Regeneron Pharmaceuticals has recently been granted approval by the Food and Drug Administration (FDA) to offer higher doses of their drug, Eylea HD, for the treatment of vision loss. This development has sparked optimism on Wall Street, with many anticipating a potential increase in the biotech company's stock in the short term.
Previously, Eylea HD was available in two-milligram doses. However, the FDA's approval now allows Regeneron to introduce an eight-milligram injection. In June, the higher dose was initially declined by the FDA due to a thorough review of findings from an inspection of a third-party filler or manufacturer.
With a list price of $2,625 per single-use vial, Eylea accounted for more than half of Regeneron's sales in 2022.
As a response to this positive development, Regeneron's stock price rose by 1% to reach $821.26 during premarket trading on Monday.
Hartaj Singh from Oppenheimer has raised his target for Regeneron's stock price to $1050, suggesting a 29% gain from Friday's closing price. Singh rates the stock at Outperform and believes that Eylea could significantly contribute to the company's sales growth in the mid to high single digits in 2024 and beyond. This positive outlook has a favorable impact on Singh's valuation of the company.
On the other hand, Brian Abrahams from RBC Capital Markets, who rates the stock at Sector Perform, has also increased his target price for Regeneron to $830 from $820 over the weekend. Abrahams asserts that while the stock is approaching fair value, this news eliminates a significant concern that was weighing on the stock.
At present, the stock is valued at 18.9 times its per-share earnings estimated for the next 12 months. This is higher than its five-year average valuation of 15.3 times.
In conclusion, Regeneron Pharmaceuticals' approval to offer higher doses of Eylea HD represents a significant milestone in the treatment of vision loss. Wall Street analysts have responded positively, with heightened expectations for the company's future sales growth.