Regeneron Jumps 4% as Analysts See Drug Potential

Shares of Regeneron Pharmaceuticals (REGN) have jumped today as two investment banks released positive comments on the drug maker over the weekend following the release of optimistic data about of one of its drugs on Friday.

EPA

RBC Capital Markets analysts Adnan Butt and Michael Yee explain:

Detailed 1-year Phase III DME data for Eylea demonstrated statistically significant vision improvement, comparable efficacy between the every 4 and 8 week Eylea arms, and a clean safety profile. Three positive things relative to the Lucentis Phase III program include: 1) efficacy in a more treatment experienced and tougher patient population, 2) potential for safety differences, especially when it comes to APTC and death events, and 3) every two month dosing that could be on the label. Since REGN will file an sBLA for Eylea by YE:13, potential approval in 2014 could reaccelerate Eylea sales growth, especially once two-year data is available. We believe there could be a pool of hard to treat Lucentis  and Avastin patients with [diabetic macular edema], as roughly one-third of patients on Lucentis still had leakage in the Phase III studies.

Butt and Yee raised their price target for Regeneron to $323 from $293.

Cowen’s David Ferreiro, meanwhile, notes that the amount of medicine patients need to take will make a big difference. He writes:

Our diligence suggests that less frequent dosing with Eylea will be key, given the generally low compliance rates among diabetic patients. Currently, we assume only minor market expansion; however, some of our consults suggest Eylea dosing convenience could meaningfully expand the market.

Ferreiro raised his price target to $310 from $300.

Shares of Regeneron have jumped 3.5% to $316.39–and the S&P 500′s best performer today. Novartis (NVS), which makes Lucentis, has dipped 0.5% to $76.73, while Roche (RHHBY), which makes Avastin, has gained 0.2% to $67.54. Vertex Pharmaceuticals (VRTX), meanwhile, has gained 0.9% to $76.77, making it the 10th best perform in the S&P 500.