Baird Cuts Price Target on Regeneron (REGN) as Late Stage Trials Hit Operating Costs - Reiterates Outperform
Baird maintained an Outperform rating on Regeneron Pharma (NASDAQ: REGN), and cut the price target to $526.00 (from $674.00), following the company's 4Q. Non-GAAP EPS missed consensus at $2.81 compared to $3.38. Revenues were lower than expected at $1.10B versus consensus estimates of $1.17B. Mirroring REGN's pre-release in January, U.S. Eylea 2015 sales were $2.68B, up 54% YoY. Eylea had $746M in sales in the U.S. in 4Q, up 44% YoY. The big data expected in 2016 will come from the Phase III program of dupilumab in atopic dermatitis in 1H16, and the 50% interim event time-point in the Praluent ODYSSEY outcomes study.
Analyst Brian Skorney commented, "Lowering price target on increased operating expenses/slower-than-expected Praluent launch. Though Eylea continues to perform well and expansion opportunities for the drug remain, the collaboration with Sanofi is unlikely to produce significant profits for a couple of years. Coupled with increasing operating expenses due to advancement of a number of late-stage trials for which Regeneron must pay a higher share of the costs, we are moderating our growth expectations over the next few year, resulting in a lower price target of $526."
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Shares of Regeneron Pharma closed at $390.53 yesterday.