also continue their runs, which is good news for the company's top line. Third, the biotech looks fairly valued in a market in which frothy valuation metrics are commonplace. For all those reasons, Regeneron looks like a biotech stock worth buying right now.

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.