Regeneron Pharmaceuticals: My Highest Conviction Pharma Pick For 2025

Regeneron Pharmaceuticals (REGN) shares have declined 22.5% over the past six months, reflecting Wall Street concerns regarding increased competition for its Eylea franchise. Despite these headwinds, the company's outlook is reportedly strengthened by Dupixent's anticipated role as a key revenue driver, growth in its oncology pipeline including Lynozyfic's recent FDA approval and Libtayo's strong Q1 2025 sales of $285 million. Additionally, REGN repurchased $1.05 billion in shares during Q1, a 64.7% year-over-year increase, prompting an analyst to upgrade the stock to 'strong buy'.

Analysis

Regeneron Pharmaceuticals (REGN) has experienced significant stock price pressure, declining 22.5% over the last six months due to market concerns about mounting competition for its key Eylea franchise. Despite these headwinds and setbacks related to itepekimab, the company's strategic position appears to be strengthening through other avenues. The primary offset is the performance of Dupixent, positioned as a core "cash cow" with profits anticipated to accelerate sharply in 2027. Furthermore, Regeneron is diversifying its revenue base through its oncology division, highlighted by the recent FDA approval of Lynozyfic on July 2 and strong Q1 2025 sales of $285 million for Libtayo. Management has demonstrated confidence in the company's valuation by executing an aggressive share repurchase program, buying back $1.05 billion in shares during the first quarter, which represents a 64.7% year-over-year increase and is noted as a move to counter short-seller pressure.

Key Decisions for Investors

• Investors should weigh the near-term competitive pressures on the Eylea franchise against the long-term growth catalysts from the Dupixent and oncology pipelines.
• The aggressive $1.05 billion share buyback in Q1 signals strong management confidence and could provide support for the stock price against continued short-seller pressure.
• Monitor the commercial uptake of the newly FDA-approved drug Lynozyfic and the continued sales growth of Dupixent and Libtayo, as these are the core pillars of the bullish thesis intended to offset Eylea-related weakness.
• Note that the 'strong buy' rating is provided by an analyst with a disclosed long position, which should be considered when assessing the highly bullish outlook presented in the article.