Regeneron (REGN) Q3 Earnings Beat, REGEN-COV Boosts Growth
Regeneron (REGN) beats on Q3 earnings while sales record strong year-over-year growth on the solid performance of Dupixent and Eylea, and incremental contribution from REGEN-COV.
Regeneron Pharmaceuticals, Inc. REGN posted better-than-expected third-quarter 2021 results, beating on both earnings and sales driven by strong growth in Eylea and Dupixent. Contribution from its antibody cocktail for COVID-19 also boosted the top line.
Regeneron’s shares have gained 35% in the year so far against the industry’s decline of 6.8%.
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Regeneron reported third-quarter earnings of $15.37 per share, comfortably beating the Zacks Consensus Estimate of $9.81. Earnings jumped 84% from the year-ago quarter due to higher sales.
Total revenues in the reported quarter surged 51% year over year to $3.4 billion and beat the Zacks Consensus Estimate of $2.7 billion. The year-over-year growth was driven by incremental contribution from the antibody cocktail, REGEN-COV (a cocktail of two monoclonal antibodies — casirivimab and imdevimab), for COVID-19. Total revenues, excluding REGEN-COV, increased 18% to $2.6 billion.
Lead drug Eylea’s sales in the United States were $1.5 billion compared with $1.3 billion in the year-ago quarter. Please note that Regeneron co-developed Eylea with the HealthCare unit of Bayer AG BAYRY. Regeneron records net product sales of Eylea in the United States. Bayer records net product sales of Eylea outside the United States. Regeneron records its share of profits/losses in connection with sales of Eylea outside the United States.
Total revenues also included collaboration revenues of $1.074 billion from Sanofi SNY, Bayer, and Roche RHHBY, up from $653 million in the year-ago quarter. Sanofi’s collaboration revenues amounted to $581.8 million, up from $353.3 million. Bayer’s collaboration revenues came in at $365 million, up from $299.9 million in the year-ago quarter. Roche’s collaboration revenues for REGEN-COV came in at $127.1 million.
Sanofi records global net product sales of Dupixent, Kevzara, and ZALTRAP. Regeneron records its share of profits/losses in connection with global sales of Dupixent and Kevzara, and Sanofi pays the company a percentage of net sales of ZALTRAP. Regeneron records net product sales of Libtayo in the United States and Sanofi records the same outside the country.
Dupixent’s sales surged to $1.7 billion from $1.1 billion in the year-ago quarter. Libtayo sales in the United States came in at $78.4 million, up from $71.6 million. Kevzara recorded sales of $97.8 million, up from $70 million.
Praluent’s global net sales totaled $114.5 million in the reported quarter, up from $91.5 million in the prior-year quarter. Effective Apr 1, 2020, Regeneron records net product sales of Praluent in the United States and Sanofi records the same outside the country and pays the former a royalty on such sales.
REGEN-COV, its antibody cocktail for COVID-19, generated total sales of $1.2 billion in the quarter. Sales in the United States came in at $676.7 million.
R&D expenses decreased to $592.3 million from $628.7 million while SG&A expenses jumped to $390.7 million from $291 million in the year-ago quarter.
The FDA accepted for priority review the biologics license application (BLA) for COVID-19 treatment in non-hospitalized patients and as prophylaxis in certain individuals, with a target action date of Apr 13, 2022. A Marketing Authorization Application (MAA) for COVID-19 treatment in infected non-hospitalized patients or as prophylaxis was also submitted in the EU.
In September 2021, a phase III study in patients hospitalized with COVID-19 met its primary endpoint, showing REGEN-COV significantly reduced the viral load. The FDA is currently reviewing the company's request to expand the Emergency Use Authorization (EUA) to include treatment in hospital settings. Regeneron also plans to submit a BLA and MAA for this patient population in the coming months.
Pipeline and Regulatory Update
In October 2021, the FDA approved Dupixent for children aged six to 11 years with moderate-to-severe asthma.
The FDA accepted for priority review the sBLA for Libtayo to treat patients with recurrent or metastatic cervical cancer whose disease progressed on or after chemotherapy. The target action date is Jan 30, 2022.
Regeneron Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Regeneron’s third-quarter results were strong with broad-based growth. Strong demand for Eylea and Dupixent maintained momentum for the company. Incremental contribution from REGEN-COV has boosted the top line significantly and should propel sales as the pandemic continues. Continued growth in Eylea and Dupixent through further penetration in existing indications and a promising late-stage pipeline set the momentum for growth. The approval of Libtayo in the lucrative indication of NSCLC and BCC should further boost the sales of the drug in the upcoming quarters.
Regeneron currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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