Regeneron’s (REGN) COVID-19 treatment candidate took a step closer to fruition this week after the company released preliminary data from the Phase 1/2/3 trial of its antibody cocktail REGN-COV2 in non-hospitalized COVID-19 patients.
Results for the first 275 trial patients showed the antiviral drug cocktail lowered the viral levels and sped up recovery. The study examined two different doses of REGN-COV2 in two groups of patients: those who on their own had mounted an effective immune response (seropositive), and those who hadn’t yet mounted an adequate immune response (seronegative), with the most effect displayed in patients from the seronegative group. According to Regeneron management, the results suggest REGN-COV2 could work as a therapeutic substitute for the naturally occurring immune response.
Cowen analyst Yaron Werber believes so too and calls the data “promising.”
The 5-star analyst anticipates further updates in 4Q20/1Q21 and believes EUA (emergency use authorization) is likely in 1H21.
Questions have been raised as to the commercial opportunity for neutralizing antibodies, as vaccines are expected to enter the market in 2021.
While the rollout of vaccines is expected to be gradual over the first half of next year, Werber anticipates “REGN-COV2 will play an important role.” However, Werber believes this role will mostly be as a therapeutic in newly infected patients and unlikely to be a “game changer” due to the treatment’s limited manufacturing capacity.
Expounding on this, Werber said, “In terms of capacity, Regeneron will have ~300k doses ready by YE ’20 or around that time. In FY21, Regeneron/Roche will have capacity to deliver ~250k low treatment doses per month when Roche is fully scaled up, which translates to 3M low treatment doses or 6M prevention doses per year. Note that this updated capacity is lower than our original estimate of ~1M doses per month… Capacity is a challenge with peak of 3M as therapeutics and 6M as prevention annually when Roche is fully scaled up.”
All in all, Werber reiterated a Market Perform (i.e. Hold) on REGN shares alongside a $684 price target, which implies a 20% upside from current levels. (To watch Werber’s track record, click here)
Overall, Regeneron’s ratings are almost evenly split, with the bulls edging ahead. Based on 8 Buys and 7 Holds, the stock has a Moderate Buy consensus rating. At $674.38, the average price target suggests upside of 19% could be in the cards over the next 12 months. (See Regeneron stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
