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Regeneron Posts Rare Sales Miss But Counters With Early FDA Filing

Stocks in this article: REGN RHHBY

TARRYTOWN, NY ( TheStreet) -- Regeneron Pharmaceuticals' (REGN) streak of trouncing Wall Street sales expectations for sales of its eye drug Eylea came to an end in the second quarter, but the company said Tuesday that a new filing seeking expanded approval for the drug to treat diabetes-related vision loss will be filed this year, one year ahead of schedule.

The new drug application will be supported by results -- also announced Tuesday -- from two, large phase III studies demonstrating Eylea improved vision in patients diagnosed with diabetic macular edema (DME).

Regeneron shares were down 4 percent to $260 per share in Tuesday's pre-market trading.

Previously, Regeneron had not expected to seek U.S. and European approval for Eylea in DME until the company had two years of data from its phase III studies. But following discussions with the FDA, Regeneron said an approval filing would be completed with just a single year of data from the studies.

Bayer, Regeneron's Eylea marketing partner in Europe, will also seek approval for Eylea in DME by the end of the year.

Eylea is currently approved to treat wet age-related macular degeneration, a leading cause of blindness in the elderly. Eylea sales in the second quarter totaled $426 million, including $330 million in the U.S., which was just a few million dollars short of Wall Street expectations.

Regeneron did raise 2013 Eylea sales guidance to a range of $1.3 billion to $1.35 billion, but the high end of previous guidance was already at $1.325 billion.

If second-quarter results are an indication that Eylea sales growth is moderating from its typical torrid pace, the early DME approval filing is well timed.

Eylea has been stealing market share from Roche's (RHHBY) similar drug Lucentis in wet age-related macular degeneration, but Lucentis had the DME market all to itself. That will change if and when Eylea is approved.

In both phase III studies, patients with DME were randomized to treatment with monthly injections of Eylea into the eye, Eylea injections every two months (after five monthly injections) or a comparator treatment of laser photocoagulation.

In one of the studies, patients treated with monthly Eylea for one year, on average, improved vision by 12.5 letters on an eye chart. The patients treated every two months with Eylea saw their vision improved by 10.7 letters. These results were statistically superior to patients in the control group, with improved vision of just 0.2 letters.

In the second study, Eylea-treated patients improved vision by 10.5 letters and 10.7 letters in the monthly and every-two-month arms compared to 1.2 letters for the control group.

The improvements in vision attributed to Eylea were all statistically signficant over control in both studies.

-- Reported by Adam Feuerstein in Boston.

Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.

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