UBS: Resumes coverage of Regeneron Pharmaceuticals (REGN.US) with a "Buy" rating; potential of blockbuster drug Dupixent underestimated

Jitong Finance APP has learned that UBS has resumed coverage of Regeneron Pharmaceuticals (REGN.US), assigning a "Buy" rating with a target price of $978, which is about 30% higher than the latest closing price. The bank previously rated the stock as "Neutral".

UBS analyst Joon Lee stated that the market has not fully reflected two aspects of value: first, Regeneron's potential in developing follow-up products to its Dupixent (dupilumab); second, the prospect of an extended exclusivity period for the drug. Dupixent is a blockbuster medication co-developed by Regeneron and Sanofi (SNY.US).

Lee pointed out that next-generation Dupixent candidate drugs "may fill the gap created when patent exclusivity expires." The company may be able to extend exclusivity beyond 2031.

Among the four next-generation Dupixent candidate drugs currently under development, one may reveal data early next year and subsequently begin phase 3 trials in the second half of 2027. Lee said that the other three next-generation candidates are planned to start phase 1/2 clinical trials in early 2027, and phase 3 studies between 2027 and 2028. Lee also mentioned that patent reviews show these candidate drugs have differentiated features. For example, they can achieve "optimized target binding" in a pH-dependent manner, thereby improving target clearance and drug durability.

He expects Dupixent’s revenue to reach $16 billion by 2035, while market consensus forecasts $13 billion.

Lee added: “Dupixent’s multi-layered intellectual property protection system and Sanofi’s comments about IP protection until 2046 are certainly worth considering from a risk-adjusted perspective. Litigation involves more than 50 patents, is time-consuming and labor-intensive, and the risks associated with product launch are high, meaning competitors may bear liability for damages... These are all key factors to consider.”