Why Regeneron Pharmaceuticals Analyst Says Competitive Concerns Are Overblown, Pipeline Opportunity Underappreciated

Regeneron Pharmaceuticals Inc.'s (NASDAQ: REGN) robust pipeline and attractive valuation has prompted an analyst at HC Wainwright to join the bullish camp.

The Regeneron Analyst: Analyst Michael King initiated coverage of Regeneron shares with a Buy rating and a $703 price target.

The Regeneron Thesis: Regeneron shares have underperformed the SPDR S&P Biotech ETF (NYSE: XBI), because of investors concerns about competition for its main revenue drivers Eylea and Dupixent, analyst King said in a note.

Eylea, which accounted for approximately 58% of the fiscal year 2020 worldwide product revenue, saw growth slow to 5%, its lowest historic growth rate, King said.

"While Eylea will continue to face competition from biosimilars, long-acting implants, and novel therapies, it is our view that investors are overly negative about its ongoing contribution to the company's top and bottom lines," the analyst wrote in the note.

Related Link: Regeneron Requests Emergency Use Authorization, Analysts See Coronavirus Antibodies As Earnings Driver In 2021

Dupixent revenues grew 75% and will likely exceed those of Eylea by 2023, according to the analyst.

This apart, Regeneron is in possession of a robust pipeline, one which is under-appreciated by investors, King said. The company's synergistic partnership with Intellia Therapeutics Inc (NASDAQ: NTLA) is bearing fruit with platform validating update for CRISPR/Cas9-LNP candidate therapy for TTR amyloidosis, he added.

Dupixent, Libtayo and the many bispecifcs, the analyst said, represent major value drivers that will deliver significant value over time for shareholders.

REGN Price Action: Regeneron's shares were down 0.076% at $543.12 at press time Tuesday. 

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