Regeneron Stock Up On BARDA Deal For MERS Antibodies

Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) announced an agreement with the U.S. Department of Health and Human Services’ (HHS) Biomedical Advanced Research and Development Authority (BARDA) to manufacture and study two antibody therapies for the prevention and treatment of Middle East respiratory syndrome (MERS). The company’s shares gained 3.6% on the news.

Regeneron’s proprietary technologies, VelociGene and VelocImmune, have enabled rapid identification and preclinical validation of antibody candidates. These two MERS antibodies have been discovered and developed under Regeneron's antibody discovery and pre-clinical development agreement with Sanofi (NYSE:SNY) and are subject to opt-in rights of Sanofi for their development and commercialization.

Under the MERS deal, HHS agreed to provide up to $8.9 million in funding to Regeneron to support packaging and labeling of the antibodies for human use (known as "fill and finish"), preparation and submission of an investigational new drug application to the FDA, and a National Institutes of Health-conducted study in healthy volunteers.

We remind investors that Regeneron and BARDA already have an agreement for the discovery and development of a treatment for Ebola virus by Regeneron. A phase I study on the Ebola virus treatment in healthy volunteers was initiated in the second quarter of 2016. The company also received orphan drug status from the FDA for the Ebola virus treatment in the quarter.

We are positive on the latest deal. Currently, there is no approved medicine or vaccine for the treatment or prevention of MERS, a disease characterized by severe respiratory tract infections and high death rates, as per the company’s press release. Cases of MERS have been reported in the Middle East, South Korea, Europe, the U.S., Africa and other countries in Asia.

In addition to the MERS and Ebola programs, Regeneron is moving ahead with a pre-clinical program targeting the Zika virus. The company has built a unique rapid response platform to address emerging infectious disease threats.

Regeneron is a Zack Rank #2 (Buy) stock. A couple of other favorably placed stocks in the health care sector are ANI Pharmaceuticals, Inc. (NASDAQ:ANIP) and Geron Corporation (NASDAQ:GERN) . Both the stocks sport a Zacks Rank #1 (Strong Buy).