The FDA approved Pasatru, whose generic name is garetosmab, of Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) for adults with fibrodysplasia ossificans progressiva. FOP is an ultra-rare genetic disorder in which bone forms inside muscles, tendons, and ligaments, progressively restricting movement. In a 56-week Phase 3 trial involving 63 adults, the approved 3-milligram-per-kilogram dose reduced the number of new abnormal bone lesions by 94% compared with placebo. The decision completed an unusual clinical recovery. Regeneron paused an earlier study in 2020 after five patients died during its open-label portion, when all participants were receiving active treatment. The published analysis later considered a relationship to treatment unlikely, although causality could not be ruled out. For Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), Pasatru is a regulatory and scientific victory whose earnings potential is constrained by an exceptionally small market.
The company’s existing scale makes that limitation difficult to ignore. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) generated second-quarter revenue of $4.29 billion, up 17%, while company-defined non-GAAP diluted EPS reached $14.29. Global Dupixent sales, recorded by partner Sanofi, increased 38% to approximately $6 billion, and U.S. Eylea HD sales rose 52% to $596 million. Against those franchises, even a successful Pasatru launch would have limited influence on consolidated results.
BULL CASE: A TROUBLED PROGRAM BECOMES AN APPROVED MEDICINE
The approval demonstrates that Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) can recover a program after a major clinical setback. Following the 2020 dosing pause, the company worked with regulators to design a late-stage study that produced a statistically significant reduction in new bone lesions. Pasatru also validates research into Activin A, which activates the mutant ACVR1/ALK2 receptor and triggers abnormal bone formation in FOP.
That platform value may matter more than initial sales. Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) plans to begin a pediatric trial later in 2026, which could eventually expand the eligible population. The regulatory recovery may also strengthen confidence in the company’s ability to advance other rare-disease programs from internally discovered biology.
BEAR CASE: THE COMMERCIAL CEILING IS LOW
Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) is entering an exceptionally small pharmaceutical market. Published prevalence estimates generally range from approximately one case per one million to one per two million people. Only approximately 800 to 900 known or confirmed cases have been identified globally, although additional patients may remain undiagnosed. Pasatru is currently approved only for adults, further narrowing its immediate market.
Competition is already established. Ipsen’s oral therapy Sohonos received FDA approval in 2023 for adults and certain pediatric patients. Pasatru’s earlier safety history will also remain important during commercialization. Incyte and Mirum are jointly advancing zilurgisertib, while Ashibio is separately developing andecaliximab.
INSIDER MONKEY’S HEDGE FUND DATA
Insider Monkey’s hedge fund database shows that 72 hedge funds held positions in Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) at the end of the first quarter of 2026, compared with 75 funds at the end of the preceding quarter. These figures reflect holdings as of March 31, 2026, and do not capture later trades or investors’ reactions to the Pasatru approval for Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN).
CONCLUSION
Pasatru is unlikely to move near-term earnings materially for Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN), given the small diagnosed population and existing competition. Its greater value lies in rescuing a troubled program, validating the Activin A science and demonstrating that a major setback can still lead to an approved medicine.
READ NEXT: ConocoPhillips (COP): Wall Street Sees More Upside Despite Leadership Shakeup and Here is Why Chevron (CVX) is a Favorite Among Hedge Funds
Disclosure: None. This article is originally published at Insider Monkey.
