It has been about a month since the last earnings report for Regeneron (REGN). Shares have lost about 4.1% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Regeneron due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Regeneron Beats on Q4 Earnings, Initiates Quarterly Dividend
Regeneron Pharmaceuticals reported fourth-quarter 2024 earnings per share (EPS) of $12.07, which beat the Zacks Consensus Estimate of $11.62. The company recorded an EPS of $11.86 in the year-ago period.
The upside in the bottom line can be attributed to higher revenues.
Total revenues increased 10% year over year to $3.79 billion, fueled by increased collaboration revenues from Sanofi for Dupixent, higher Eylea HD and Libtayo sales. Revenues marginally beat the Zacks Consensus Estimate of $3.78 billion.
More on Q4 Performance
Eylea’s sales in the United States declined 11% year over year to $1.2 billion, primarily due to increased competition.
Please note that Regeneron co-developed Eylea with the HealthCare unit of Bayer AG. Regeneron records net product sales of Eylea in the United States and Bayer does the same outside the country. The company records its share of profits in connection with Eylea sales outside the United States as collaboration revenues.
In August 2023, the FDA approved Eylea HD (higher dose of Eylea) for the treatment of patients with wet age-related macular degeneration, diabetic macular edema and diabetic retinopathy.
Eylea HD generated revenues of $305 million in the United States, driven by the addition of new patients and the transition of patients from Eylea.
Total Eylea and Eylea HD sales in the United States were $1.49 billion, up 2% year over year. The figure missed the Zacks Consensus Estimate by 4.29%.
Total Eylea HD and Eylea net product sales were favorably impacted by approximately $85 million as a result of higher wholesaler inventory levels for Eylea, partially offset by lower wholesaler inventory levels for Eylea HD.
Total revenues include collaboration revenues of $1.61 billion from Sanofi and Bayer. The figure increased 17.3% from that recorded in the year-ago quarter. Total collaboration revenues missed the Zacks Consensus Estimate of $1.69 billion.
Sanofi’s collaboration revenues increased 22% to $1.2 billion, driven by profits associated with higher Dupixent sales. However, the figure missed the Zacks Consensus Estimate of $1.3 billion. We note that Sanofi records global net product sales of Dupixent and Kevzara, while Regeneron records its share of profits/losses in connection with the global sales of both drugs. Dupixent’s sales increased 15% year over year to $3.7 billion.
Bayer’s collaboration revenues totaled $377 million, flat year over year.
Regeneron records net product sales of Praluent in the United States and Sanofi does the same outside the country. SNY pays REGN a royalty on such sales. Regeneron records global net product sales of Libtayo and pays Sanofi a royalty on such sales.
Total Libtayo sales came in at $366.9 million, up 50% year over year. The figure beat the Zacks Consensus Estimate of $339 million.
Praluent’s net sales in the United States were $62.7 million. Kevzara recorded global sales of $134.8 million, up 20% from the year-ago quarter’s level.
Adjusted R&D expenses jumped 19% year over year to $1.2 billion due to the advancement of the company's mid and late-stage clinical pipeline and higher headcount-related costs. Adjusted SG&A expenses increased 9% to $681 million due to higher commercialization-related expenses to support the launch of Eylea HD and higher headcount-related costs.
2024 Results
Regeneron recorded revenues of $14.202 billion, up 8% from the 2023 level. The figure beat the Zacks Consensus Estimate of $14.20 billion. EPS of $45.62 was up from $43.79 in 2023. The figure also surpassed the Zacks Consensus Estimate of $44.96.
Initiates Dividend Program
Regeneron initiated a quarterly cash dividend program and declared a dividend of $0.88 per share. The dividend is payable on March 20, 2025 to shareholders of record as of Feb. 20, 2025. The board also authorized an additional $3.0 billion share repurchase program, bringing the total current capacity to approximately $4.5 billion.
Key Pipeline and Regulatory Update
The primary endpoint was met in the late-stage QUASAR study evaluating EYLEA HD for the treatment of patients with macular edema following RVO, including those with central, branch, and hemiretinal vein occlusions. Regeneron plans to submit a supplemental biologics license application (sBLA) to the FDA in the first quarter of 2025.
A regulatory application for a pre-filled syringe was submitted to the FDA and a decision is expected by mid-2025.
The European Commission (EC) approved Dupixent to treat eosinophilic esophagitis in children aged 1 to 11 years, in November 2024.
The FDA accepted the resubmission of an sBLA for Dupixent to treat adults and adolescents aged 12 years and older with chronic spontaneous urticaria whose disease is not adequately controlled with H1 antihistamine treatment. The regulatory body has set a target action date of April 18, 2025.
An sBLA for Dupixent in bullous pemphigoid was submitted to the FDA.
Last month, Regeneron resubmitted the BLA for linvoseltamab, a bispecific antibody targeting BCMA and CD3, in relapsed/refractory (R/R) multiple myeloma following resolution of third-party manufacturing issues.
Regeneron also resubmitted the BLA for odronextamab, a bispecific antibody targeting CD20 and CD3, in R/R follicular lymphoma, to the FDA.
The EC also approved Kevzara (sarilumab) for the treatment of polymyalgia rheumatica (PMR) and polyarticular juvenile idiopathic arthritis (pJIA).
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
The consensus estimate has shifted -10.87% due to these changes.
VGM Scores
Currently, Regeneron has a poor Growth Score of F, a grade with the same score on the momentum front. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Regeneron has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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