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Sanofi [NYSE:
SNY] and Regeneron Pharmaceuticals [NASDAQ:REGN] said on Sunday that their results from a pivotal Phase 3 study,
SARIL-RA-TARGET, of sarilumab, an investigational interleukin-6 receptor (IL-6R) inhibitor, met all endpoints. Sarilumab is a fully human monoclonal antibody, which binds to the IL-6 receptor and interrupts the resultant cytokine-mediated inflammatory signaling. Sarilumab was developed using Regeneron's VelociGene technology, in which 6 megabases (6 million units) of mouse DNA that code for the production of immune system proteins
(immunoglobulin) are replaced with the corresponding human DNA.
Sarilumab is being studied in rheumatoid arthritis (RA) patients who did not adequately respond to or were intolerant of tumor necrosis factor
TNF-alpha inhibitors. AbbVie [NYSE:ABBV]’s Humira, a blockbuster drug, is a
TNF-alpha inhibitor. Analysts estimate sarilumab’s peak sales of $1 billion. Sanofi and Regeneron recently submitted a Biologics License Application
(BLA) for sarilumab to the U.S. Food and Drug Administration (FDA).
Regeneron Pharmaceuticals announced its earnings report last Wednesday and raised the sales forecast of its blockbuster eye drug, Eylea
(aflibercept). In the third-quarter ended September 2015, Regeneron reported total revenues of $1.14 billion, up 57% year-over-year and
non-GAAP (adjusted) EPS of $3.47, up 38% year-over-year. Wall Street was expecting earnings of $3.20 per share on revenues of $1.06 billion. The company said that it now expects U.S. Eylea sales to rise 50% to 55% over 2014, up from its previous guidance of 40% to 50%.
Regeneron reported sales of Eylea in the United States of $734 million, up 65% year-on-year. Net sales of Eylea outside of the United States were $371 million, up 33.9% from $277 million in the second-quarter of 2014. Regeneron and Bayer HealthCare
[OTCMKTS:BAYRY] commercialize Eylea outside the United States, except for Japan, where Regeneron receives a royalty on net sales. In the third-quarter 2015, Regeneron recognized $131 million from its share of net profits from Eylea sales outside the United States, up 54.12% from $85 million in same period last year.
Eylea is a VEGF inhibitor indicated for the treatment of patients with neovascular (wet) age-related macular degeneration (AMD), macular edema following retinal vein occlusion, diabetic macular edema
(DME), and diabetic retinopathy. The drug was first approved in June 2011 by the FDA for the treatment of wet AMD, a leading cause of blindness in the elderly.
During Regeneron's last quarter earnings conference call, the company told analysts that the bulk of Eylea’s growth is coming from DME, both in terms of growing the DME market overall for the anti-VEGF class, as well as taking market share from both Roche’s [OTCMKTS:RHHBY] Lucentis (ranibizumab) and Avastin (bevacizumab).
About 30% of Regeneron’s total revenues is generated from its partners, with Bayer HealthCare collaboration revenue as $157.6 million in the third-quarter 2015, up 16% year-over-year from $135.9 million and Sanofi's collaboration revenue in the same period as $224.7 million, up 69.1% year-over-year from $132.9 million. As of June 2014, Sanofi holds approximately 22.5% of Regeneron’s shares outstanding.
In July, the FDA approved Sanofi and Regeneron's Praluent (alirocumab), a monoclonal antibody targeting proprotein convertase subtilisin/kexin type 9 (PCSK9), for the treatment of adults with heterozygous familial hypercholesterolemia or clinical atherosclerotic cardiovascular disease (ASCVD), who require additional lowering of low density lipoprotein (LDL) cholesterol. In the third-quarter of 2015, net sales of Praluent in the United States were $4 million. Product sales for Praluent are recorded by Sanofi, with Regeneron sharing in any profits or losses from the commercialization of Praluent.
Since its launch, Praluent has taken in about $11 million, missing the consensus estimate of $24 million. During Regeneron's earnings conference call, Robert Terifay, a senior vice president, said that the launch is slow because payers are taking time to assess their reimbursement policies and preferred formularies, so the company is providing free prescriptions to many patients with immediate need.
Praluent is competing with Repatha (evolocumab), another PCSK9 inhibitor drug developed by Amgen [NASDAQ:AMGN]. Praluen, Repatha and other PCSK9 inhibitor drugs act by identifying and knocking out PCSK9 enzymes in the liver, and hence lowers the amount of LDL cholesterol in the blood.
Regeneron said multiple Phase 3 studies of dupilumab in atopic dermatitis are currently underway. The Phase 2 study in atopic dermatitis in adolescents and children completed enrollment. Dupilumab, an antibody co-developed by Regeneron and Sanofi, is designed for the treatment of adult patients with moderate-to-severe asthma, who are uncontrolled despite treatment with inhaled corticosteroids and long-acting beta agonists (ICS/LABA). Leerink Swann analyst Joseph Schwartz projected peak annual sales for dupilumab at $2.8 billion for two indications — asthma and atopic dermatitis.
According to FierceBiotech, the analyst believes that the drug could also hit the mark for chronic obstructive pulmonary disease (COPD), a group of lung diseases including emphysema and chronic bronchitis, that block airflow and make breathing difficult. Nearly 27 million people in the U.S. are affected by COPD.
Additional antibody pipelines with Sanofi include Fasinumab (REGN475), a fully human monoclonal antibody against nerve growth factor for the treatment of pain, REGN2222, REGN2176-3, REGN2810, REGN1500, and REGN1033.
Shares of REGN are up about 2.35%, recovering along with the biotech and healthcare sectors, since September 21 when U.S. presidential candidate Hillary Clinton sent the sectors tumbling when she went on a Twitter frenzy and sent out a tweet about “outrageous” price gouging by a pharmaceutical CEO and that she would reveal her own drug affordability plan. Many believe that Clinton's plan will not go anywhere since several items in her proposal would be very difficult to pass in Congress.
The 12-month target price for REGN on Yahoo Finance is $625.84 per share. Regeneron will report its fourth-quarter 2015 earnings in February 2016. Analysts are expecting earnings of $3.41 per share, up 22.2%, on revenues of $1.17 billion, up 45.60%.
Disclosure: Long positions REGN and ABBV. No positions in any other companies mentioned. |
