Regeneron (REGN) Q4 Earnings & Sales Beat, Eylea Sales Decline
Regeneron Pharmaceuticals, Inc. REGN delivered better-than-expected fourth-quarter 2022 results even though Eylea sales declined. Dupixent maintained its stellar performance, with progress on launches in pediatric atopic dermatitis, eosinophilic esophagitis and prurigo nodularis.
Regeneron’s shares have gained 21% in the past year against the industry’s decline of 8.1%.
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Regeneron reported fourth-quarter earnings of $12.56 per share, comfortably beating the Zacks Consensus Estimate of $9.68. The year-ago quarter recorded earnings per share of $23.42 due to higher sales.
Total revenues in the reported quarter were down 31% year over year to $3.4 billion, beating the Zacks Consensus Estimate of $3.2 billion. Excluding REGEN-COV (a cocktail of two monoclonal antibodies — casirivimab and imdevimab) for COVID-19, sales increased 14%.
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 U.S. states, territories or jurisdictions.
Lead drug Eylea’s sales in the United States were $1.5 billion, down 3% year over year. Please note that Regeneron co-developed Eylea with the HealthCare unit of Bayer AG BAYRY. Sales were negatively impacted by a short-term shift to off-label use of Avastin (bevacizumab), a temporary closing in the fourth quarter of 2022 of a not-for-profit fund that provides patient co-pay assistance and an increase in sales-related deductions.
Eylea sales also missed the Zacks Consensus Estimate of $1.7 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 also included collaboration revenues of $1.6 billion from Sanofi SNY, Bayer and Roche RHHBY, up from $890.3 million in the year-ago quarter. Sanofi’s collaboration revenues increased 61% to $836 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. Bayer’s collaboration revenues were $355 million, down from $372 million. Roche’s collaboration revenues totaled $396 million compared with negligible sales in 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 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.
Dupixent’s sales surged to $2.4 billion from $1.8 billion in the year-ago quarter. Total Libtayo sales were $168.8 million, up from $121 million. Praluent’s global net sales totaled $133.4 million in the reported quarter, up from $102.6 million in the prior-year quarter. Kevzara recorded sales of $81.2 million, down from $103.9 million.
REGEN-COV, its antibody cocktail for COVID-19, generated total sales of $1.1 billion in the quarter outside of the United States, down 62%. There were no sales of REGEN-COV in the United States during 2022, as Regeneron completed its final deliveries of drug product under its agreements with the U.S government as of Dec 31, 2021.
Adjusted R&D expenses jumped to $910.7 million from $634.7 million, while SG&A expenses increased to $578.6 million from $495.4 million in the year-ago quarter.
Revenues in 2022 were $12.2 billion, down from $16.1 billion in 2021 but comfortably surpassing the Zacks Consensus Estimate of $11.8 billion. Adjusted earnings per share were $44.98, down from $74.35 recorded in 2021 but topping the Zacks Consensus Estimate of $42.49.
Regeneron Pharmaceuticals, Inc. Price and Consensus
Regeneron Pharmaceuticals, Inc. price-consensus-chart | Regeneron Pharmaceuticals, Inc. Quote
Pipeline and Regulatory Update
The primary endpoints were achieved in two trials investigating aflibercept 8 mg with 12 and 16-week dosing regimens in patients with diabetic macular edema (DME) and neovascular age-related macular degeneration (wet AMD). The PHOTON trial in DME and the PULSAR trial in wet AMD both demonstrated that aflibercept 8 mg 12- and 16-week dosing regimens achieved non-inferiority in vision gains compared to the Eylea 8-week dosing regimen.
A biologics license application (BLA) for the treatment of wet AMD and DME was submitted to the FDA in December 2022. Regeneron is utilizing a priority review voucher in connection with the submission.
In December 2022, the European Commission (EC) approved Eylea for the treatment of retinopathy of prematurity (ROP) in preterm infants. The FDA is currently reviewing the supplemental BLA (sBLA) for Eylea to treat ROP in preterm infants, with a target action date of Feb 11, 2023.
In December 2022, the EC approved Dupixent for the treatment of adult patients with moderate-to-severe prurigo nodularis who are candidates for systemic therapy.
In November 2022, the FDA approved the label expansion of Libatayo in combination with platinum-based chemotherapy for the first-line treatment of adult patients with advanced NSCLC.
Regeneron’s fourth-quarter results beat estimates. But the disruption in Eylea sales is concerning. The company should benefit from Dupixent’s continued label expansions and solid demand. A 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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