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Can Regeneron Continue Its Sales Growth Momentum in 2016?

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Apr. 28 2016, Updated 10:07 a.m. ET

Annual sales expectations in 2016 and 2017

In fiscal 2015, Regeneron Pharmaceuticals (REGN) experienced a robust annual sales growth of 45.5%. Aside from fiscal 2011, the company has, in fact, seen continuous robustness in sales growth. But with this increased revenue base, the company is preparing to experience comparatively lower sales growth. Wall Street analysts are expecting the company to report annual sales growth of ~23.9% and ~18.3% in fiscal 2016 and 2017, respectively.

Can Regeneron Continue Its Sales Growth Momentum in 2016?

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What Regeneron is doing to boost Eylea

Eylea is a critical drug to the company. It contributed ~68% to total revenues in fiscal 2015. As we discussed earlier in this series, there has been continuous label expansion for the drug. But comparatively lower sales growth momentum for Eylea in coming years is a major concern for Regeneron.

To maintain a leadership position in the retinal space, Regeneron is running a combination of development programs for the drug. Specifically, Eylea with PDGF (platelet-derived growth factor) is currently in Phase 2 and has received fast-track designation for wet AMD (neovascular age-related macular degeneration) from the US Food and Drug Administration.

Phase 2 study of Eylea

Regeneron plans to initiate a Phase 2 study of Eylea with nesvacumab, an ANG2 (antibody to angiopoietin-2) for wet AMD and DME (Diabetic Macular Edema) in the first half of 2016.

To get exposure to Regeneron Pharmaceuticals while controlling excessive company-specific risks, investors can choose to invest in the iShares Russell 1000 Growth ETF (IWF). Regeneron accounts for 0.3% of IWF’s total holdings. IWF also has ~4.5% in the biotechnology sector, ~1.3% in Gilead Sciences (GILD), and ~1.2% in Amgen (AMGN). It has ~1.1% in Bristol-Myers Squibb (BMY).

Continue to the next part for a closer analysis of Eylea’s sales prospects going forward.

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