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Regeneron (REGN) to Report Q1 Earnings: What's in Store?

Zacks Equity Research

Regeneron Pharmaceuticals, Inc. REGN is scheduled to release first-quarter 2019 results on May 7, before the opening bell.

In the last reported quarter, the company beat earnings expectations by 20.2%. The company’s track record is excellent. In the last four quarters, the company surpassed earnings estimates by an average of 13.1%. Let’s see how things are shaping up for the to-be-reported quarter.

Regeneron Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

 

Regeneron Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | Regeneron Pharmaceuticals, Inc. Quote

 

Factors Influencing This Quarter

Regeneron’s key growth driver, Eylea, continues to maintain momentum and should boost growth in the first quarter. Eylea, developed in collaboration with Bayer AG BAYRY, is approved in the United States, the EU, Japan and other countries for the treatment of neovascular age-related macular degeneration (wet AMD), diabetic macular edema (DME), and macular edema following retinal vein occlusion, which includes macular edema following central retinal vein occlusion and macular edema following branch retinal vein occlusion.

Meanwhile, Regeneron is working on expanding Eylea’s label into additional indications, which should further boost sales.  In August 2018, the FDA approved a 12-week dosing interval of Eylea injection in patients with wet age-related macular degeneration (wet AMD) based on physician's assessment. The FDA also accepted for review the supplemental Biologics License Application (sBLA) of Eylea for the treatment of diabetic retinopathy, with a target action date of May 13, 2019.

Apart from Eylea’s performance and label-expansion efforts, investors will be focussing on the uptake of Dupixent and its label expansion efforts.

Strong Dupixent sales drove Regeneron’s impressive sales in 2018 and we expect the momentum to continue in the first quarter as well. The uptake of the drug has been strong after it obtained approval last year for the treatment of adults with moderate-to-severe atopic dermatitis (AD). The company and partner Sanofi are also working to expand Dupixent’s label, which should diversify the company’s revenue base and reduce dependence on the lead drug.

Dupixent was approved for the treatment of adolescent patients aged 12-17 years with moderate-to-severe atopic dermatitis in March 2019. The European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) has given a positive opinion for Dupixent (dupilumab) for the indication of asthma.

Kevzara, an anti-interleukin (IL)-6 receptor monoclonal antibody used for the treatment of adult patients with moderately to severely active rheumatoid arthritis, was approved by the FDA in May 2017. The uptake of the drug has been encouraging so far. Investors will focus on Kevzara’s sales as well in the upcoming quarterly results.

Apart from these drugs, investors will also focus on the performance of PCSK9 inhibitor, Praluent and Libtayo. Sanofi and Regeneron Pharmaceuticals announced a 60% cut in the U.S. list price of Praluent in February 2019. This should boost sales in the first quarter.

Moreover, the European Commission (EC) has approved a label expansion of Praluentto to reduce cardiovascular (CV) risk in adults with established atherosclerotic CV disease (ASCVD) by lowering low-density lipoprotein cholesterol (LDL-C) levels as an adjunct to correction of other risk factors.

Investors are also expected to await updates on the company’s pipeline, which includes its collaboration agreement with Alnylam Pharmaceuticals, Inc. ALNY.

Share Price Performance

Regeneron’s stock has lost 10.6% in the year so far against the industry’s growth of 2.8%.

Earnings Whispers

Our proven model does not conclusively show that Regeneron is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen.

Earnings ESP: The company’s Earnings ESP is -0.74%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Regeneron has a Zacks Rank #3. Although the rank is favorable, the company’s negative ESP makes surprise prediction difficult.

We caution against the stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

A Stock That Warrants a Look

Here is  a healthcare stock you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Horizon Pharma HZNP has an Earnings ESP of +25.00% and a Zacks Rank #3. The company is scheduled to release first-quarter results on May 8. You can see the complete list of today’s Zacks #1 Rank stocks here.

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Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report
 
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