Nesvacumab Key Catalyst For Regeneron In 2017; BTIG Upgrades To Buy

The ongoing Phase 2 studies of Regeneron Pharmaceuticals Inc’s (NASDAQ: REGN) nesvacumab could yield a favorable outcome, expanding the market opportunity for the company in wet Age-related Macular Degeneration [wet AMD] and Diabetic Macular Edema [DME], BTIG’s Dane Leone said in a report.

Leone upgraded the rating on the company from Neutral to Buy, while establishing a price target of $460.

Leone cited nesvacumab as a key catalyst for 2017 and added that although “a potential injunction against Praluent may occur,” the stock was already trading on an ex-Praluent valuation.

Positives

Leone estimated the current global anti-VEGF [vascular endothelial growth factor] ophthalmic market opportunity at ~$9-$10 billion, with Regeneron’s market share estimated at ~30 percent.

Initial data from the ongoing Phase 2 studies is expected to be announced in Q3 2017. “The 6.5 – 7.5 letter gains at 12 weeks with treatment experienced patients across the Ang2 Phase 1 trials, supports optimism relative to the 7.5 letter gains at 12 weeks with naïve patients in the recent CAPELLA study,” the analyst wrote.

Positive data for nesvacumab could allow the Eylea franchise to gain market share, even if Roche’s competing drug is successful. “Clinicians are already comfortable with the aflibercept (Eylea) backbone versus an entirely new molecule from Roche that would lack long-term treatment experience data,” Leone noted.