Regeneron Pharmaceuticals, Inc. (REGN) and partner Sanofi Aventis (SNY) recently announced data from two mid-stage studies of their pipeline candidate sarilumab (REGN88/SAR153191). While one study (MOBILITY) evaluated patients with rheumatoid arthritis (RA) the other (ALIGN) evaluated ankylosing spondylitis (AS) patients. Sarilumab is an antibody targeting the interleukin-6 receptor (IL-6R). The data from the RA trial was positive while the AS trial data was not too encouraging.
The MOBILITY (n=306) trial showed that sarilumab in combination with methotrexate (MTX), the standard of care for RA, led to significant improvement in signs and symptoms of moderate-to-severe RA patients versus patients treated with MTX plus placebo. The trial compared 5 doses of sarilumab plus MTX to placebo plus MTX. 49% of patients receiving the lowest dose met the primary endpoint of at least a 20% improvement in RA symptoms (ACR20) after 12 weeks versus 46.2% of patients receiving MTX plus placebo. Similarly, among patients receiving the highest dose, 72% met the primary endpoint. Regeneron and Sanofi will decide on which doses will be tested in phase III trials on the basis of data from the MOBILITY study.
However, the ALIGN study on AS failed to show significant improvements in signs and symptoms of active AS versus placebo in patients who had unsatisfactory response to Nonsteroidal Antiinflammatory Drugs (NSAIDs).
Our Recommendation
We currently have a Neutral recommendation on Regeneron. The stock carries a Zacks #3 Rank (short-term “Hold” rating). We are encouraged by the efforts made by the company to develop its pipeline. A key action date is coming up for Regeneron in August this year when the US Food and Drug Administration (FDA) is expected to decide on its VEGF trap-eye for treating patients suffering from the neovascular form of age-related macular degeneration. Moreover, Regeneron’s associations with major players like Bayer (BAYRY) and Sanofi have helped not only to bring in funds in the form of upfront and milestone payments but also to validate the company’s proprietary trap technology.
However, pipeline setbacks encountered by Regeneron like the disappointing results of the VITAL study, the clinical hold on the development of REGN475 and the termination of the development of aflibercept for metastatic pancreatic cancer concern us. Consequently, we retain our ‘Neutral’ stance on the stock.
We currently have a Neutral recommendation on Sanofi. The stock carries a Zacks #3 Rank (short-term “Hold” rating). The company recently completed its acquisition of biotech company Genzyme Corporation. This acquisition will boost Sanofi’s revenues as well as bolster its pipeline.
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