Regeneron: Is It the Perfect Biotech Stock for Value and Growth?

Key Points

• Regeneron co-developed its blockbuster drug Dupixent with Sanofi, which generated $14.15 billion in global sales in 2024, up 22% YoY.
• Additional indications for Dupixent include COPD, which could boost its total address market (TAM) of patients by an additional 30%.
• Libtayo is its latest blockbuster, with 40% YoY worldwide sales in 2024, cracking the $1 billion "blockbuster" mark.

Regeneron Pharmaceuticals Inc. NASDAQ: REGN stock has gone relatively unnoticed from major headlines in 2024 as GLP-1 makers like Novo Nordisk A/S NYSE: NVO and Eli Lilly & Co. NYSE: LLY grabbed the spotlight. Its stock closed down 18.9% for 2024. However, the medical sector giant recently bounced off three-year lows at $642 in reaction to its fourth quarter of 2024 earnings results.

The company also announced its first-ever dividend and authorized another $3 billion in its stock buyback program. Shares are down 42% from their August 2024 high of $1,211.20. Investors seeking value (deep pullbacks) and growth (upside potential) may want to take a closer look at Regeneron fundamentally and technically.

Dupixent Generated $14 Billion in 2024, But Not All for Regeneron

As with any big pharmaceutical company, it’s all about the current and future blockbuster drugs, which are treatments generating over $1 billion in sales. Regeneron’s top seller is Dupixent, a treatment for symptoms of chronic inflammatory conditions caused by Type 2 immune responses. Dupixent is commonly used for moderate-to-severe eczema, chronic sinusitis with nasal polyps and asthma.

It works by blocking certain proteins in the immune system that trigger inflammation and helps to reduce symptoms, including itching, sinus congestion and breathing difficulties. While Regeneron doesn’t make vaccines specifically, its monoclonal antibody therapy provides a "passive vaccine" effect, temporarily protecting against infections.

Dupixent Could Gain 30% More U.S. Patients with Expansion Approval from the FDA

Dupixent sales grew 22% YoY in 2024 to $14.15 billion. It was developed with Sanofi NASDAQ: SNY, who actually claims the revenues and splits profits with Regeneron. Regeneron posts their portion of Dupixent as collaboration revenue. Regeneron and Sanofi are seeking to expand the use of Dupixent to include more conditions, including chronic obstructive pulmonary disease (COPD), chronic spontaneous Urticaria (CSU) and bullous pemphigoid. Dupixent is used by one million patients globally, and COPD alone could add another 300,000 patients from the United States.

Eylea Decelerating While Libtayo Is a Future Blockbuster

Regeneron’s treatment for age-related macular degeneration (AMD) Eylea and Eylea HD generated $5.9 billion in 2024 in the United States. Eylea sales rose just 1% YoY in 2024 as this blockbuster’s growth is slowing. Regeneron submitted regulatory applications to the FDA for Eylea HD pre-filled syringe and had positive phase 3 clinical trial results in retinal vein occlusion (RVO). Libtayo's year 2024 sales rose 40% YoY to $1.22 billion, which is its latest blockbuster just starting to accelerate. Libtayo received positive phase 3 trial results in high-risk adjuvant cutaneous squamous cell carcinoma (CSCC).

Q4 Results Help Put in the Bottom for Regeneron’s Stock

Regeneron reported Q4 2024 EPS of $12.07, beating consensus estimates by 71 cents. Revenues rose 10.3% YoY to $3.79 billion, beating $3.74 billion consensus analyst estimates. Non-GAAP net income rose 2% YoY to $1.39 billion. Collaboration revenue from Sanofi for 2024 rose to $3.924 billion, up from $3.127 billion. The Board of Directors initiated its first dividend of 88 cents. The Board also expanded its buyback program by an additional $3 billion, bringing the total to $4.5 billion.

The company guided 2025 non-GAAP gross margin on net product sales between 87% to 88%. Non-GAAP R&D between $5 billion and $5.2 billion, and capital expenditures between $850 million and $975 million.

Regeneron CEO Dr. Leonard Schleifer added, "In 2025, we will continue to focus on our four blockbuster medicines as we progress our approximately 40 investigational candidates covering dozens of disease states with expansive market potential."

REGN Stock Attempts a Cup Pattern

A cup and handle pattern consists of a rounded cup formation followed by a shallow handle pullback. The cup forms when a stock declines from a peak to a swing low, rounds out, and rallies back to retest the previous high. A brief pullback from that high creates the handle, and a breakout is signaled when the stock finally exceeds this level on a subsequent move.

REGN formed its daily cup lip line on the swing high at $800.99 on Dec 9, 2024, before sinking to a three-year swing low at the $641.66 Fib. REGN coiled off the lows on a solid Q4 earnings report as it attempts to complete a rounding bottom above the daily anchored VWAP at $691.03. The daily RSI is rising slowly through the 55-band. Fibonacci (Fib) pullback support levels of interest are $666.25, $641.66, $614.28 and $575.49.

REGN’s average consensus price target is 38.95% higher at $973.13, and its highest analyst price target sits at $1,300. It has 18 analysts' Buy ratings, six Holds, and one Sell rating. The stock has a 2% short interest.

Bullish investors can consider using cash-secured puts at the Fib pullback support levels to buy the dip. If assigned the shares, then writing covered calls at upside Fib levels executes a wheel strategy for income in addition to the newly initiated 0.13% dividend.