Regeneron Authorized to Use Antibody Cocktail

Regeneron's REGN antibody cocktail REGN-COV2 (casirivimab and imdevimab) received emergency use authorization from the U.S. Food and Drug Administration on Nov. 21, targeted at COVID-19 patients who are not yet hospitalized but are considered high risk. Regeneron gave the first glimpse of data on REGN-COV2 in September with more details in October, showing a promising ability to lower viral loads and reduce rates of hospitalization. Based on reduced potential for the cocktail to serve the sickest hospitalized patients, a lower assumed price, as well as continued progress with several vaccine programs, we've reduced our estimates for sales of the cocktail, and we include $1.7 billion in 2021 sales for REGN-COV2 in our Regeneron model ($3.4 billion in potential global sales in 2021, shared with Roche).

However, this did not have a significant impact on our $500 fair value estimate for Regeneron. Overall, we think demand will exceed supply over the next few months, but that long-term demand (late 2021 and into 2022) will depend on REGN-COV2's success in continuing trials in hospitalized patients as well as in prevention studies, as well as data from competing antibody programs and other treatment regimens. The success of REGN-COV2 supports the continued promise of Regeneron's antibody technology, which underpins a narrow moat and positive moat trend rating.

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