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Regeneron (REGN) Q1 Earnings & Sales Top, Eylea Sales Decline

Regeneron Pharmaceuticals, Inc. REGN delivered better-than-expected first-quarter 2023 results even though lead drug Eylea sales declined. Dupixent maintained its stellar performance driven by continued strong demand in the approved indications, atopic dermatitis (AD), asthma, chronic rhinosinusitis with nasal polyposis (CRSwNP), eosinophilic esophagitis and prurigo nodularis.

Regeneron’s shares have gained 11.3% in the year so far against the industry’s decline of 6.2%.

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Zacks Investment Research


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Regeneron reported first-quarter earnings of $10.09 per share, comfortably beating the Zacks Consensus Estimate of $9.25. The year-ago quarter recorded earnings per share of $11.49.

Total revenues in the reported quarter were up 7% year over year to $3.2 billion, beating the Zacks Consensus Estimate of $2.9 billion.

Quarterly Highlights

Lead drug Eylea’s sales in the United States were $1.4 billion, down 6% year over year, primarily due to an increase in sales-related deductions. Please note that Regeneron co-developed Eylea with the HealthCare unit of Bayer AG BAYRY. Eylea’s sales also missed the Zacks Consensus Estimate of $1.5 billion.

Regeneron records net product sales of Eylea in the United States and 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 include collaboration revenues of $1.4 billion from Sanofi (SNY), Bayer and Roche RHHBY, up from $1.2 billion in the year-ago quarter. Sanofi’s collaboration revenues increased by 26% to $798 million, driven by profits associated with higher Dupixent sales. We note that Sanofi records global net product sales of Dupixent and Kevzara, while Regeneron records its share of profits/losses in connection with global sales of both drugs. Dupixent’s sales surged 37% year over year to $2.5 billion.

Bayer’s collaboration revenues came in at $357 million, down 7% from the year-ago quarter. Roche’s collaboration revenues totaled $222 million, up 3% from the year-ago quarter.

Regeneron records net product sales of Praluent in the United States and Sanofi records net product sales of Praluent outside the United States and pays the company a royalty on such sales. Regeneron records net product sales of REGEN-COV in connection with its agreements with the U.S. government, while its partner Roche records net product sales of the antibody cocktail outside the United States. The companies share gross profits from global sales based on a pre-specified formula.

Prior to Jul 1, 2022, Regeneron recorded net product sales of Libtayo in the United States and Sanofi recorded net product sales of Libtayo outside the United States. Effective Jul 1, 2022, Regeneron records global net product sales of Libtayo outside the United States and pays a royalty to Sanofi on such sales.

Total Libtayo sales came in at $182.6 million, up 46%. Praluent’s global net sales totaled $145.9 million in the reported quarter, up from 31% year over year. Kevzara recorded sales of $78.5 million, down 26% from the year-ago quarter.

REGEN-COV, its antibody cocktail for COVID-19, generated total sales of $613.2 million in the quarter outside of the United States, down 4%.

In January 2022, the FDA revised the authorizations for a few monoclonal antibody treatments, including Regeneron’s REGEN-COV, as data indicated that these treatments were not active against the Omicron variant. Therefore, REGEN-COV is currently not authorized for use in the U.S. states, territories or jurisdictions.

Adjusted R&D expenses jumped 28% to $960 million, while SG&A expenses increased 32% to $515 million in the year-ago quarter.

Pipeline and Regulatory Update

The FDA accepted for priority review the biologics license application (BLA) seeking approval of aflibercept 8 mg for treating wet AMD, DME and diabetic retinopathy with a target action date of June 27, 2023. A regulatory application has also been submitted for the treatment of wet AMD and DME in the European Union (EU) and Japan.

In February 2023, the FDA approved Eylea for the treatment of retinopathy of prematurity (ROP) in preterm infants.

In January 2023, the European Commission (EC) approved Dupixent for the treatment of adults and adolescents with eosinophilic esophagitis (EoE).

Last month, the EC approved Libtayo (cemiplimab) in combination with platinum-based chemotherapy for the first-line treatment of adult patients with advanced NSCLC with ≥1% PD-L1 expression.

 

Regeneron Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

Regeneron Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Regeneron Pharmaceuticals, Inc. Quote

Our Take

Regeneron’s first-quarter results beat estimates, but Eylea’s sales declined. The company should benefit from Dupixent’s continued label expansions and solid demand. The potential approval of aflibercept 8 mg will be a great boost to the company. The company’s progress with the oncology portfolio is also impressive.

Regeneron currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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