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Regeneron Upgraded to Buy at Citi on Eczema Drug Potential

The 'recent weakness in [Regeneron's stock] is overlooking the pace of Dupixent’s growth and expansion potential,' Citi said, upgrading the stock.
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Regeneron Pharmaceuticals  (REGN) - Get Regeneron Pharmaceuticals Inc. Report shares rose Friday after Citi analyst Mohit Bansal upgraded the biotechnology company to buy from neutral on optimism about its eczema drug, Dupixent.

He lowered his price target to $575 from $635. But that’s still well above the recent price of $498.40, which is up 3.6% from Thursday.

The stock has dropped 18% since Oct. 13, and Bansal says investors are focusing too much on weakness in Regeneron’s eye treatment, Eylea, and not enough on Dupixent.

Eylea is “gradually becoming a smaller part of the story,” he wrote in a commentary, according to Seeking Alpha. The “recent weakness in the name is overlooking the pace of Dupixent’s growth and expansion potential.” 

Dupixent has plenty of potential for growth beyond its current label, Bansal said, according to Dow Jones.

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Regeneron also has potential in the cancer space now, he said, citing Libtayo in particular. The company’s “oncology pipeline is a free call option.” Regeneron is on course to become an important force in cancer treatment, Bansal said.

He sees a “strong” fundamental outlook for the company, with 8% annual revenue growth and 11% earnings growth through 2025, The Fly reports. Regeneron shares appear cheap, Bansal said.

Regeneron in November received emergency approval for its coronavirus cocktail therapy from the Food and Drug Administration.

The company’s Regn-Cov2 treatment combines two monoclonal antibodies designed to prevent the infectivity of SARS-CoV-2, the virus that causes covid-19.

Regeneron said the approval is for individuals who are at high risk for progressing to severe  covid-19 or possible hospitalization.