Health and Healthcare

Regeneron Downgrade Highlights at Least Some Risks

Jon C. Ogg

Published: January 27, 2016 12:40 pm

Last Updated: January 13, 2020 2:30 pm

Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) seems to have held up rather well against an analyst downgrade on Wednesday. Canaccord Genuity lowered its official rating to Hold from Buy. While the downgrade may not be positive, the firm’s John Newman slashed his Regeneron price target to $525 from $700 in his call.

The reasons that Canaccord Genuity targeted were moderating EYLEA growth, a slow Praluent start and competitive risks in 2016.

Praluent’s launch trajectory was targeted in this report as slower than expected. The blame is residual price concerns, followed by an injectable formulation and a typical flatter trajectory for lipid therapies. Newman further said that he was lowering U.S. peak sales estimates to $1.4 billion by 2025 from his prior peak view of $2.6 billion. He is also concerned that Amgen’s data outcomes will surface ahead of Regeneron’s and could give Amgen a temporary but slight advantage.

All in all, the belief here in the downgrade is that Regeneron’s pipeline should produce attractive, wholly owned growth drivers. The partnered assets are another matter, and the report signals that the upside numbers from partnered assets are priced into the stock.

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