Will Eylea & Dupixent Drive Regeneron's (REGN) Q4 Earnings?

Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is scheduled to release fourth-quarter 2019 results on Feb 6, before the opening bell.

The company has a decent track record. In the last reported quarter, the company beat earnings expectations by 5.37%. It surpassed earnings estimates by 4.32%, on average, in the last four quarters.

Let’s see how things are shaping up for the upcoming announcement.

Why a Likely Earnings Beat

Our proven model predicts an earnings beat for Regeneron this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Regeneron has an Earnings ESP of +5.39% as the Zacks Consensus Estimate is pegged at $6.90 and the Most Accurate Estimate at $7.28.

Zacks Rank: The company has a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors at Play

Regeneron’s key drug, Eylea, drove performance in the first nine months of 2019, a trend that most likely continued in the fourth quarter. Eylea was developed in collaboration with Bayer (DE:BAYGN) AG (OTC:BAYRY) . The drug is approved in the United States, the EU, Japan and other countries for the treatment of neovascular age-related macular degeneration (wet AMD), diabetic macular edema (DME) and macular edema following retinal vein occlusion, which includes macular edema following central retinal vein occlusion and macular edema following branch retinal vein occlusion.

Apart from Eylea, investors will be focusing on Dupixent’s performance and label expansion.

Asthma drug Dupixent’s sales were impressive in the first nine months of 2019 on continuous label expansion and the trend is expected to have continued in the fourth quarter. Label expansion of the drug in the last few months has most likely boosted sales further. In October 2019, the EC approved Dupixent in chronic rhinosinusitis with nasal polyposis (CRSwNP). The European Commission approved another label expansion of the drug to include adolescents aged 12-17 years with moderate-to-severe atopic dermatitis (AD), who are candidates for systemic therapy.

Investors will also focus on the performance of PCSK9 inhibitor, Praluent and Libtayo. Sales of Libtayo came in at $51.5 million in the third quarter. Sales have most likely recorded a sequential growth in the fourth quarter. Libtayo is being jointly developed by Regeneron and Sanofi (NASDAQ:SNY) under a global collaboration agreement.

Praluent sales came in at $69.7 million in the third quarter. In April 2019, the FDA approved a label expansion of the drug to reduce the risk of heart attack, stroke and unstable angina requiring hospitalization of adults suffering from established cardiovascular (CV) disease. Hence, this is likely to have driven sales in the fourth quarter.

Apart from top-line numbers, investors will focus on Regeneron's pipeline updates. The supplemental Biologics License Application (sBLA) for asthma drug Dupixent (dupilumab) has been accepted by the FDA for Priority Review. The company is seeking approval of the drug as an add-on maintenance treatment for children 6-11 years with moderate-to-severe AD, whose disease is not adequately controlled with topical prescription therapies or when those therapies are not advisable. The FDA set an action date of May 26, 2020.

Investors will also be keen on an update on the company’s collaboration agreement with Sanofi. In December 2019, Regeneron and Sanofi announced their intent to simplify their antibody collaboration for Kevzara and Praluent by restructuring it into a royalty-based agreement. Under the proposed restructuring, Sanofi is expected to gain sole global rights to Kevzara and sole ex-U.S. rights to Praluent. Regeneron is expected to gain sole U.S. rights to Praluent. The existing collaboration relating to Dupixent will remain unchanged following the restructuring.

Share Price Performance

Regeneron’s stock has lost 20.5% in the past year compared with the industry’s decline of 9.1%.

Another Stock to Consider

Here is another stock you may want to consider, as our model shows that this too has the right combination of elements to post an earnings beat this quarter.

Merck (NYSE:MRK) has an Earnings ESP of +1.05% and a Zacks Rank #3. The company is scheduled to release results on Feb 5.

Free: Zacks’ Single Best Stock Set to Double

Today you are invited to download our latest Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.

This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain.

See 5 Stocks Set to Double>>