As far as stock market action goes, there’s almost nothing like the impact of results from a drug’s clinical trial. It’s an equation that works both ways; negative data will send shares crashing but a positive readout will make investors very happy indeed.
Accordingly, there were smiles all around last week for those backing Regeneron (REGN) after the company announced that its eye drug Eylea (generically called aflibercept) met the primary endpoint in two late-stage studies.
Specifically, the drug was being tested as a treatment for patients with diabetic macular edema and wet age-related macular degeneration and the results showed that higher dosages (8 mg compared to the already approved 2 mg) work just as well over longer dosing intervals (16 weeks compared to 8 weeks). With less frequent injections, the 8 mg dose not only improved vision, but also showed a safety profile akin to that demonstrated by the lower dose.
As the market’s reaction showed (shares surged by 19% since the announcement), Oppenheimer’s Hartaj Singh thinks the readout will finally put to rest any doubts investors had regarding the drug’s potential.
“Investors had been eagerly — and nervously — waiting for these results, as there has been much apprehension around increased competition and any potential safety signals (as seen in some competitors,” Singh said. “However, the strength of the readout should belay concerns… and should restore Eylea’s growth profile.”
Not only does Singh highlight the fact the drug displayed a better safety profile than competitor Roche’s faricimab (Vabysmo) – launched in 1Q22 – but the analyst also thinks the Street’s forecast for Eylea sales is too low.
“We have 2024 WW Eylea sales of $13B (vs. Bloomberg $9.5B), as we expect Eylea High Dose (EHD) to retain Eylea’s leading market share in wAMD and DME, and competing branded products relegated to fighting for market share from compounded Avastin and biosimilars,” the analyst explained.
For Singh, the results merit a new price target; the figure is bumped from $775 to $900, which makes room for one-year share appreciation of ~27%. Singh’s rating naturally stays at Outperform (i.e., Buy). (To watch Singh’s track record, click here)
Overall, the Street’s take is not quite as conclusive; with an almost evenly split 11 Buys vs. 8 Holds, the stock claims a Moderate Buy consensus rating. Going by the $755.06 average target, the shares are expected to climb ~6% from current levels. (See Regeneron stock forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
