Regeneron (REGN) Downgraded at RBC Capital, Price Target Cut Sharply

On May 30, RBC Capital analyst Brian Abrahams downgraded Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) to Sector Perform from Outperform, and sharply reduced the stock’s price target to $662 from $943. Abrahams’ action follows disappointing clinical results for the company’s key pipeline asset, itepekimab. In his view, the outcome significantly narrows the drug’s potential and limits its future commercial opportunities.

Itepekimab is a drug developed by Regeneron using its proprietary VelocImmune technology. It is a lab-engineered antibody designed to block a protein in the body called IL-33, which plays a role in inflammation, particularly in patients with COPD (chronic obstructive pulmonary disease). Regeneron and Sanofi (NASDAQ:SNY) are collaborating on the global development of this drug.

Scientist in a lab working on a research project, focusing on biotechnology and healthcare advancements.

Despite the setback, Abrahams remains optimistic about Regeneron’s R&D efforts. He sees strong long-term potential in the company’s ability to innovate and believes the stock might be undervalued. Therefore, a short-term recovery from its current level wouldn’t be surprising.

That said, the analyst argues that material outperformance in the near term is unlikely unless another pipeline candidate emerges with multi-billion-dollar potential or the company witnesses substantial success at another external business development initiative, both of which the analyst believes are doubtful at this time. Given the lack of near-term catalysts, the analyst has turned cautious on Regeneron.

Regeneron is a biotechnology company that invents, develops, and commercializes medicines for people with serious diseases, including allergic and inflammatory diseases, cancer, cardiovascular and metabolic diseases, neurological diseases, hematologic conditions, and infectious diseases.

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