Regeneron Pharmaceuticals, Inc. (REGN): A Bull Case Theory

We came across a bullish thesis on Regeneron Pharmaceuticals, Inc. (REGN) on Notes From The Beauty Contest’s Substack. In this article, we will summarize the bulls’ thesis on REGN. Regeneron Pharmaceuticals, Inc. (REGN)'s share was trading at $605.39 as of 29^th May. REGN’s trailing and forward P/E were 15.39 and 17.39 respectively according to Yahoo Finance.

Regeneron’s latest earnings report was notably weak, with a 3.7% revenue decline and a 14% EPS drop, surprising given the company’s history of exceeding market expectations.

The primary driver was a steep 26% year-over-year decline in the U.S. Eylea franchise, particularly a 39% drop in 2mg Eylea sales. This was partly due to a co-pay assistance funding gap, which forced many Medicare patients to switch to cheaper alternatives like compounded Avastin, impacting both Regeneron and rival Roche’s Vabysmo. Regeneron, having contributed over $400 million last year to charitable foundations supporting co-pay assistance, is now seeking to share this burden, proposing a matching donation program to encourage broader industry support.

Another setback was the FDA’s Complete Response Letter delaying approval of the Eylea-HD pre-filled syringe, a key product needed to compete with Vabysmo. The delay stemmed from third-party component issues rather than drug efficacy, and management believes resolution could be near.

Margins also contracted, with gross margin falling from 89% to 85% due to unspecified inventory write-offs, possibly related to older Eylea 2mg or even leftover REGEN-COV stock. However, the margin pressure appears more tied to one-offs and increased R&D spending than structural issues.

On a more positive note, Regeneron’s pipeline is broadening meaningfully. Itepekimab, an IL-33 antibody, shows promise as a major respiratory asset with pivotal COPD data upcoming and expanded trials underway. The growing RNAi pipeline, now at nine siRNAs through its Alnylam collaboration, signals Regeneron’s potential evolution beyond antibodies into a broader genetic medicine powerhouse.

Regeneron Pharmaceuticals, Inc. (REGN) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 66 hedge fund portfolios held REGN at the end of the first quarter which was 68 in the previous quarter. While we acknowledge the potential of LYFT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.