BMO Capital Markets has maintained its Outperform rating and $1,300.00 price target for Regeneron (NASDAQ:REGN) Pharmaceuticals (NASDAQ: REGN).
The firm's analysis follows recent developments including regulatory approval and a legal decision that impacts the company's products, Eylea and Dupixent.
The firm updated its financial model for Regeneron after considering the latest events affecting the company's portfolio.
The approval of Dupixent for the treatment of Chronic Obstructive Pulmonary Disease (COPD) and a court ruling against a preliminary injunction for Amgen (NASDAQ:AMGN)'s biosimilar Eylea were key factors in the reassessment.
According to the firm, the approval of Dupixent in treating COPD is expected to increase the drug's revenue projections. However, this positive outlook is somewhat tempered by a potential decrease in revenue for Eylea, a treatment for eye diseases, due to the court's decision which favored Amgen's biosimilar product.
Despite these adjustments, BMO Capital Markets has decided to maintain its $1,300 price target for Regeneron. The firm's stance reflects a balance between the new opportunities for Dupixent and the challenges faced by the Eylea franchise.
The analyst from BMO Capital Markets stated, "We have updated our model accordingly, reflecting a modest increase in estimates for Dupixent offset by a modest decrease in revenues for the Eylea franchise. We maintain our target price of $1,300. Reiterate Outperform."
Meanwhile, Regeneron is facing a legal challenge from Amgen over patents related to its product, Eleya. A preliminary court decision has favored Amgen, potentially affecting Regeneron's market share and sales growth, leading Erste Group to downgrade Regeneron's rating from Buy to Hold.
On a positive note, Regeneron's drug Dupixent has received approval for use in Chronic Obstructive Pulmonary Disease (COPD) patients in both the United States and China, a development that TD Cowen believes could represent a $2-3 billion opportunity for the company.
Regeneron's total revenues have increased by 12% to $3.55 billion, with Dupixent global revenues seeing a significant 29% surge to $3.56 billion. Goldman Sachs, Piper Sandler, and Truist Securities have maintained positive and neutral stances on Regeneron, respectively, despite a legal dispute with Amgen over its Eylea product.
InvestingPro Insights
To complement BMO Capital Markets' analysis, recent data from InvestingPro provides additional context for Regeneron Pharmaceuticals' financial position. The company's market capitalization stands at $112.54 billion, reflecting its significant presence in the biotechnology sector. Regeneron's P/E ratio of 26.09 suggests that investors are willing to pay a premium for the company's earnings, possibly due to its strong product pipeline and growth prospects.
InvestingPro Tips highlight that Regeneron has been aggressively buying back shares, which often signals management's confidence in the company's value. This aligns with the firm's strong financial position, as another tip notes that Regeneron's liquid assets exceed its short-term obligations. These factors may contribute to the stock's resilience in the face of market challenges.
The company's revenue growth of 6.46% over the last twelve months and a more robust 12.32% growth in the most recent quarter support BMO's optimistic stance. This growth trajectory, combined with Regeneron's profitable status and strong return over the last five years, underscores the potential upside that BMO sees in its $1,300 price target.
For investors seeking a deeper understanding of Regeneron's financial health and market position, InvestingPro offers 11 additional tips, providing a comprehensive view of the company's strengths and potential risks.
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