Pfizer said Monday morning it plans to spend $5.2 billion to acquire Anacor Pharmaceuticals (ANAC , through which it will gain access to Crisaborole, an anti-inflammatory drug currently under U.S. Food and Drug Administration review for the treatment of mild-to-moderate atopic dermatitis, commonly referred to as eczema.
But according to Jefferies analyst Biren Aimin, the stock's movement on Monday has more to do with a Saturday article by Barron's, which made a case that Regeneron is positioned as "the best bet in biotech stocks". The report argues that shares of Regeneron could grow 35% in a year.
Company followers agree that Regeneron, a nearly $40.1 billion market cap company as of Monday, sits in a strong position from a pipeline perspective.
While the focus has been almost elusively on Regeneron's eye therapy Eylea, investor eyes are beginning to shift to what remains a very rich pipeline, noted Brean Capital analyst Jason Wittes.
"The good news is that even if Eylea gets long in the tooth, even if growth slows down, these [pipeline drugs] will pick up the slack," Wittes said. "Dupilumab is the most interesting."
Dupilumab, a treatment for moderate-to-severe atopic dermatosis in adults, is expected to launch in the mid-2017. Meanwhile, the FDA is expected to make its approval decision on Pfizer's Crisaborole by Jan. 7, 2017.
"It's an interesting new market opportunity that hasn't been tapped by pharma companies," Wittes said, referring to the eczema market. "These patients are highly symptomatic so they're not going to wait around."
Eylea will likely continue to grow steadily, and at least one additional trial for the company this year could potentially expand the patient population even further, he said.
At the same time, investors are currently awaiting the results of a patent infringement case on the anti-cholesterol drug anticipated this summer. Amgen in March won a patent dispute in a U.S. District Court against Amgen and Praulent's development partner Sanofi, following which the latter two appealed. If the judge in its final verdict issues a permanent injunction, Regeneron will probably have to take Praulent off the market.
"Where Praulent expectations are going into the end of the year are going to be key," Aimin said.