Recently, Regeneron Pharmaceuticals (REGN) and partner Bayer (BAYRY) announced positive data from late-stage studies of its VEGF (vascular endothelial growth factor) trap-eye treatment for age-related macular degeneration (wet AMD). The condition results from 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. The disorder is the leading cause of blindness in patients aged over 65 in the US and Europe.

VEGF trap-eye refers to a specially purified and formulated form of VEGF trap. It is used in the intraocular treatment of retinal diseases. The studies evaluated the efficacy of VEGF trap-eye versus Roche’s (RHHBY) Lucentis (ranibizumab), an anti-angiogenic agent approved for use in wet AMD. Regeneron’s eye treatment was found to be as effective as Lucentis, the only drug approved by the US Food and Drug Administration (FDA) for treating the disease. Both Lucentis and Regeneron’s eye candidate aim to inhibit VEGF, which refers to a protein for stimulating the growth of new blood vessels.

Both the North American study (n=1217) and the international study (n=1240) evaluated VEGF trap-eye for the maintenance and improvement of vision at 0.5mg monthly, 2mg monthly or 2mg every two months (following three monthly loading doses), as against Lucentis injected at 0.5mg every month during the first year of the studies.

The partners expect to present further data in February 2011 with filings in the US and Europe expected to be submitted in the first half of next year. The approval of the candidate would not only bolster Regeneron’s top line but would provide additional options for patients suffering from the eye-disease which currently has only one FDA approved therapy.

Our Recommendation

Currently, we have a “Neutral” stance on Regeneron in the long run, which is supported by the Zacks #3 Rank (short-term Hold recommendation) carried by the company.

However we are positive on Bayer and have recently upgraded the company to “Outperform” based on its strong third quarter 2010 results and the positive outlook maintained by the company. Our long-term stance is supported by a Zacks #1 Rank (short-term” Strong Buy” recommendation).

 
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