’ antibody cocktail to the list of product endorsements by President Donald Trump. The president’s surprising use of the experimental treatment for Covid-19 boosts chances that the REGN-COV2 product will get an emergency-use authorization from the U.S. Food and Drug Administration and rack up good sales, say stock analysts.
“It is hard to see that this emergency use is not a tacit endorsement by the Federal medical bureaucracy for [Regeneron’s (ticker: REGN)] medicine,” writes SVB Leerink analyst Geoffrey Porges in a Monday note. “We expect an [emergency-use authorization] for the treatment of Covid in a matter of days.”
Regeneron stock is up over 6% in Monday morning trading, to $600, as market indexes rose about 1%.
(LLY) is also testing an antibody treatment for Covid patients, but that experimental product wasn’t tapped by Trump’s doctors. Lilly stock was up 1%, in line with overall markets, at $146.40.
Regeneron disclosed the first bits of data from a Phase 1 trial of the antibody treatment on Sept. 29. Early indications were good. Still, Porges’ note expressed astonishment that the president’s doctors and the company would give Trump a treatment that’s been tested on barely a thousand people. But he and other analysts foresee good demand for the antibody treatment in the next few years—even after vaccines start to immunize large portions of the populace.
In another Monday note, Cantor Fitzgerald analyst Alethia Young raised her rating on Regeneron from Neutral to Overweight, saying that investors haven’t given due weight to the company’s Covid treatment. She thinks that sales of REGN-COV2 could hit $1.8 billion in 2021, then reach $2.4 billion and $1.7 billion in the next two years.
Young also sees a bright future for Regeneron’s Dupixent treatment for autoimmune disorders such as atopic dermatitis, an indication that she thinks will bring in sales of $6.3 billion in 2021, out of total 2021 revenue of $6.8 billion for the company. Such sales would produce earnings of $41 a share, Young predicts, excluding noncash expenses. Based on her forecast, she raised her target price for Regeneron stock to $690 from $624.
Porges also rates Regeneron at Outperform with a $629 price target. His Monday note wonders if Regeneron shared additional data on the antibodies’ safety and effectiveness with White House medical staff. In its public disclosures, the company said that the treatment appeared to make a difference in patients with the highest levels of Covid coronavirus or with the weakest natural immune response. Executives had expressed hope for an FDA emergency use authorization while the company continues clinical trials to validate the treatment’s safety and effectiveness.
Those initial disclosures from the treatment’s Phase 1 trial made Porges wonder if Trump’s use means that he had a high viral load or a weak immune response. Otherwise, reports of the treatment’s use on the president—in combination with the steroid dexamethasone and the
(GILD) antiviral remdesivir—shows a remarkable willingness to experiment on the U.S. president with a drug combination that’s not been tested in any reported study, says Porges.
Along with the president’s age and heavy weight, the signs that he had a meaningful case of Covid makes Porges believe that Trump’s recovery won’t be a walk in the park. The period from the middle to the end of this week will be critical for Trump, says the analyst, since that was the time frame of the antibodies’ effectiveness in the early trial.
Meanwhile, Porges expects a burst of demand for the Regeneron treatment from the many staffers, legislators and donors who attended events with the president.
Write to Bill Alpert at [email protected]