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Regeneron Touches 52-Week High

Zacks Equity Research

Shares of  Regeneron Pharmaceuticals Inc. (REGN) soared to a 52-week high of $201.35 towards the end of the trading session on Apr 10, 2013. This follows the company’s solid performance over the last few quarters. The stock ended trading on that day at $201.35.

The company has seen its share price continuously move up over the last few quarters based on its improving financials, primarily driven by strong sales of eye drug Eylea. This is reflected in the highly impressive 1-year return of 71.9%.

Regeneron has delivered positive earnings surprises in each of the last four quarters with a massive average beat of 117.5%. The long-term expected earnings growth rate for this stock is 34.6%.

Solid Fourth Quarter with Upbeat Guidance

On Feb 14, 2013 Regeneron reported fourth quarter 2012 adjusted earnings per share of $1.21, which breezed past the Zacks Consensus Estimate of $1.07. The company had suffered an adjusted loss of 54 cents per share in the year-ago quarter. Higher revenues boosted earnings in the final quarter of 2012.

Total revenues in the quarter soared 237% to $415 million, driven by strong sales of Eylea. This was the fourth full quarter of the drug in the market. Eylea was launched in the US in Nov 2011 for treating patients suffering from the neovascular form of age-related macular degeneration. The EU approval of Eylea in Nov 2012 for the same indication is also encouraging. In Sep 2012, the label of the drug was successfully expanded in the US to treat patients suffering from macular edema following central retinal vein occlusion.

Encouraged by the strong performance, the company forecast Eylea sales to increase 50% in 2013 over the $838 million recorded in 2012.  Consequently, 2013 sales are expected in the range of $1.2–$1.3 billion.

Zaltrap Holds Promise

Zaltrap, co-developed with Sanofi (SNY), is another promising drug in Regeneron’s product portfolio. Zaltrap gained US approval in early Aug 2012 for treating previously treated patients suffering from metastatic colorectal cancer. As per Sanofi, sales of Zaltrap were $23 million in the fourth quarter of 2012.

The EU approval of Zaltrap for the same indication in Feb 2013 is another positive for Regeneron.

Other Stocks to Consider

In spite of the multiple positive events mentioned above, Regeneron, a biopharmaceutical company, carries a Zacks Rank #3 (Hold). Biopharmaceutical companies with a favorable Zacks Rank include UCB SA (UCBJF) and Athersys Inc. (ATHX). Both stocks carry a Zacks Rank #1 (Strong Buy) and are worth accumulating now.

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Read the Full Research Report on REGN

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