Cowen says buy Regeneron, success of drugs could help pharmaceutical stock

Published Mon, Jan 30 20238:11 AM ESTUpdated Mon, Jan 30 20239:38 AM EST

Regeneron 's stock could get a boost as one of its major drugs gains a competitive edge and another continues dominating, according to Cowen. Analyst Tyler Van Buren on Monday upgraded the pharmaceutical stock to outperform from market perform. He also raised the price target by $100 to $875, which implies an upside of 17.8% from where the stock closed Friday. Van Buren said Eylea has an "incremental improvement" over competing drug Vabysmo after previously being considered equal. The high-dosage, or HD, Eylea is now considered to have a one-week benefit over Vabysmo. It's used to stop leaking fluid from abnormal blood vessels in the back of the eye. He added that Dupixent, which can be used to help those with conditions such as eczema and asthma, "continues to be a beast." He pointed to the consensus global sales estimate for the drug, which shows sales hitting $15 billion by 2027. But he said said that mark could be reached a year or two earlier and could surpass $18 billion in sales before its European Union patients expire in 2029. And he said there's even the possibility for it to crack $20 billion in sales if data from a trial comes in strong. "The HD Eylea data has altered the trajectory of Regeneron," Van Buren said in a note to clients. "With the future of the Eylea franchise re-secured, and Dupixent being a top growth asset in biopharma, REGN is likely to remain one of the more fundamentally attractive companies in LC biotech." Eylea should see about $6.5 billion, or 4% year-over-year growth, in 2023, according to Van Buren. He noted that's what the company saw in the second and third quarter of 2022 before taking a hit in the fourth quarter due to negative charity impacts. But he said that could be conservative given continued market growth. Outside the U.S., he expects sales growth of 4% and 1% in 2023 and 2024, respectively. He said estimates for 2025 and beyond are more varied depending on how the competitive landscape changes. Van Buren said Regeneron's cancer portfolio continues to post little to no value, but there's potential opportunity in Odronextamab and Fianlimab specifically. He said more data should come for projects within this business unit in the first half of 2023. — CNBC's Michael Bloom contributed to this report.