Market Overview

Citi Downgrades Regeneron, Citing 'Underappreciated' Risk

Share:
Citi Downgrades Regeneron, Citing 'Underappreciated' Risk

Regeneron Pharmaceuticals Inc (NASDAQ: REGN) announced Monday the failure and discontinuation of two trials for angiopoietin2. Between this and rising rivals, Regeneron bears are emerging.

The Rating

Citigroup analyst Robyn Karnauskas downgraded Regeneron from Buy to Neutral and lowered the price target from $480 to $380.

The Thesis

Citigroup considers the threat of Novartis AG (ADR) (NYSE: NVS)’s RTH258 to Eylea sales underappreciated, particularly amid the Ang2 failure.

“We find it hard to believe that in current day and age RTH258 would not have a price impact, at minimum,” Karnauskas said in a Friday note, projecting a 25-percent price impact and 10-percent share impact. (See Karnauskas' track record here.) 

With RTH258 in the picture, Citigroup forecasts Regeneron striking just $380 per share. Unrivaled, it could break $490, the analyst said. 

The competitive setback to Eylea could be partially offset by Dupi sales, which Karnauskas anticipates generating $1.03 billion in 2018 against consensus estimates of $924 million. Physician surveys indicate an impending increase in prescriptions for both adults and adolescents.

“Given the bullish Dupi survey and unchallenged Eylea for next two years, investors may not worry just yet,” Karnauskas said. “However, we see RTH258 threat as real and do not see transformative catalysts near term. We like REGN long term as this is the only large cap company with self-sustainable innovation.”

Price Action

At the time of publication, Regeneron was trading up slightly at $364.60.

Related Links:

Regeneron Pharmaceuticals Gains A Bull Ahead Of Earnings

Regeneron Surrenders Most Early Gains After Q3 Beat

Latest Ratings for REGN

DateFirmActionFromTo
Oct 2019MaintainsHold
Sep 2019UpgradesNeutralBuy
Aug 2019UpgradesNeutralOutperform

View More Analyst Ratings for REGN
View the Latest Analyst Ratings

Posted-In: Citigroup Robyn KarnauskasAnalyst Color Downgrades Health Care Price Target Analyst Ratings General Best of Benzinga

 

Related Articles (REGN + NVS)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
YEXTMorgan StanleyMaintains15.0
WKMorgan StanleyMaintains42.0
RAMPMorgan StanleyMaintains58.0
PDMorgan StanleyMaintains34.0
HTHTDaiwa CapitalDowngrades
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

5 Biggest Price Target Changes For Friday

Analyst: CEO Shakeup Could Be Key Ingredient In Blue Apron's Turnaround