Regeneron Aims HQ Expansion
Regeneron Pharmaceuticals (REGN) announced recently that it intends to expand its corporate headquarters and laboratories in Westchester County, New York. The move is expected to create more than 400 high-skill jobs.
The expansion is expected to result in the addition of two new buildings, boasting 300,000 square feet of laboratory and office space, to the Regeneron complex in Westchester County. Following the addition, Regeneron will occupy 85,000 square feet additional space in the complex.
The company currently occupies approximately 590,000 square feet there. The construction of the new buildings is expected to commence later this year. Regeneron expects the construction to be completed in 2015.
We believe that the expansion is aimed to support the continuous growth at Regeneron. The company, which employed around 682 employees in 2007, currently has an employee strength of 2000.
The company’s growth-engine is eye drug Eylea. Eylea was approved in the US in Nov 2011 for the neovascular form of age-related macular degeneration (wet AMD) indication. The drug has performed exceedingly well since launch. In Sep 2012, the US Food and Drug Administration (:FDA) approved the label expansion of Eylea for the macular edema following central retinal vein occlusion (:CRVO) indication.
Encouraged by the strong performance, the company forecast Eylea sales to increase 50% in 2013 over 2012 levels ($838 million). The FDA approval of oncology drug Zaltrap last year expanded the product portfolio at Regeneron. Zaltrap’s approval for the metastatic colorectal cancer indication is a major boost for Regeneron as the market represents significant commercial opportunity.
EU approval for the same indication came in Feb 2013. This has further strengthened the sales potential of the drug. The drug is under review in many other countries. We note that Regeneron has partnerships in place with Bayer’s (BAYRY) HealthCare unit and Sanofi (SNY) for Eylea and Zaltrap, respectively.
Moreover, the pipeline at Regeneron is also promising. The facility expansion seems to be a logical move for Regeneron in view of its strong product portfolio and an encouraging pipeline.
Regeneron, a biopharmaceutical company, carries a Zacks Rank #3 (Hold). Stocks such as Array BioPharma, Inc. (ARRY) appear to be more favorably placed in the biopharma space. The stock carries a Zacks Rank #2 (Buy).
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