Regeneron: Surfing on Covid, With More Under the Surface


The price of Regeneron (NASDAQ:REGN) stock in 2021 has been based on REGEN-COV, its treatment for Covid-19. It shouldn’t be. There are other issues, positive and negative, that should be more interesting — or troubling — to biotech investors.

The Regeneron (REGN) website is displayed on a smartphone screen over a blue background.

Source: madamF /

As I first wrote in 2018, Regeneron isn’t just a drug maker, but a system for drug discovery. Its Velocisuite uses mouse models as a test bed for new drugs. This has given it a large pipeline of potential blockbusters.

But Covid-19 is an all-consuming topic, so for the last year Regeneron has been a Covid play.

The Covid Play

A glance at Regeneron’s stock chart is all you need to see the importance of REGEN-COV to investors.

Shares rose sharply into August on big sales to the government. They then fell sharply into October as its REGEN-COV pricing was criticized. They rose again in November as it showed long-term protection effects. Now it’s falling again on worries about its efficacy against the Omicron variant.

Financial results have been choppy, but generally positive. Regeneron doubled its first-quarter sales in the second quarter to $5.1 billion, but they fell below $3.5 billion for the third quarter. Still, the nine-month haul of over $11 billion has already surpassed 2020’s $8.5 billion. Net income of $5.8 billion has already beaten last year’s $3.5 billion. Those second-quarter sales were buoyed by the U.S. government purchasing one million doses of the Covid-19 drug.

On the surface this makes Regeneron a cheap stock, despite its Dec. 2 opening price of $633 per share. The market capitalization is $68.4 billion, just 10.5 times the last years’ earnings. To keep the price high Regeneron has launched a $3 billion stock buyback program.

Beyond Covid

Beyond Covid, Regeneron has one blockbuster whose future is threatened, but another in the wings.

Eylea, an injection that fights macular degeneration, has long been its biggest seller, with sales of almost $5 billion in 2020. But patents are approaching their expiration date. Viatris (NASDAQ:VTRS) is challenging some of the patents and preparing a biosimilar that will eat into Eylea’s sales.

Dupixent, an autoimmune drug currently used to treat dermatitis, could be an even bigger hit for Regeneron. Sales of the new drug came in at $1.7 billion in the third quarter. Regeneron says it has positive indications on 12 different conditions, many of them life-threatening. One analyst has predicted Dupixent could be the top-selling drug in the world by 2030, with sales of $21 billion. It’s a joint-venture with Sanofi (NASDAQ:SNY).

There are other potential blockbusters. Fasinumab would treat osteoarthritis pain in the knee and hip. Itepekimab could treat chronic asthma.  REGN1908-1909 would treat cat allergies. Libtayo, a cancer drug that competes with Keytruda from Merck (NYSE:MRK), saw sales of $348 million last year, up 80%.

The Bottom Line for REGN Stock

I have compared drug companies today to oil companies from the 1930s. They spend a lot of money wildcatting discovery in hopes of finding a gusher.

I have preferred Regeneron to other companies in the field because Velocisuite is a stellar method for finding drugs. But REGN stock results and price are not based on it having a method for drug discovery.

The results are based on its drugs. When a treatment hits, as with REGEN-COV, billions of dollars come in at once. When patents start to expire, as with Eylea, the tide goes out. The trick is to keep bringing in gushers. Regeneron seems to have mastered the trick. As the tide goes out on its Covid play, it’s becoming a cheap stock again.

On the date of publication, Dana Blankenhorn held no positions in any securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Dana Blankenhorn has been a financial and technology journalist since 1978. Just in time for the holidays he has a collection of Covid-19 stories at the Amazon Kindle store. Write him at or tweet him at @danablankenhorn. He writes a Substack newsletter, Facing the Future, which covers technology, markets, and politics.

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