NEW YORK (TheStreet) -- Shares of Regeneron Pharmaceuticals, Inc. (REGN) are surging this afternoon, up 6.64 to $301.23, after Sanofi (SNY) increased its stake in the biopharmaceutical firm although it has said it doesn't plan to buy the company, according to the Wall Street Journal.
Sanofi now holds about 22.5% of Regeneron's shares outstanding, up from 20.5%, according to a regulatory filing released today.
Sanofi said it plans to acquire the additional shares on the market, in private transactions or through derivatives, the Journal said.
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Shares of Sanofi are up 0.43% to $53.40.
TheStreet Ratings team rates REGENERON PHARMACEUTICALS as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate REGENERON PHARMACEUTICALS (REGN) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, poor profit margins and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 25.6%. Since the same quarter one year prior, revenues rose by 42.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- REGN's debt-to-equity ratio is very low at 0.24 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 5.56, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for REGENERON PHARMACEUTICALS is currently lower than what is desirable, coming in at 31.56%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 10.45% significantly trails the industry average.
- Net operating cash flow has decreased to $53.53 million or 37.93% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: REGN Ratings Report