There's a lot going on with biotech giant Regeneron (REGN -0.84%) that may be of interest to investors. The company could soon face biosimilar competition from one of its key growth drivers, Eylea, while it recently received an important regulatory approval from the U.S. Food and Drug Administration (FDA).
Regeneron has trounced the market over the trailing-12-month period, but it's essential to review these developments before buying the company's shares. With that said, let's dig deeper into what's happening with Regeneron and figure out whether it is worth investing in the drugmaker.
A turning point for Eylea -- and Regeneron
Eylea is a medicine for wet age-related macular degeneration (AMD). It has been one of Regeneron's most significant growth drivers for a while now, although it shares the rights to it with Bayer. Regeneron owns exclusive rights to Eylea in the U.S. and is entitled to a percentage of the medicine's revenue outside the country where Bayer markets it.
Regeneron's U.S. sales of Eylea in 2022 (not including royalties from Bayer) were $6.3 billion. The biotech's total revenue for the year was $12.2 billion.These numbers highlight the importance of this medicine for the company.
However, biosimilars for Eylea could enter the market as early as May 2024. Several biosimilar manufacturers are already lurking in the shadows. One of them is Sandoz, a division of Novartis that will soon be spun off as a stand-alone company. Sandoz recently reported positive results from a phase 3 clinical trial for its biosimilar version of Eylea; it plans to submit regulatory applications in the U.S. and Europe "in the coming months."
That's in addition to stiff competition from Roche's Vabysmo, a competing therapy for AMD approved last year that has been making headway. However, Eylea has a plan to deal with these challenges. The company recently received approval from the FDA for a high-dose formulation of Eylea that will allow it to deal with both aforementioned issues. The high-dose version of Eylea won't run out of patent exclusivity next year.
Further, it requires fewer annual doses than the original version, which is one of the appeals of Roche's Vabysmo.
Regeneron's other blockbuster looks promising
Regeneron can rely on another medicine to move its top line in the right direction, namely Dupixent, a treatment for eczema it co-markets with Sanofi. Dupixent's momentum isn't slowing. In the second quarter, its total sales came in at $2.8 billion, 33% higher than the year-ago period. Dupixent's most important patents won't expire in the U.S. until the early 2030s. And in the meantime, it should add some label expansions.
Regeneron and Sanofi are targeting a new indication for Dupixent in treating chronic obstructive pulmonary disease. This indication could add more than $1 billion in sales to the medicine's annual total. Dupixent is also undergoing a study as a potential treatment for targeting ulcerative colitis. Regeneron has about 35 programs in its pipeline in total, so there will be many more new approvals and label expansions on the horizon.
Regeneron's financial results have been on the rise over the past decade, with an abnormal jump during the pandemic years as it made money from its COVID-19 antibody, REGEN-COV, which has since lost steam.
REGN Revenue (Quarterly) data by YCharts
Given the company's lineup and pipeline, Regeneron should continue delivering solid financial and stock market performances. That's why it is still worth buying shares of this biotech stock.
