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A Stock That Defies Conventions & Corona - Regeneron Pharma

Bucking the broader market downturn, this stock rose 5.5% or $22.23 yesterday, to close trade at $425.38, not far from its 52-week high of $442. Significant pipeline advancements continue to relentlessly bolster the stock, while near-term growth drivers imply that it may not be too late to join the party. The stock in focus is Regeneron Pharmaceuticals, Inc. (REGN).

Eylea is Regeneron's blockbuster eye drug, which fetched U.S. net product sales of $1.22 billion in Q4 vs. total company revenues of $2.17 billion. That is more than 50% of total Q4 revenues. Eylea has received regulatory approval to treat all stages of diabetic retinopathy - reducing the risk of blindness. Regeneron is pushing the drug for use in preventive settings.

In connection with this effort, recently Regeneron touted new two-year data from a clinical trial to show that untreated moderately severe and severe non-proliferative diabetic retinopathy (NPDR) can lead to vision-threatening events. The company said that in two years, 58% of untreated patients developed vision-threatening events, and Eylea reduced this risk by at least 75%. The two-year results also showed a greater benefit for Eylea patients treated at regular intervals compared to patients who received Eylea treatment less frequently. In December 2019, the company launched the Eylea pre-filled syringe in the U.S.

Eylea faces competition from Novartis' eye drug Beovu. However, new concerns have surfaced over the safety of Beovu. Reports say that Beovu caused occlusive retinal vasculitis, a condition that could lead to vision loss. This may reinforce the support for Eylea.

Earlier this month, Regeneron said it expanded an agreement with the U.S. Department of Health and Human Services to develop a treatment for coronavirus or 2019-nCoV. The company said it will use its proprietary, rapid response technology - VelociSuite - to develop a promising antibody to combat the outbreak.

Regeneron's VelociSuite technologies - include the VelocImmune platform that uses a unique genetically-engineered mouse with a humanized immune system that can be challenged with all or parts of a virus of interest, to facilitate swift identification, preclinical validation and development of promising antibody candidates.

In the press release, the company stated that the life-saving results seen with its investigational Ebola therapy in 2019 underscore the potential impact of its rapid response platform for addressing emerging outbreaks.

Last year, the experimental Ebola drug developed by Regeneron was deemed superior to standard-of-care, as it reduced mortality rate to 29% vs. the normal mortality rate of around 75% for untreated Ebola. The standard-of-care reduced this mortality rate to 49%, but Regeneron's Ebola therapy beat these numbers and saved more lives.

Regeneron stock has rallied nicely from a 52-week low of $271.37 reached in late September last year to the current price of $425.38, marking 50% plus gain. At the current price levels, the stock trades at 15.4X forward estimates.

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