Canaccord Slices Regeneron Price Target 32% On Eylea, Dupixent Challenges

Regeneron Pharmaceuticals Inc REGN shares fell 31 percent over the last six months, and the company's headwinds appear unending.

The biotech firm lost an advocate Wednesday on the basis of a rough outlook for Eylea and Dupixent treatments.

The Rating

Canaccord Genuity analyst John Newman downgraded Regeneron from Buy to Hold and cut the price target from $522 to $356.

The Thesis

Regeneron’s Eylea — seen as a core revenue driver — may face competition from Novartis AG (ADR) NVS’s brolucizumab and Roche’s RG7716 within the next two years, and this threat compounds concerns over discontinued guidance, Newman said in a Wednesday note. (See the analyst's track record here.) 

“Also, unlike most biotech drugs, price increases for EYLEA are very difficult and unlikely given low-cost competition from off-label Avastin use,” Newman said. “In addition, we are surprised at the lack of guidance since EYLEA has continued to grow well for a $4-billion drug in the U.S."

At the same time, the analyst anticipates sales-stunting challenges for Dupixent. Regulatory approval for pediatric indications, which comprise two-thirds of the market, may be delayed until 2021 and compound competition from the likes of Abbvie Inc ABBV, whose asthma treatment could alter Dupixent’s peak revenue estimates.

Price Action

At the time of publication, Regeneron shares were down 0.66 percent at $320.92. 

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