Market Overview

Catalysts Abound For Regeneron Pharmaceuticals


Regeneron Pharmaceuticals (NASDAQ: REGN) is a $5.54 billion biopharmaceutical firm with one marketed product and numerous late-stage drugs in its pipeline with several FDA approval filings scheduled for the second half of 2011. In addition, REGN has an early to mid-stage human monoclonal antibody pipeline for a wide variety of conditions. Furthermore, Regeneron has relationships with leading global pharmaceutical companies such as Bayer AG and Sanofi-Aventis (NYSE: SNY) in the form of co-development deals or drug partnerships.

On June 17, 2011, an FDA Advisory Committee voted 10-0 in favor of approval for Regeneron's EYLEA (VEGF Trap-Eye) drug for the treatment of wet age-related macular degeneration. The PDUFA decision date is 8/20/11, under a six-month priority review. The compound is being co-developed along with Bayer AG and is widely expected to be approved given the unanimous Advisory Panel decision.

EYLEA is a potential best-in-class product for the treatment of wet AMD, and could represent a $3 billion global market opportunity, which is currently dominated by an injectable drug called LUCENTIS. Regeneron's EYLEA has demonstrated that it's efficacy is comparable to expensive LUCENTIS injections, which must be administered monthly.

Another potentially promising drug in Regeneron's pipeline is ZALTRAP, which was initially developed to treat lung cancer. The compound, which was co-developed with Sanofi (SNY) was deemed ineffective for this indication, but data suggests it may be a promising colon cancer drug. In April 2011, the company reported the Phase III VELOUR clinical trial met its primary survival endpoint for patients with metastatic colon cancer.

A BLA filing is expected to come during the second half of 2011. In addition, REGN is expected to release additional trial results for ZALTRAP in the treatment of first-line colon cancer and prostate cancer in the second half of 2011 and in 2012, respectively. The first-line colon cancer trials are in Phase II while the prostate cancer trials are in Phase III.

The company's marketed drug is known called ARCALYST and is approved for an inherited group of auto-inflammatory conditions known as CAPS. In February 2011, the company announced that a second Phase III trial for the prevention of gout flares in patients receiving uric acid lowering therapy met all primary and secondary endpoints. The success of these trials could potentially open up a new market for ARCALYST and the company is expected to file a sBLA in mid-2011 to expand the drug's use.

The final exciting catalyst that REGN has in its pipeline are eight monoclonal antibodies that is developing in collaboration with Sanofi-Aventis. Potentially, 2-3 of these compounds could enter Phase III clinical trials in 2012.

Given Regeneron's portfolio of one approved drug, and significant late-stage pipeline, the stock has numerous catalysts going forward. The shares have been rising at a very fast clip, gaining 182% in the last year, but with a little luck, this could just be the beginning of a much larger move.

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