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Why Did Regeneron Pharmaceuticals’ Stock Price Rise Last Week?

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Regeneron’s stock performance

On March 28, 2018, Regeneron Pharmaceuticals (REGN) was trading at $344.36, a ~9.8% rise from its 52-week low of $313.53. On March 26, Regeneron stock opened at $325.58 and closed at $330.71. 

On March 29, Regeneron stock closed at $344.36, which represented a ~7.2% rise from its share price in the week ended March 23, 2017.

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Reasons for the rise

On March 21, 2018, Regeneron Pharmaceuticals announced a collaboration agreement with Alnylam Pharmaceuticals (ALNY) for the identification of RNA interference therapeutics for the treatment of chronic liver disease NASH (non-alcoholic steatohepatitis) and other related diseases.

Regeneron will gain from Alnylam Pharmaceuticals’ RNA interference platform, which will help it develop compounds for targeting the HSD17B13 gene, which the company has researched regarding its capability to reduce the risk of chronic liver diseases. Alnylam Pharmaceuticals’ stock price was $119.10 on March 29.

Regeneron witnessed solid revenue growth of 29% in 4Q17. In 2017 and 4Q17, Regeneron Pharmaceuticals generated revenues of $4.9 billion and $1.6 billion, respectively, which reflected rises of ~29% and 21%, respectively, YoY (year-over-year).

In 2017 and 4Q17, Regeneron reported non-GAAP (generally accepted accounting principles) diluted EPS (earnings per share) of $16.32 and $5.23, respectively, compared to $11.32 and $3.04, respectively, in 2016 and 4Q16—rises of ~72% and ~44%, respectively, YoY.

On March 19, 2018, Regeneron announced that its Phase 3 PANORAMA trial had met its 24-week primary endpoint in evaluating the safety and efficacy of Eylea for the treatment of moderately severe to severe non-proliferative diabetic nephropathy. Regeneron plans to make regulatory submissions for Eylea’s label expansion, including for the treatment of diabetic nephropathy, in late 2018.

Eylea generates the highest revenues for Regeneron. The label expansion of the drug is expected to boost its sales potential.

Analysts’ recommendations and peers’ ratings

Of the 27 analysts tracking Regeneron in April 2018, ~41% have recommended some form of a “buy” rating on the stock. On April 2, Regeneron had a consensus 12-month target price of $416.91, which represented a ~21.1% ROI (return on investment) over the next 12 months.

Of the 20 analysts tracking bluebird bio (BLUE) in April 2018, ~60% have recommended some form of a “buy” rating on the stock. On April 2, bluebird had a consensus 12-month target price of $222.35, which represented a ~30.2% ROI over the next 12 months.

Of the 19 analysts tracking Sarepta Therapeutics (SRPT) in April 2018, ~89% have recommended some form of a “buy” rating on the stock. On April 2, Sarepta had a consensus 12-month target price of $88.47, which represented a ~5.3% ROI over the next 12 months.

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