Bullish indicating open at $55-$60, IPO prices at $37
On Wednesday, Citi analyst Geoff Meacham upgraded shares of Regeneron (NASDAQ:REGN) Pharmaceuticals from Neutral to Buy and increased the price target to $700 from $600. The upgrade reflects a positive outlook based on the company’s strong pipeline potential, particularly in melanoma and chronic obstructive pulmonary disease (COPD), and an improved risk/reward scenario. Regeneron’s stock has experienced a significant decline, dropping 55% since its peak in August 2024, while the S&P 500 index has risen by 5% during the same period.
The decline in Regeneron’s share price was influenced by a decrease in the U.S. sales of its Eylea franchise, which saw a quarter-over-quarter fall of 3% in the fourth quarter of 2024 and 30% in the first quarter of 2025. However, Meacham suggests that the market’s expectations for Eylea in 2026 and 2027 are now more reasonable, with anticipated year-over-year decreases of 10% and 6%, respectively. He also notes that Eylea’s contribution to the company’s net present value (NPV) is now considered modest, with a base-case scenario of $600 per share excluding Eylea’s impact. Despite these challenges, InvestingPro analysis shows Regeneron maintains excellent financial health with a current ratio of 4.9 and minimal debt, holding more cash than debt on its balance sheet. The company’s overall financial health score is rated as "GREAT" by InvestingPro’s comprehensive evaluation system.
The analyst remains confident in the continued success of Regeneron’s core franchises, Dupixent and Libtayo, which are projected to have a combined compound annual growth rate (CAGR) of 8% from 2025 to 2030. Upcoming phase 3 updates for fianlimab in metastatic melanoma and itepekimab in COPD are expected to potentially enhance Regeneron’s market position.
Despite potential risks from pharmaceutical tariffs and most-favored-nation (MFN) pricing policies, Meacham believes that Regeneron’s exposure is relatively controlled. To further discuss the biopharmaceutical sector and the recent rating changes, Citi is hosting a call today at 11:30 am Eastern Time, accompanied by slides available for review. For investors seeking deeper insights into Regeneron’s valuation and prospects, InvestingPro offers a comprehensive research report with detailed analysis of the company’s financial health, growth prospects, and market position, along with 8 additional exclusive ProTips that could inform your investment decision.
In other recent news, Regeneron Pharmaceuticals reported its first-quarter 2025 earnings, which fell short of both earnings and revenue expectations. The company announced earnings per share of $8.22, missing the forecasted $8.48, and revenue of $3 billion, below the anticipated $3.24 billion. Despite these challenges, Regeneron continues to advance its product pipeline, with significant presentations planned for the American Society of Clinical Oncology Annual Meeting, including findings from trials involving its cancer treatments. The U.S. Food and Drug Administration has accepted Biologics License Applications for linvoseltamab and odronextamab, with decisions expected in July 2025. Additionally, Cantor Fitzgerald maintained its Overweight rating on Regeneron, with a price target of $695, but noted concerns regarding the Complete Response Letter for the high-dose Eylea pre-filled syringe. The firm slightly reduced its sales estimates for Eylea from $4.11 billion to $4.08 billion, reflecting ongoing challenges. Regeneron remains focused on expanding its R&D efforts, with plans for multiple U.S. regulatory approvals in 2025 and continued investment in manufacturing capabilities.
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