J.P. Morgan analyst Cory Kasimov was out today with a few insights on Regeneron Pharmaceuticals Inc (NASDAQ:REGN), after the drug maker announced, along with its partner Sanofi (NYSE:SNY), the receipt of a complete response letter (CRL) from the FDA for sarilumab, the company’s IL-6R antibody for the treatment of rheumatoid arthritis.
Kasimov noted, “While this is certainly a negative headline, we consider it to be somewhat anti-climactic following Sanofi’s disclosure this morning—in conjunction with its 3Q report—that the FDA identified manufacturing deficiencies at a fill/finish facility in France. The bottom line is that REGN is a name where Street models seemingly begin by assuming the bull case scenario for each key product. So while this delay doesn’t affect our ultimate opinion of sarilumab, it’s another hit to sentiment given that everyone assumed the therapy would be easily approved.”
“Given the data package and lack of safety/efficacy issues cited by the FDA, we still consider sari’s approval to be when, not if. Our model currently reflects eventual peak sales of ~$1.8B, but the dynamics in the RA market may necessitate a slow grind higher,” the analyst added.
Kasimov reiterated a Neutral rating on shares of Regeneron, with a price target of $477, which implies an upside of 34% from current levels.
As usual, we recommend taking analyst notes with a grain of salt. According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Cory Kasimov has a yearly average loss of 15.4% and a 24.4% success rate. Kasimov is ranked #4037 out of 4188 analysts.
Out of the 15 analysts polled by TipRanks (in the past 3 months), 5 rate Regeneron stock a Buy, 9 rate the stock a Hold and 1 recommends a Sell. With a return potential of nearly 30%, the stock’s consensus target price stands at $476.15.