Regeneron Pharmaceuticals, Inc
.
REGN
is scheduled to release fourth-quarter 2021 results on Feb 4, before the opening bell.
The company has an impressive track record. In the last reported quarter, it beat earnings expectations by 56.68%. It surpassed earnings estimates by 28.93%, on average, in the last four quarters.
Regeneron Pharmaceuticals, Inc. Price and EPS Surprise
Regeneron Pharmaceuticals, Inc. price-eps-surprise
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Regeneron Pharmaceuticals, Inc. Quote
What Our Model Predicts
Our proven model does not predict an earnings beat for Regeneron this season. The combination of a positive
Earnings ESP
and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our
Earnings ESP Filter
. That is not the case here.
Earnings ESP
: Earnings ESP of Regeneron is 0.00%, as both the Zacks Consensus Estimate and the Most Accurate Estimate stand at $18.70.
Zacks Rank
: It currently carries a Zacks Rank #2.
Factors at Play
A major chunk of Regeneron’s revenues comes from the sales of its key drug, Eylea, which is approved for various ophthalmology indications (neovascular age-related macular degeneration, diabetic macular edema and macular edema, among others). Eylea was developed in collaboration with Bayer AG.
Regeneron records net product sales of Eylea in the United States, while Bayer records net product sales of the drug outside the country. Regeneron also records its share of profits/losses in connection with sales of Eylea outside the United States.
Eylea sales in the previous quarter came in at $1.47 billion in the United States. Sales in the fourth quarter are likely to have witnessed sequential growth with the normalizing of demand. The Zacks Consensus Estimate for Eylea sales in the United States is pegged at $1.53 billion.
Apart from Eylea, investors will focus on the asthma drug Dupixent’s performance and additional label expansions, sales of which are recorded by
Sanofi
SNY
. Regeneron has a collaboration agreement with Sanofi for drugs like Dupixent and Kevzara. While sales are recorded by Sanofi, Regeneron records its share of profits/losses in connection with global sales of Dupixent and Kevzara. Revenues from Dupixent sales have been the company’s primary growth driver in the last few quarters.
Dupixent has maintained its stellar performance on continuous label expansion all through, and the trend is expected to have continued in the to-be-reported quarter. Total sales in the last quarter came in at $1.7 billion. Label expansion of the drug in the last few months is likely to have boosted sales further and resulted in incremental revenues for Regeneron. The Zacks Consensus Estimate for Dupixent sales is pegged at $1.32 billion.
Investors will focus on the performance of PCSK9 inhibitor, Praluent, and Libtayo. Regeneron records net product sales of Libtayo in the United States, and Sanofi records net product sales of the drug outside the country. Both the companies equally share profits/losses in connection with global sales of Libtayo. Sales of Libtayo came in at $78.4 million in the previous quarter in the United States. Sales are likely to have recorded sequential growth in the to-be-reported quarter on recent label expansions.
Effective Apr 1, 2020, Regeneron records net product sales of Praluent in the United States. Sanofi records net product sales of the drug outside the United States and pays Regeneron a royalty on such sales. Total sales in the previous quarter came in at $114.5 million. Praluent sales are likely to have recorded sequential growth in the fourth quarter.
Apart from these drugs, the company recorded sales of $676.7 million in the United States from REGEN-COV in the previous quarter. REGEN-COV is a cocktail of two monoclonal antibodies (casirivimab and imdevimab, also known as REGN10933 and REGN10987, respectively).
REGEN-COV received an Emergency Use Authorization from the FDA in November 2020 for the treatment of mild-to-moderate COVID-19 in adult and pediatric patients. In November, the European Commission approved the antibody cocktail. In July 2021, the FDA expanded the authorization for the cocktail for post-exposure prophylaxis in certain people exposed to a SARS-CoV-2 infected individual, or who are at high risk of exposure to an infected individual in an institutional setting.
Sales are expected to have recorded sequential growth in the to-be-reported quarter on expanded authorizations as cases continued to surge in the final quarter of the year.
Recent Updates
The FDA recently revised the authorization for two monoclonal antibody treatments, including REGEN-COV. Data showed that these treatments are highly unlikely to be active against the Omicron variant, which is spreading rapidly throughout the United States. Hence, the regulatory body has stated these treatments are no longer authorized for use in any U.S. states, territories and jurisdictions at this time. The agency also added that if patients in certain regions are likely to be infected or exposed to a variant susceptible to these treatments, then the treatments may be authorized in these regions. This will impact sales going forward. Hence, investors will be keen to know the impact of the same on the top-line in 2022.
Regeneron and Sanofi also announced the voluntary withdrawal of the supplemental biologics license application (sBLA) for Libtayo (cemiplimab-rwlc) as a second-line treatment for patients with advanced cervical cancer. The decision was made after the companies and the FDA were not able to align on certain post-marketing studies.
Share Price Performance
Regeneron’s shares have gained 23% in the past year against the
industry
’s decline of 38.8%.
Image Source: Zacks Investment Research
Stocks to Consider
Here are a couple of drug/biotech stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season.
Pfizer
PFE
has an Earnings ESP of +3.18% and a Zacks Rank #1. You can see
the complete list of today’s Zacks #1 Rank stocks here
.
Pfizer boasts a good track record, having topped earnings estimates in three of the last four quarters. Pfizer pulled off a four-quarter earnings surprise of 10.85%, on average.
Amgen
AMGN
has an Earnings ESP of +2.53% and a Zacks Rank #3.
Amgen topped earnings estimates in three of the last four quarters. Amgen delivered a four-quarter earnings surprise of 5.65%, on average.
Stay on top of upcoming earnings announcements with the
Zacks Earnings Calendar
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