Canaccord Slices Regeneron Price Target 32% On Eylea, Dupixent Challenges

Regeneron Pharmaceuticals Inc (NASDAQ: REGN) shares fell 31 percent over the last six months, and the company's headwinds appear unending.

The biotech firm lost an advocate Wednesday on the basis of a rough outlook for Eylea and Dupixent treatments.

The Rating

Canaccord Genuity analyst John Newman downgraded Regeneron from Buy to Hold and cut the price target from $522 to $356.

The Thesis

Regeneron’s Eylea — seen as a core revenue driver — may face competition from Novartis AG (ADR) (NYSE: NVS)’s brolucizumab and Roche’s RG7716 within the next two years, and this threat compounds concerns over discontinued guidance, Newman said in a Wednesday note. (See the analyst's track record here.) 

“Also, unlike most biotech drugs, price increases for EYLEA are very difficult and unlikely given low-cost competition from off-label Avastin use,” Newman said. “In addition, we are surprised at the lack of guidance since EYLEA has continued to grow well for a $4-billion drug in the U.S."

At the same time, the analyst anticipates sales-stunting challenges for Dupixent. Regulatory approval for pediatric indications, which comprise two-thirds of the market, may be delayed until 2021 and compound competition from the likes of Abbvie Inc (NYSE: ABBV), whose asthma treatment could alter Dupixent’s peak revenue estimates.

Price Action

At the time of publication, Regeneron shares were down 0.66 percent at $320.92. 

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