Regeneron Pharmaceuticals Inc. (REGN) announced at the global healthcare conference of JPMorgan (JPM) that its eye drug Eylea is off to a strong start in the US. Regeneron announced at the conference that unaudited sales of Eylea, launched in the US on November 21, 2011 following FDA approval, is expected in the range of $24-$25 million in the final quarter of 2011.
Eylea is marketed for treating patients suffering from the neovascular form of age-related macular degeneration (wet AMD). The disorder results in the growth of new blood vessels beneath the retina which leak blood and fluid. The leakage causes the retina to function improperly thereby resulting in distortion and/or blind spots in central vision. Wet AMD is the leading cause of blindness in patients aged over 65 in the US and Europe.
Eylea is expected to continue performing well in 2012. Regeneron projects 2012 Eylea sales $140-$160 million. We expect Eylea to be a dominant player in the wet AMD market, which offers significant commercial potential. The US market for wet AMD is approximately worth $1.5 billion according to Regeneron.
Regeneron has co-developed Eylea with Bayer (BAYRY). Per the agreement, Bayer is responsible for marketing Eylea in ex-US markets on approval. The profit earned from the sales of the candidate in those markets will be shared equally by the companies. However, Regeneron owns the entire US rights pertaining to Eylea.
Apart from wet AMD, Bayer and Regeneron are studying Eylea for other eye-disorders also.
Our Recommendation
Currently, we have a Neutral stance on Regeneron for the long run. The company carries a Zacks #3 Rank (Hold rating) for the short run.
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