Could Regeneron Pharmaceuticals Inc (NASDAQ:REGN) be in trouble? One sidelined analyst fears competition from rival Roche could present a challenge to the biotech player.
Why could Roche’s initially reassuring results for its wet age-related macular degeneration (wet AMD) and diabetic macular edema (DME) asset RG7716 bode poorly for Regeneron? Keep in mind, Regeneron has developed its own eye injection EYLEA, meaning there could be pressure in wet AMD and DME eye markets.
Accordingly, BTIG analyst Dane Leone chimes in with a cautious perspective following datasets from RUBY and ONYX studies presented at the Angiogenesis, Exudation, and Degeneration 2018 conference last weekend.
“Regeneron had previously announced that the studies ‘failed’ during November 2017, but the outcomes of studies remain relevant as Roche […] is currently developing a bispecific antibody (RG7716) with the same mechanism of action, dual inhibition of VEGF/ ANG2. Overall, we think that the anatomical endpoint improvements of the RUBY and ONYX studies, coupled with the positive Phase II dataset from BOULEVARD for RG7716, generally are supportive of VEGF/ ANG2 as a novel approach for the treatment of wetAMD and DME. We remain Neutral on REGN, as RG7716 early results seem promising and could pose a significant risk to the outlook of REGN’s Eylea during 2022/2023,” Leone explains.
Rival Roche anticipates presenting its wet AMD Phase II trials later this year. Ultimately, “If a several letter BCVA advantage can be replicated within AVENUE or STAIRWAY, the potential disruption could be larger to our current Eylea sales forecasts, as wetAMD accounts for ~57% of our 2017 estimated US Eylea revenue breakdown,” warns Leone.
As such, the analyst reiterates a Neutral rating on REGN stock without listing a price target. (To watch Leone’s track record, click here)
TipRanks indicates mostly positive sentiment making its rounds through the Street on the drug maker. Out of 21 analysts polled in the last 3 months, 9 are bullish on REGN stock, 11 remain sidelined, while 1 is bearish on the stock. With a healthy return potential of nearly 37%, the stock’s consensus target price stands at $443.26.