Regeneron Earnings: Raising Our Fair Value Estimate to $830 on Eylea HD and Dupixent Strength

We’re raising our Regeneron fair value estimate to $830 from $750 following solid 12% top-line growth and 13% non-GAAP EPS growth in the second quarter. Performance was driven by a promising transition of sales from ophthalmology drug Eylea to high-dose Eylea, as well as global sales of Sanofi and Regeneron’s immunology drug Dupixent ahead of our expectations. Regeneron’s reported US sales of Eylea and Eylea HD grew 2% to more than $1.5 billion in the quarter, as patients transitioned to the newer high-dose product and more new patients initiated therapy, drawn by the convenience of less-frequent eye injections. We’re impressed by Regeneron’s performance despite the very strong competing US launch of Roche’s Vabysmo, which grew 68% in the second quarter to more than CHF 700 million in US sales. We now think that US Eylea/Eylea HD sales could grow to $6.5 billion in 2027 ahead of biosimilar competition and potential Medicare negotiation. Dupixent sales grew 27% and Regeneron’s collaboration revenue from Sanofi grew 21%, as sales of the key immunology drug benefit from expanding market share, indications, and geographic reach. Dupixent is now approved in COPD in Europe and should receive US Food and Drug Administration approval in this new indication in September, which should further support our expectation of $21 billion in global Dupixent revenue by 2029. Overall, we think Regeneron’s Eylea and Dupixent support a narrow moat, with further expansion into oncology or rare diseases adding a potential pathway to a wide moat.