Regeneron Pharmaceuticals, Inc. (REGN) announced that its supplemental biologics license application (sBLA) for eye drug Eylea has been accepted by the FDA. Regeneron is looking to get Eylea’s label expanded for the treatment of diabetic retinopathy in patients with diabetic macular edema (DME).
The sBLA will be reviewed by the FDA on a priority basis with a final decision expected by Mar 30, 2015. The drug enjoys a Breakthrough Therapy designation for the treatment of diabetic retinopathy in patients suffering from DME.
Eylea is already approved in the U.S. for the treatment of wet age-related macular degeneration (AMD), macular edema following retinal vein occlusion (RVO) and DME.
Eylea is an important drug for both Bayer and Regeneron. Particularly for Regeneron, it has been the key growth driver. Eylea revenues, as reported by Bayer, were €540 million in the first nine months of 2014 as compared to €207 million in the first nine months of 2013.
Regeneron holds exclusive rights to sell Eylea within the U.S. The HealthCare segment of Bayer (BAYRY) has licensed exclusive commercialization rights for the product in the ex-U.S. markets. Regeneron and Bayer equally share the profits from Eylea sales in all ex-U.S. territories except Japan, where Regeneron receives royalties on Eylea’s net sales.
Our Take
Eylea has performed encouragingly since its launch. Both Bayer’s and Regeneron’s revenues have benefited from the drug. Another label expansion will boost sales further. The companies are also evaluating the drug in a number of other indications like myopic choroidal neovascularization.
Regeneron currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the health care sector include Affymetrix Inc. (AFFX) and Biogen Idec Inc. (BIIB). Both hold a Zacks Rank #1 (Strong Buy).
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