It's been a decade since the last innovation in treating chronic obstructive pulmonary disease, or COPD, a devastating breathing disorder with no cure. But that could change soon with major new innovations that could boost Regeneron stock and shares of rivals like Verona Pharma.
The Food and Drug Administration is set to make a decision in two weeks on Verona's COPD drug, ensifentrine. The FDA is also scheduled to make a decision in September on whether to expand the approval for Dupixent, a Regeneron and Sanofi blockbuster, to include COPD treatment.
The potential approvals would be a breath of fresh air for the up to 11.7 million Americans struggling with COPD.
"Many of these patients struggle just walking to the mailbox, struggle walking down the street with a dog, playing with a grandchild," Verona Chief Commercial Officer Christopher Martin told Investor's Business Daily. "The idea (that) there are new ways to treat these patients with different pharmacological (mechanisms of action) is exciting to them."
Regeneron Stock: COPD Treatment On Deck
The news could be a boon for Regeneron stock.
Shares recently topped 1,000 for the first time on June 3 as they broke out of a cup-with-handle base and a buy point at 997.87, MarketSurge shows.
Verona shares were on a four-day run, as of midday Wednesday, amid high expectations for the COPD treatment market. Shares peaked in January 2023, but a first-ever drug approval for a first-in-class drug, could, potentially, dig the biotech stock out of its doldrums.
COPD is a chronic condition that obstructs airflow from the lungs. Patients often experience difficulty breathing, coughing, excessive sputum production and wheezing, according to the Mayo Clinic.
Estimates vary on how many people have COPD. Depending on the source, between 8.6 million and 11.7 million American adults have the disease. A major problem is many people don't know they have it. Additionally, Verona's Martin says roughly half of people receiving COPD treatment still experience symptoms.
Verona and Regeneron are the closest to the finish line with two different approaches to treating COPD. There is "immense interest" in new COPD treatments, Piper Sandler analyst Christopher Raymond said in a recent report, citing a doctor who treats more than 200 patients annually with the disease.
If the FDA approves ensifentrine later this month, it would shift Verona into the big leagues — pushing the biotech company into the long-awaited transition to the commercial stage. Chief Executive David Zaccardelli acknowledged that can be a "quite rare" move for biotech companies.
"It's the culmination of many years of work, research and progress," he told IBD. "It's very exciting, of course, to bring ensifentrine to physicians and patients. Clearly, there's a huge unmet medical need, so we're very excited about that."
Verona Vs. Regeneron?
There are key differences between ensifentrine and Dupixent. For that reason, Zaccardelli says, "We don't see (ensifentrine) as competing (with Dupixent) at all."
Dupixent is famously known for blocking IL-4, an inflammatory cytokine. It's why Dupixent treats seemingly different conditions like eczema, asthma and chronic nasal inflammation. The underlying cause of these diseases is type 2 inflammation, measured by high levels of white blood cells called eosinophils. Tamping down on IL-4 lowers type 2 inflammation.
For that reason, Regeneron and Sanofi tested Dupixent, a shot, in patients with moderate to severe COPD and evidence of type 2 inflammation.
Ensifentrine, an inhaled drug, uses a different mechanism. It blocks two enzymes called PDE3 and PDE4. This allows it to act as an anti-inflammatory and a bronchodilator — relaxing the muscles in the lungs and widening the airways. Verona tested its drug across patients regardless of the type of inflammation.
Both reduced COPD exacerbations, or flare-ups of the disease. Over a year, Dupixent patients had 30% fewer flare-ups. In comparison, pooled data from two studies showed ensifentrine recipients had a 40% reduction in moderate to severe exacerbations over 24 weeks.
Regeneron Stock: COPD 'Home Run'
Regeneron stock surged almost 7% on March 23, 2023, the day the company unveiled the results for Dupixent in COPD treatment. Sanofi stock also jumped 6%. Piper Sandler analyst Christopher Raymond called the results a "home run."
Shares of Verona posted an even more bullish gain on Dec. 20, 2022, when the company revealed its final-phase test results for ensifentrine. The biotech stock skyrocketed nearly 38%.
But neither team is resting on its laurels.
Paul Rowe, the head of medical and specialty care for North America at Sanofi, says 40% of people with moderate to severe COPD have type 2 inflammation. Regeneron and Sanofi are also studying a second drug, known as itepekimab, to help another 40% of COPD patients who don't have type 2 inflammation.
Verona is also testing ensifentrine in other lung conditions, including bronchiectasis, cystic fibrosis and asthma.
Rivals Face Off With Regeneron Stock
The companies are far from alone in the burgeoning COPD treatment market.
Amgen and AstraZeneca tested their drug, Tezspire, in patients with COPD. Midstage test results were mixed, however, and Amgen stock inched just a fraction ahead. Tezspire recipients experienced just a 17% reduction in COPD exacerbations after a year.
But patients with higher eosinophils — which suggests they have type 2 inflammation — had 37% to 46% fewer flare-ups, Mizuho Securities analyst Salim Syed said in a report. This could put Tezspire on deck to rival Dupixent.
Like Regeneron stock, Amgen shares are trying to break out of a cup with handle and a buy point at 322.60.
AstraZeneca is also testing its inhaler Fasenra in patients with the lung disease. Fasenra blocks IL-5, an inflammatory cytokine found in eosinophils. The company had two earlier flops in COPD treatment, but is now running a Phase 3 study of more than 600 patients with a history of exacerbations and high eosinophils. That test is expected to wrap in June 2025.
AstraZeneca stock is currently in a buy zone after breaking out of a cup base with an entry at 76.56.
Lofty Expectations For COPD Treatments
GlobalData analyst Asiyah Nawab says the COPD treatment market is one to watch.
"Dupixent has the potential to dominate the market if the biologic receives approval following the FDA's decision, which is expected to be announced in June 2024," Nawab said in a report. "At present, the COPD late-stage pipeline looks promising, representing a new age of therapies and one to keep an eye on."
This would be Dupixent's seventh potential approval, Sanofi's Rowe said. So, it has the potential to push Regeneron stock to new highs.
Under their collaboration agreement Sanofi records global net sales of Dupixent, and Regeneron takes a share of its profits. Dupixent is, by far, Sanofi's biggest moneymaker. This year, analysts expect it to bring in just north of $14 billion in sales, growing almost 21%, according to FactSet.
RBC Capital Markets analyst Brian Abrahams just raised his price target on Regeneron stock to 1,229 from 1,200. A survey of 31 pulmonologists suggests 20% of patients with COPD could eventually be on Dupixent. That would translate into $20 billion in U.S. sales just in 2026.
That's "far above our prior $1.4 billion estimate and we believe what realistic usage would be," he said in a June 12 report. "But we believe it does illustrate the very high appetite among clinicians to prescribe this broadly."
He sees peak sales of Dupixent in COPD treatment at $4 billion in the U.S. and $6.5 billion worldwide.
Regeneron Stock: Expected Revenue Boost
Regeneron stock analysts expect that to help bolster $4.27 billion in collaboration revenue, up about 12%.
For Verona, the potential approval in COPD treatment could help sales skyrocket. In 2024, analysts following the biotech stock expect it to generate $8.5 million in sales. By 2029, that number could surge to $2.23 billion.
GlobalData's Nawab is particularly bullish on AstraZeneca's Fasenra. It could eventually rival Dupixent, which is also focusing on patients with high eosinophils.
Wall Street expects Fasenra, which is already an approved asthma treatment, to bring in $2.23 billion in sales by 2029. Similarly, Tezspire sales are expected to nearly triple from $857 million this year to $2.43 billion in five years' time.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
