Regeneron Still Has ‘Significant Upside’

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By Sam Boughedda

A Morgan Stanley analyst upgraded shares of Regeneron (NASDAQ:) to Overweight from Equal-Weight, raising the firm’s price target on the stock to $851 from $625 in a note to investors on Friday.

The upgrade is on the back of news Regeneron’s Eylea drug met two primary endpoints and is shown to work when given at 8 mg at longer intervals, without any additional safety issues. The analyst said they are upgrading the stock as the Eylea tail risk is now removed.

“While we realize we are chasing a significant move after the high-dose Elyea data, we still see significant upside driven by a clear growth trajectory at the company: (1) high dose Eylea (8 mg) now becomes the agent of choice for front line patients, (2) Dupixent remains in the long-term growth position and is likely to achieve $20B+ in peak sales, still ahead of consensus, (3) the advancing oncology pipeline can now provide the next leg of growth, and (4) the sizeable cash position provides significant optionality,” wrote the analyst.

He added that the firm’s retina survey points to high-dose Eylea quickly becoming the leading agent.

“Overall, we now see REGN as the preferred large-cap growth name supported by a range of products delivering durable revenues and an advancing oncology pipeline with the potential to diversify the base business,” the analyst declared.

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