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Cowen analysts upgraded Regeneron (NASDAQ:REGN) to Outperform from Market Perform and hiked the price target to $875 per share from the prior $775 as the company’s pipeline is delivering solid results.
The analysts are especially encouraged by the success of the HD Eylea – the firm’s macular degeneration franchise – which has managed to alter the trajectory of Regeneron, they wrote in a client note.
“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,” the analysts wrote.
Hence, the raised rating and price target reflect increased out-year estimates for Eylea.
“The bottom line is that [Roche’s] Vabysmo is not doing enough to offset the absolute market growth an asset the size of Eylea (~$10B) is generating (+11-14% Y/Y US in Q2-Q3 despite Vabysmo), and with a potential late August approval of HD Eylea, the window of opportunity is closing quickly. Additionally, with the Eylea > HD Eylea transition likely to occur rapidly, the impact of biosimilars will be minimal and out-year consensus estimates are too low,” the analysts added.
Regeneron stock price closed at $742.83 on Friday.
