Regeneron Pharma (REGN) and Roche (RHHBY) have announced that they will work together to develop, manufacture and distribute REGN-COV2, Regeneron’s investigational anti-viral antibody cocktail, to people around the globe.
According to the statement, REGN-COV2 could provide a treatment option for people already experiencing symptoms of COVID-19, and has the potential to prevent infection in people exposed to the virus.
This collaboration is expected to increase supply of REGN-COV2 to at least three and a half times the current capacity, with the potential for even further expansion, the companies said.
REGN-COV2 is currently being studied in two Phase 2/3 clinical trials for the treatment of COVID-19 and in a Phase 3 trial for the prevention of COVID-19 in household contacts of infected individuals.
If it proves safe and effective in clinical trials and regulatory approvals are granted, Regeneron will distribute and record sales for REGN-COV2 in the U.S. and Roche will be responsible for distribution outside the U.S.
“We are excited about the potential for one medicine to serve both as a treatment for those infected as well as protection for people exposed to the virus. REGN-COV2 could be a critical line of defense against the COVID-19 pandemic,” said Bill Anderson, CEO of Roche.
Under the terms of the agreement, each company has committed to dedicate a certain manufacturing capacity to REGN-COV2 each year, and the technology transfer process has already begun.
Each company will bear its own distribution expenses in their designated territories, and will jointly fund the ongoing Phase 3 prevention and Phase 1 healthy volunteer safety studies, as well as any additional REGN-COV2 global studies.
Roche will be primarily responsible for securing regulatory approvals outside the U.S., following the initial European Medicines Agency (EMA) approval, and conducting any additional studies specifically required for approval by regulators outside the U.S.
In order to develop the antibody cocktail, Regeneron evaluated thousands of fully-human antibodies produced by the company’s mice, which have been genetically-modified to have a human immune system, as well as antibodies from humans who have recovered from COVID-19.
The two potent, virus-neutralizing antibodies that form REGN-COV2 bind non-competitively to the critical receptor binding domain of the virus’s spike protein, diminishing the ability of mutant viruses to escape treatment and protects against spike variants in the human population.
Shares in Regeneron have soared over 60% year-to-date, and analysts have a cautiously optimistic Moderate Buy consensus on the stock’s outlook. That’s alongside an average analyst price target of $654 indicating upside potential of just 6% from current levels.
JP Morgan’s Cory Kasimov reiterated his hold rating on the stock after Regeneron reported a straightforward 2Q with a top and bottom line beat. He noted that progress on the development of a COVID-19 antibody cocktail remains on track with initial results expected in September.
“In the near-to-intermediate term, we expect focus to be on COVID-19 development efforts, Eylea / Dupixent trends, and to better understand the potential of the company’s emerging IO platform (with a specific focus on Libtayo’s opportunity in NSCLC and upcoming bispecific updates)” Kasimov wrote.
“While REGN continues to execute well, valuation forms the basis of our Neutral rating” the analyst concluded. (See Regeneron stock analysis on TipRanks).
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