Last week, Regeneron Pharmaceuticals, Inc. (REGN) announced the completion of enrollment in two late stage studies of its VEGF (vascular endothelial growth factor) trap-eye treatment for age-related macular degeneration (wet AMD), a leading cause of blindness in adults. Each of the randomized, double-masked trials has enrolled more than the target of 1,200 patients.

The company is developing the drug in partnership with Bayer HealthCare (BAYRY.PK). The study will be a non-inferiority comparison of the VEGF trap-eye with ranibizumab (Lucentis from Genentech, Inc- now a wholly owned subsidiary of the Roche group (RHHBY.PK)), an anti-angiogenic agent approved for use in wet AMD. The company expects one-year primary endpoint data from both studies in the fourth quarter of 2010.

As a reminder, Regeneron and Bayer HealthCare entered into a collaboration agreement in Oct 2006 for the development and commercialization of the VEGF trap-Eye outside the United States . The two companies agreed to collaborate and share the costs of development of the VEGF trap-eye through an integrated global plan including wet AMD, diabetic macular edema (DME), and Central Retinal Vein Occlusion (CRVO).

The duo will equally split the profits from ex-U.S. sales of the VEGF trap-eye. Within the US , Regeneron has retained exclusive commercialization rights in all indications and will retain 100% of all profits.

Regeneron recently suffered a pipeline setback when together with its collaboration partner Sanofi-Aventis (SNY), it halted the development of the late-stage pipeline candidate, aflibercept, for the treatment of pancreatic cancer. This was because the study showed that patients on aflibercept were not surviving significantly longer than those in the placebo group. The pipeline setback had a negative impact on the company’s stock price and any such pipeline failure in the future will also weigh heavily on Regeneron’s shares.

Currently, we are Neutral on Regeneron.
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