Regeneron (REGN) to Report Q4 Earnings: What's in the Cards?
Regeneron Pharmaceuticals, Inc. REGN is scheduled to release fourth-quarter 2023 results on Feb 2, before the opening bell.
The company has an impressive track record, with an earnings beat in each of the last four quarters. In the last reported quarter, it beat earnings expectations by 7.31%. REGN surpassed earnings estimates by 12.34%, on average.
Regeneron Pharmaceuticals, Inc. Price, Consensus and EPS Surprise
Regeneron Pharmaceuticals, Inc. price-consensus-eps-surprise-chart | Regeneron Pharmaceuticals, Inc. Quote
Factors to Note
A significant chunk of Regeneron’s revenues comes from the sales of its lead drug, Eylea, which is approved for various ophthalmology indications (neovascular age-related macular degeneration, diabetic macular edema [“DME”] and macular edema, among others). Eylea was developed in collaboration with Bayer AG.
Regeneron records net product sales of Eylea in the United States, while Bayer records net product sales of the drug outside the country. Regeneron also records its share of profits/losses in connection with Eylea sales outside the United States.
Earlier this month, Regeneron announced that Eylea sales came in at $1.34 billion in the United States and Eylea HD sales came in at $123 million in the fourth quarter of 2023. This was the first full quarter for Eylea HD following its launch.
Eylea’s sales have been under pressure in the last few quarters due to competition from Avastin and Vabysmo and sale deductions.
In August 2023, the FDA finally approved aflibercept 8 mg for the treatment of patients with wet age-related macular degeneration, DME and diabetic retinopathy under the brand name Eylea HD.
Apart from Eylea, investors will focus on the asthma drug Dupixent’s performance, sales of which are recorded by Sanofi SNY. Regeneron has a collaboration agreement with Sanofi for drugs like Dupixent and Kevzara.
While Sanofi records sales, Regeneron records its share of profits/losses in connection with the global sales of Dupixent and Kevzara. Profits from Dupixent sales have been REGN’s primary growth driver in the last few quarters. Per Sanofi, Dupixent is expected to cross the €10 billion mark in 2023 on a reported basis.
Dupixent has maintained its stellar performance, driven by continued strong demand in the approved indications, including atopic dermatitis, asthma, chronic rhinosinusitis with nasal polyposis, eosinophilic esophagitis and prurigo nodularis. The label expansion of the drug in the past few months has boosted sales further and is likely to have resulted in incremental revenues in the fourth quarter. Hence, Regeneron is expected to have recorded incremental profits in the yet-to-be-reported quarter.
Investors will focus on the performance of Libtayo and the PCSK9 inhibitor Praluent. Effective Jul 1, 2022, Regeneron started recording net product sales of Libtayo and pays Sanofi a royalty on such sales. Increased sales of Libtayo for non-melanoma skin indications, coupled with increased utilization in both monotherapy and chemotherapy combination settings in lung cancer, have most likely boosted the top line. The Zacks Consensus Estimate for Libtayo’s sales is pegged at $216 million.
Regeneron records net product sales of Praluent in the United States. Sanofi records net product sales of the drug outside the United States and pays Regeneron a royalty on such sales.
Recent Updates
Regeneron and partner Sanofi recently announced that the FDA has approved Dupixent for the treatment of pediatric patients aged 1 to 11 years, weighing at least 15 kg, with eosinophilic esophagitis.
Regeneron announced that it will assume full development and commercialization rights for 2seventy bio’s preclinical and clinical stage cell therapy pipeline. The company also announced the formation of Regeneron Cell Medicine for this acquisition to advance the next generation of cell therapies and to explore combinations with Regeneron’s proprietary antibodies and bispecifics.
Share Price Performance
Regeneron’s shares have gained 29.9% in the past six months compared with the industry’s rise of 2.4%.
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What Our Model Predicts
Our proven model does not conclusively predict an earnings beat for Regeneron this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: Earnings ESP for REGN is -3.28%, as the Zacks Consensus Estimate is currently pegged at $10.46 per share and the Most Accurate Estimate is pegged at $10.12 per share. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #2.
Stocks to Consider
Here are some drug/biotech stocks that you may want to consider, as our model shows that they have the right combination of elements to post an earnings beat this season.
Sarepta Therapeutics SRPT has an Earnings ESP of +52.45% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
SRPT topped earnings estimates in each of the last four quarters, with an earnings surprise of 48.67%, on average. Shares of Sarepta have gained 10.8% in the past six months.
Amgen AMGN has an Earnings ESP of +1.01% and a Zacks Rank #3.
Amgen beat earnings estimates in each of the trailing four quarters. AMGN delivered an earnings surprise of 6.04%, on average. Its shares have surged 35.6% in the past six months.
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