Regeneron Pharmaceuticals is my value share of the week
Regeneron Pharmaceuticals, Inc. (REGN) has grown in popularity over the past year due to its COVID 19 cocktail treatment. But the company is not a trick pony. He has more than a few hit drugs, with more on the way. The best part is that the stock is quite undervalued. Read on to find out why this stock belongs in your portfolio.
Regeneron Pharmaceuticals, Inc. (REGN) discovers, develops and markets products that fight eye disease, cardiovascular disease, cancer and inflammation. The company has several products marketed, including Eylea, approved for wet age-related macular degeneration and other eye diseases, Praluent for lowering LDL cholesterol, and Dupixent for atopic dermatitis, asthma and nasal polyposis.
The company is also developing monoclonal antibodies with Sanofi in immunology and cancerology. REGN also develops bispecific antibodies and antibody cocktails with other collaborators and independently. However, its main growth driver is Eylea, which continues to generate strong revenues through the continued expansion of its labels.
Eylea is approved in the US, EU, Japan, and other countries to treat age-related neovascular macular degeneration, diabetic macular edema, and macular edema. Demographic trends are driving growth in the United States, including an aging population and an increasing prevalence of diabetes.
REGN is also working to expand the drug’s label to other indications. This should further boost sales. For example, the FDA has approved a 12-week dosing interval for injecting Eylea in patients with wet AMD. The drug has also been approved for the treatment of diabetic retinopathy. Further expansion of the label into other indications should allow the drug to gain access to more patients, which would increase the profit potential.
The company also has the approval of Dupixent Injection for the treatment of adults with moderate to severe atopic dermatitis and asthma. Absorption was strong for atopic dermatitis and asthma. Dupixent has also been approved in Europe. Like Eylea, continued brand expansion is expected to further boost sales.
Additional drugs also generate income for the company. For example, Kevzara has been approved in the United States for the treatment of adult patients with moderate to severe active rheumatoid arthritis. A few years ago, the FDA approved Libtayo to treat patients with metastatic or locally advanced cutaneous squamous cell carcinoma.
The initial adoption of Libtayo was strong, which is why REGN is working on expanding its label. The company also has a strong pipeline. REGN is resuming the recruitment of patients with follicular lymphoma and diffuse large B-cell lymphoma in its monotherapy trials with odronextamab.
But REGN’s most popular offering right now is the COVID 19 REGEN-COV treatment. The FDA has granted emergency use authorization for the antibody cocktail of two monoclonal antibodies (casirivimab and imdevimab). The treatment was designed specifically to block the infectivity of SARS-CoV-2, the virus that causes COVID-19.
The treatment had a good quarter as it generated total sales of $ 3 billion in the quarter. During the quarter, the company fulfilled its second agreement with the US government to manufacture and deliver 1.25 million doses of REGEN-COV.
This helped generate substantial growth for the company during the quarter. Earnings were $ 25.80 per share, up 260% year-over-year. Revenue jumped 163% year over year. Even excluding REGEN-COV, sales rose 22% to $ 2.38 billion, driven by strong demand for Eylea and Dupixent.
REGN has an overall rating of B, resulting in a purchase rating in our POWR rating system. The company has a growth rating of B, in part due to growth in the last quarter. Analysts expect sales to grow a further 28.8% year-over-year in the current quarter and 55.5% for the year. REGN also has a value rating of B due to its current rating.
The stock has a trailing P / E of 11.98 and a forward P / E of 12.48; both are very attractive numbers. Its price-to-sales ratio of 6.1 is also well below the industry average. If we consider the price targets of analysts, the stock is undervalued by up to 24%. We also provide Momentum, Stability, Feeling, and Quality Notes for REGN, which you can find here.
REGN is ranked # 11 in the biotechnology industry. For more leading actions in this industry, Click here.
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REGN shares rose $ 0.08 (+ 0.01%) in after-hours trading on Friday. Year-to-date, REGN has gained 37.30%, compared to a 21.22% increase in the benchmark S&P 500 over the same period.
About the Author: David Cohne
David Cohne has 20 years of experience as an investment analyst and writer. He is the chief value strategist for StockNews.com and the publisher of the POWR Value newsletter. Prior to StockNews, David spent eleven years as a consultant providing outsourced investment research and content to financial services firms, hedge funds and online publications. David enjoys researching and writing about stocks and markets. It takes a fundamental quantitative approach in evaluating stocks for readers.
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