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UPDATE 2-Regeneron revenue tops estimates, Co backs Eylea sales forecast
May 4, 2017 / 11:00 AM / in 7 months

UPDATE 2-Regeneron revenue tops estimates, Co backs Eylea sales forecast

* Sales beat driven by collaboration, other rev-analyst

* Eylea US sales growth of 9 pct miss est. of 10 pct

* Q1 adj. EPS misses estimates due to higher taxes (Adds details, analyst comment)

May 4 (Reuters) - Regeneron Pharmaceuticals Inc’s revenue growth edged past analysts’ estimates in the first quarter and the biotechnology company stood by its full-year sales forecast for its flagship drug Eylea.

Eylea, used to treat macular degeneration and other eye disorders, has powered much of the company’s explosive growth since late 2011, but the drug’s U.S. sales have slowed in recent quarters, largely due to competition.

U.S. sales of Eylea rose 9 percent to $854 million in the first quarter – in line with Regeneron’s expectations of single-digit growth this year, a forecast it reiterated on Thursday.

But the increase was less than the roughly 10 percent growth Wall Street was expecting, according to Barclays.

The drug, which accounted for 65 percent of Regeneron’s total revenue, had enjoyed sales growth in the double-digit percentage range unto the fourth quarter.

Regeneron’s total revenue rose nearly 10 percent to $1.32 billion, just beating analysts average estimate of $1.30 billion, according to Thomson Reuters I/B/E/S.

The beat was driven by collaboration revenue from partners Sanofi SA and Bayer as well as other revenue, Leerink analyst Geoffrey Porges said in a note.

“The solid Eylea result and intact revenue guidance should be well received by the market,” Porges said.

The U.S. biotechnology company’s net income jumped 37.2 percent to $248.9 million in the first quarter.

However, Regeneron’s adjusted profit of $2.92 per share missed analysts’ estimate of $3.06 due to a bigger-than-expected tax bill.

The Tarrytown, New York-based company’s taxes were 27 percent higher than the consensus estimate, Porges said.

Regeneron’s income tax expense rose to $183 million in the quarter from $149 million a year earlier.

Its tax rate dropped to 42.4 percent from 45 percent, and the company reaffirmed that it expects a tax rate of 32-38 percent for 2017.

To reduce its dependence on Eylea, Regeneron is banking on two key treatments: dupilumab to treat eczema and sarilumab to treat rheumatoid arthritis.

Regeneron on Thursday reported positive analysis of data from a mid-stage study testing dupilumab on patients with eosinophilic esophagitis, which can be a manifestation of food allergies.

Dupilumab was approved in late March to treat eczema and analysts expect the drug to generate peak annual sales of more than $4 billion. (Reporting by Divya Grover in Bengaluru; Editing by Savio D‘Souza)

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