Regeneron Pharmaceuticals Inc. (REGN) recently received a huge boost when the US Food and Drug Administration (FDA) cleared its injectable eye drug Eylea (aflibercept) for treating patients suffering from the neovascular form of age-related macular degeneration (wet AMD).
The recommended dosage for the drug, also known as VEGF (vascular endothelial growth factor) trap-eye, is 2mg on a monthly basis for the first 12 weeks. The subsequent recommended dosage is 2 mg on a bi-monthly basis.
We remind investors that Regeneron submitted a biologics license application (BLA) to the FDA seeking marketing approval for the candidate in the US for the wet AMD indication in February 2011.
A target date of August 20, 2011, was initially assigned by the FDA for deciding on Eylea. However, the target date was pushed back by three months to November 18, when the FDA cleared the drug. We believe that the FDA approval of Eylea for the wet AMD indication is a major achievement for Regeneron and will boost its top line significantly.
We note that the BLA was based on positive results from the VIEW program (VEGF Trap-Eye: Investigation of Efficacy and Safety in Wet AMD) which consisted of two studies, VIEW 1 and VIEW 2. The studies evaluated the efficacy of VEGF trap-eye versus Roche/Novartis’ (RHHBY/NVS) Lucentis (ranibizumab), an anti-angiogenic agent approved for treating wet AMD. Regeneron’s eye treatment was found to be non-inferior to Lucentis.
Regeneron has co-developed the eye-therapy with Bayer (BAYRY). Per the agreement, Bayer is responsible for marketing Eylea in ex-US markets on approval. The profit earned from the sales of the candidate in those markets will be shared equally by the companies. However, Regeneron owns the entire US rights pertaining to the eye-drug Applications seeking marketing approval of the candidate in the European Union and Japan have already been filed by Bayer.
Apart from wet AMD, Bayer and Regeneron are studying VEGF trap for other eye-disorders such as central retinal vein occlusion , diabetic macular edema and myopic choroidal neovascularization .
Our Recommendation
Currently, we have a Neutral stance on Regeneron in the long run. The company carries a Zacks #3 Rank (Hold rating) in the short run.
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