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Chardan Rates Regeneron A Sell, Advises Caution

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Chardan Rates Regeneron A Sell, Advises Caution

Regeneron Pharmaceuticals Inc (NASDAQ: REGN) top line results from a mid-stage study of Eylea co-formulated with rinuccumab didn't meet its primary endpoint.

Chardan's Sell rating was predicated on risks surrounding the Praluent U.S. patent infringement case and Eylea's exposure to the theme of treatment burden reduction in wet AMD. Praluent, the anti-PCSK9 antibody, has a total market potential of $16.4 billion in 2020.

Related Link: Here's Why Ophthotech Is Trading Down On Regeneron's News

Eylea News Long-Term Negative

Eylea co-formulated with rinucumab didn't meet the primary endpoint of showing an improvement in best corrected visual acuity over Eylea monotherapy at 12 weeks in wet AMD. Chardan noted that the company plans to report additional data at a future medical conference. The firm believes the news is a long-term negative as Regeneron is exposed to what it expects could be a 2017 theme in wet AMD of treatment burden reduction.

Chardan said it repeatedly raised doubts over whether REGN2176-3 is flawed versus Ophthotech Corp's (NASDAQ: OPHT) Fovista and REGN2176-3 approach is better than using Eylea alone.

Hanging By A Thread On Praluent

On Praluent, the firm believes if Amgen, Inc.'s (NASDAQ: AMGN) patent on Repatha holds, then Sanofi SA (ADR) (NYSE: SNY)/Regeneron would have to cough up 10-20 percent as royalties, or roughly $750 million of operating income per year to Amgen. In the worst case, if Rengeneron has to completely give up on Praluent, the firm sees a $2 billion EBIT transfer.

Accordingly, the firm believes The Medicines Company (NASDAQ: MDCO)/Alnylam Pharmaceuticals, Inc. (NASDAQ: ALNY) have preferable profiles for investors seeking to access PCSK9 inhibitor market dynamics, due to the RNAi approach.

The firm's $325 price target on Regeneron is based on a probability-adjusted modeling of key franchises.

Latest Ratings for REGN

DateFirmActionFromTo
Nov 2019Initiates Coverage OnHold
Nov 2019UpgradesNeutralBuy
Nov 2019MaintainsMarket Perform

View More Analyst Ratings for REGN
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Posted-In: ChardanAnalyst Color Price Target Analyst Ratings Best of Benzinga

 

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