Regeneron Pharmaceuticals and Sanofi said Monday their blockbuster drug, Dupixent, significantly improved symptoms for patients with a chronic lung disease. REGN stock was flat midday.
Piper Sandler analyst Christopher Raymond called the results the "best case scenario" for Dupixent in treating chronic obstructive pulmonary disease, or COPD.
Over 52 weeks, patients who received Dupixent experienced a 34% decline in exacerbations, or flare-ups of COPD symptoms. Symptoms include shortness of breath, wheezing, chest tightening, cough, infections and lack of energy, according to the Mayo Clinic.
Now, Regeneron and Sanofi are planning to ask the Food and Drug Administration to approve their drug for COPD treatment before year-end. One analyst says adding COPD treatment to Dupixent's approvals could add $4 billion in future global sales.
"We continue to model a 2025 COPD approval and launch with revenue growing to $1.5 billion by fiscal year 2026, but this scenario clearly opens an avenue to pull this revenue stream forward meaningfully," Raymond said in a report.
On the stock market today, REGN stock closed roughly flat at 798.08. SNY stock rose 1% to 47.67.
REGN Stock: Expanding A Blockbuster
Dupixent is already a major blockbuster for Regeneron and Sanofi, bringing in $3.1 billion in third-quarter sales. It treats allergic conditions tied to type 2 inflammation, including eczema, asthma and nasal polyps. This inflammation is meant to fight parasites, but can become overzealous and lead to diseases in some people.
The results Monday come from an interim analysis of a second Phase 3 study of Dupixent in COPD treatment. In addition to reduced exacerbations, patients who received Dupixent also had improved lung function compared to placebo recipients.
Raymond says the update could pull approval forward by several quarters to the second half of 2024. He kept his overweight rating on REGN stock, and didn't list a rating for SNY stock.
"Overall, with Dupixent continuing to outperform expectations, coupled with meaningful pipeline progress and increasingly clear line-of-sight to earnings inflection, we continue to view Regeneron as best-of-breed biotech large-cap," he said.
Patient Deaths Could Face Scrutiny
RBC Capital Markets analyst Brian Abrahams noted more Dupixent patients in this study died after experiencing side effects than placebo recipients — 2.6% vs. 1.5%, respectively. But that could be due to the higher ages of patients enrolled in this study, he said in a report.
"Though we see a possibility that regulators could scrutinize this, the rate could be within the expected range given the severity of these patients, and the company indicated to us that in a pooled safety analysis there was no imbalance of deaths," he said.
He expects approval in COPD treatment could add $4 billion in future worldwide sales for Dupixent. The companies estimate there are 300,000 patients in the U.S., alone, who could benefit from the potential approval.
"We believe 2024 Dupixent numbers look light as well (our $14.4 billion estimate vs. Street's $13.3 billion) even without any COPD sales," he said.
However, he notes Dupixent's patents expire in 2032. That will somewhat limit upside from further expansion into other diseases, he said. Abrahams kept his sector perform rating on REGN stock. He doesn't cover SNY stock.
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