Eye-drug Eylea is Regeneron Pharmaceuticals, Inc.’s (REGN) primary growth driver. Sales of the drug have been on the rise ever since its U.S. launch in late 2011 for the age-related macular degeneration (wet AMD) indication. We note that Eylea is approved for wet AMD in approximately 50 countries across the globe.
Sales of Eylea in the U.S. climbed 49% in the third quarter of 2013 to $363 million. Sales in ex-U.S. markets were $125 million, as reported by partner Bayer (BAYRY). As per the agreement with Bayer, Regeneron is solely responsible for the U.S. sales of the eye drug. The company is entitled to the entire profits arising from the U.S. sales of Eylea. Regeneron and Bayer equally share the profits and losses from ex-US Eylea sales, except for Japan where Regeneron receives a royalty on net sales.
Based on its bullish expectation, Regeneron raised its forecast for 2013 Eylea sales. Regeneron now expects 2013 sales of Eylea in the range of $1.35–$1.375 billion (old guidance: $1.3–$1.35 billion). We expect Regeneron to achieve the guidance on Eylea. In Sep 2012, the U.S. Food and Drug Administration (FDA) approved the label expansion of Eylea into macular edema following CRVO indication. Japanese approval for the CRVO indication came in Nov 2013.
The U.S. label expansion of Eylea into the CRVO indication has further boosted its sales potential. This should strengthen Regeneron’s top line further.
Regeneron is looking to expand Eylea’s label further into the diabetic macular edema (DME) – a leading cause of blindness. Regeneron’s supplemental biologics license application (sBLA) seeking U.S. approval of Eylea in the new indication is under FDA review. A decision from the U.S. regulatory body is expected by Aug. 18, 2014. U.S. approval for the new indication was sought on the basis of positive data from two phase III studies- VIVID and VISTA. EU approval for the indication was sought in Nov 2013. Approval of Eylea for the DME indication will boost the eye drug’s sales potential further.
Regeneron, a biopharmaceutical company, carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the biopharma space are Jazz Pharmaceuticals (JAZZ) and Vanda Pharmaceuticals Inc. (VNDA). Both stocks carry a Zacks Rank #1 (Strong Buy).
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