Regeneron Pharmaceuticals (REGN 1.67%) is a leader in the field of therapeutic proteins, with a history of more than 30 years of innovation and excellence. The biotech has partnered with Bayer to create a dominant eye-disease franchise, led by Eylea (aflibercept), the best-selling anti-VEGF drug in the market. The biotech has also collaborated with Sanofi to develop cutting-edge therapies for cancer, inflammatory diseases, and lung disorders.

The two companies amended their 2015 immuno-oncology collaboration agreement last year, giving Regeneron worldwide exclusive license rights to Libtayo. However, Sanofi and Regeneron continue to reap the benefits of their blockbuster immunology drug, Dupixent, which generated a staggering $8.68 billion in sales in 2022. With several promising label expansion projects under way, analysts predict that this powerful immunology drug could reach $20 billion in annual sales by 2030.

Medical equipment on top of a laptop keyboard.

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Regeneron, however, is entering a new phase in its lifecycle, with multiple competitors emerging in recent times, and the diverse field of biologics expanding well beyond protein therapeutics. Is Regeneron stock still a top growth play in this dynamic environment? Let's dig deeper to find out.

Growth is slowing, but green shoots abound

From 2012 to 2022, Regeneron's annual revenue rose at a compound annual growth rate of 24.2%. And in concert with its explosive top-line growth, the biotech's share price also ripped higher over this period. Regeneron stock, in fact, gained a healthy 208% over this 10-year period. Meanwhile, the benchmark S&P 500 Index produced a total return of just 16.3% over this same period. The biotech's market-beating performance during this prolonged period is a testament to the potent pricing power of biologic therapies in general and the robust demand for the biotech's products in particular. 

However, Regeneron's top-line growth is forecast to come in at a far more modest 4.7% in 2023 and 4.6% in 2024. The crux of the situation is that newer competitors such as Roche's Vabysmo have been driving both price declines and market share erosion for Eylea since its arrival in late 2022. A recent Food and Drug Administration approval for a long-lasting version of Eylea is expected to gradually soften the blow from Roche's rival eye treatment, but the company's era of overwhelming dominance in the arena of retinal diseases appears to be over. 

Regeneron has been preparing for this eventuality. The biotech has built a broad pipeline of next-generation immuno-oncology assets, it scored an attractively priced deal for Libtayo to make the PD-1 inhibitor the centerpiece of its oncology franchise, and it has been busy constructing a diverse array of other pipeline candidates with novel mechanisms of action, such as gene therapy, gene editing, and RNA interference. As a result, Regeneron has an excellent chance of bringing multiple cutting-edge medicines to market within the next few years. 

Still, Regeneron's long-term growth profile remains a mystery at this stage. The core problem is that there's no way to adequately forecast future sales of these completely novel modalities, such as gene editing through the biotech's partnership with Intellia Therapeutics. Patients may flock to these therapies for their potential as one-time cures, but their uniqueness may also keep some patients on the sidelines.

Underscoring this point, big pharma has repeatedly engaged in price wars over companies developing novel small-molecule drugs, but gene editing has yet to see even a moderate level of acquisition interest from the heavyweights in the industry. Instead, large pharma companies have chosen to gain exposure to these capabilities through external licensing deals or small equity stakes. The reason is that the commercial potential of these high-tech therapies remains an open question. 

Is Regeneron Pharmaceuticals stock a buy?

Regeneron's track record of excellence, along with its pipeline of innovative assets, are attractive features for investors on the hunt for long-term growth opportunities. However, the high degree of competition in several of the biotech's core areas of expertise -- ophthalmology, immuno-oncology, and immunology -- could weigh on its earnings power over the balance of the decade.

Moreover, it's currently unclear whether the biotech's foray into high-value areas like genomic medicine can drive healthy levels of revenue growth over the long term. For these two reasons, this biotech pioneer, despite its sterling record of success, is arguably best suited for investors with an elevated tolerance for both risk and volatility.