Regeneron Pharma (REGN) has now announced the pricing of the underwritten public secondary offering of 11,831,496 shares of its common stock held by French drugmaker Sanofi at a price of $515 per share.
Regeneron has also agreed to purchase 9,806,805 shares directly from Sanofi, at a price of $509.85 per share (representing the price paid by the underwriters in the offering), for an aggregate purchase amount of $5 billion.
In connection with the offering, the underwriters have a 30-day option to purchase up to an additional 1,183,150 Regeneron shares from Sanofi, the statement revealed. If the underwriters fully exercise their option to purchase additional shares, following the offering and share repurchase by Regeneron, Sanofi will have disposed of all of its shares, other than 400,000 shares it intends to retain.
Regeneron will not receive any of the proceeds from the sale of shares in this offering, the company said. The offering will occur simultaneously in the United States and internationally through underwriters led by BofA Securities and Goldman Sachs as joint book-running managers.
Shares in the biotech giant are currently trading at $545, after surging 45% year-to-date as investors grow more confident in its experimental antibody cocktail for Covid-19. “Progress on the development of a COVID-19 antibody cocktail remains on track – and a source of substantial investor interest” notes JP Morgan analyst Cory Kasimov.
He has a hold rating on the stock and low $429 price target, writing that “Although we admittedly missed a great opportunity in REGN (shares up 50%+ YTD), we are finding it difficult to pull additional levers in our DCF model based on available data.”
Overall, REGN shows a cautiously optimistic Moderate Buy analyst consensus, with a $559 average price target indicating 2.5% upside potential in the coming 12 months. (See Regeneron stock analysis on TipRanks).
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