Forget Eylea: Regeneron's Real Value May Be Hiding in Its Dupixent Profit Share

Regeneron Pharmaceuticals has been underperforming other equities over the past two years, largely due to a decline in sales of its eye medication Eylea. Eylea faces stiff competition from biosimilars, and despite a newer version showing promise, overall sales are declining. However, Regeneron's most valuable asset, Dupixent, developed in collaboration with Sanofi, is performing exceptionally well.

The drug, approved for treating COPD, asthma, and more, has seen impressive growth, with global sales hitting $6 billion in the second quarter. Regeneron's revenue from Dupixent and its share with Sanofi grew 51% year over year to $2.2 billion. Despite Eylea's challenges, Regeneron's Q2 revenue grew by 17% year over year to $4.3 billion, with its share from the collaboration with Sanofi increasing by 51% to $2.2 billion.

Dupixent's revenue is expected to hit $27.8 billion by 2030, making it a significant growth driver. However, biosimilars could pose a threat in the early 2030s. Nonetheless, Regeneron is preparing defenses, such as developing new formulations and collaborating on alternative medicines, along with a robust pipeline of candidates like olatorepatide, a promising weight-loss medication.