Biotechnology giant Regeneron's (REGN 1.73%) eye medication EYLEA is one of the best-selling blockbuster drugs around, generating $9.4 billion sales globally in 2021. The drug is approved for a number of eye diseases and has been a mainstay for Regeneron for the past decade. Although its patents are nearing the end of their lifespan, Regeneron has a number of new treatments that will step in to replace lost revenue.

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Cornerstone patent set to expire

EYLEA is an eye injection used to prevent vision loss in patients with age- or diabetes-related retinal disease. With over 50 million doses administered worldwide, the drug is Regeneron's top-selling product by a large margin. Even after splitting profits outside of the United States with collaborator Bayer (BAYZ.F 0.89%), Regeneron still received $1.9 billion in sales in the first quarter of 2022, providing 64% of Regeneron's total revenue.

This revenue will decline sharply over the next several years as EYLEA loses patent protection. The main US composition of matter patent, which protects the drug's combination of ingredients, is set to expire next year. The European composition of matter patent offers protection until 2025. These will be the main triggers that open the door to competition from biosimilars, although Regeneron's other patents on the formulation and methods of treatment could offer partial protection through 2032. 

Experts see EYLEA's patent life running out somewhere between 2025 and 2028, and there are already a number of biosimilars poised to enter the market. Amgen (AMGN 2.37%) and Novartis's (NVS 1.08%) Sandoz, among others, have Phase 3 trials for biosimilars nearing completion. These biosimilars could grab a big chunk of the market when they get approved.

Holding on to the branded market 

So far, Regeneron has been fending off competition from Novartis' Beovu and Roche's (RHHB.F 1.42%) Lucentis to retain about 75% market share in the branded category. However, Novartis is submitting for new indications on Beovu that may encroach on EYLEA's total market. Beovu was approved in Europe in March and is pending approval in the US for its second indication, and Novartis claims that its drug requires fewer injections than EYLEA.

Regeneron's aflibercept 8mg, a high-dose version of EYLEA, should be able to counter this threat by reducing the number of necessary doses. A typical treatment requires a series of initial doses, followed by an individualized regimen based on disease progression. Phase 3 trials for aflibercept should complete in the latter half of this year. 

More opportunities in inflammation and oncology

Regeneron's second leading drug, Dupixent, should go a long way toward covering the gap as EYLEA revenues decline. Dupixent was first approved for eczema by the FDA in 2017, but has since shown benefit against a variety of inflammatory conditions. Most recently, the FDA approved Dupixent in May for a chronic disease of the esophagus, eosinophilic esophagitis.

Regeneron and partner Sanofi (SNY -1.17%) will pursue a number of submissions over the next two years to expand the indications for Dupixent. The two companies believe that this will increase the total addressable market by about 25%, to just over 4 million people. 

With substantial room for market penetration and expanding indications, Dupixent has high growth potential. Sanofi expects peak revenue to roughly triple compared to its current level. This would bring Regeneron's Dupixent first-quarter revenue of approximately $626 million to roughly $1.9 billion -- on par with EYLEA.

Moving forward, Regeneron will look to Dupixent to replace EYLEA revenue, and to its pipeline to add some growth. The company seeks to expand on its cancer treatment Libtayo's success in some skin and lung cancers with upcoming submissions for two new oncology molecules. On top of that, its COVID-19 drug cocktail has also generated a nice cushion of cash to help build out the pipeline. Overall, EYLEA's impending patent cliff looks manageable, and shareholders or interested biotech investors shouldn't be too worried.