Regeneron Pharmaceuticals Inc (REGN): Is This Eye Drug Worth The Hype?

Regeneron, not counting proceeds to Bayer, is expected to achieve revenue of $1.3 billion this year. The drug is well on its way to blockbuster status and has accomplished this feat with the one application. Therefore, its 10% rise last Thursday shouldn’t serve as a surprise; as the data shows that Eylea works on other applications as well.

Regeneron Pharmaceuticals Inc (NASDAQ:REGN) produced positive top-line data for the treatment of myopic choroidal neovascularization (mCNV) in a Phase 3 trial. mCNV is a disease where abnormal blood vessels grow into the retina in people who are severely short-sighted. This disease is quite different from age-related macular degeneration, showing the potential diversification of the product.

The addition of mCNV won’t create billions in additional sales, but analysts predict that it could boost sales another $200 million in the U.S. alone. Last year, Roche’s Lucentis saw sales of $1.5 billion and it treats wet age related macular degeneration, diabetic macular edema, and macular edema following retinal vein occlusion. Basically, it treats a variety of diseases of the eye, and its revenue is expected to drop by about half in the next year. This cut is because of Regeneron, and the fact that Eylea is well on its way to offering a wide range of treatments that are superior to existing treatments.

Conclusion

Hopefully you see the Eylea’s upside and why Regeneron Pharmaceuticals Inc (NASDAQ:REGN) has been awarded such a large valuation. With just one indication sales are already projected to be over $1 billion in 2013. In addition to mCNV, the company is also testing Eylea in three other trials. Combined, analysts expect Eylea to easily top $4 billion in annual sales.

While my goal was to discuss Eylea and the progress it has seen in the market, I must also mention Regeneron’s other projects: Zaltrap for colorectal cancer, and a bacterial drug Aralyst. In its pipeline, the company has a cholesterol drug called Alirocumab currently in Phase III trials. Much like Eylea, it is superior to its competition, and has projected sales north of $5 billion.

The bottom line is this is a wonderful company with cutting-edge products that will see growth for many years to come. In many ways, we are seeing the second coming of Gilead Sciences, although possibly better, and I suggest you take a long hard look.

The article Is This Eye Drug Worth The Hype? originally appeared on Fool.com.

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