PreMarket Prep Stock Of The Day: Regeneron

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

With the recent surge in the Delta variant of COVID-19 virus, biotech and pharmaceutical companies have been in the spotlight. While the companies that have been approved for vaccines have skyrocketed, Regeneron Pharmaceuticals REGN is being rewarded for its antibody treatment of the virus and is the PreMarket Prep Stock of the Day.

Regeneron In Favor At The Start: At the onset of the pandemic, the company was heavily favored to come up with a vaccine or treatment of the virus. This was evidenced by the issue bottoming in January 2020 ($328.13) and making a lower high in February ($339.39) before embarking on an impressive rally.

In fact, it doubled in price, peaking on July 20, 2020 ($664.64), and posted its all-time closing high on that day as well ($658.21).

Regeneron Falls Out Of Favor: While other companies such as Pfizer Inc. PFE and Moderna Inc. MRNA were heavily rewarded for the development of vaccines, the actual treatment of the disease was not in the headlines.

This sentiment was reflected in the price action of Regeneron as profit-takers came in force after the surprising doubling of the issue in a short time span. Beginning in August 2020, the issue was lower in six of the last seven months.

This included October, when then-President Donald Trump was treated successfully with Regeneron's antibody treatment in early October.

Regeneron Finds A Bottom: The issue appeared to end its skid to start the year, but stumbled in February and did not make its low for the retreat until March ($441), which was just under the February low ($445.57). After ending March in the green, it is now in the midst of a six-month winning streak.

Regeneron Catalyst Resurfaces: Before the open Wednesday, the company announced that its antibody drug shipments rose ninefold last week versus a month earlier.

While it's yet to be determined how much the company's balance sheet will be directly impacted by the rapid increase in sales, it really doesn't matter.

Why It Matters: When it comes to biotech companies, “good news” for a drug is “good news.”

Whether it be increased demand for the product or increasing confidence over the potential of other drugs in the pipeline, investors are applauding the announcement.

PreMarket Prep's Fundamental Take: The issue was discussed in great detail on Wednesday's show.

“Regeneron is a cheap company and has been for quite some time," co-host Dennis Dick said. "I added it to my portfolio about a month ago, because I do not think the COVID-19 story is over yet.”

PreMarket Prep's Technical Take: When the issue was being covered on the show, it had already put in place its premarket high ($670) and had backed off to the $660 area.

Investors were altered to the issue’s all-time high ($664.64) as a potential resistance level and Tuesday’s closing price ($647.44) as potential support.

On the upside, profit-takers have not allowed the all-time high to come into play, as $658.97 stands as the high for the session as of 2:15 p.m. EST. 

On the downside, the retreat off the higher open found buyers just under the close at $647.10. At the time of writing, the issue had retreated off the high and was drifting toward the early morning low.

The full discussion on the issue from Wednesday’s show can be found here:

Posted In: PreMarket PrepBiotechTechnicalsTrading IdeasGeneral