The Worry Over Regeneron is Unnecessary
Regeneron hasn't regained its footing since a rival eye drug combo worked in a trial.
Regenron Pharmaceuticals (REGN) hasn’t been able to regain its footing since a rival eye drug combo worked in a trial. Ophthotech Corp. released data on Wednesday that its drug combined with Roche's Lucentis outperformed Regeneron's Eylea in a trial.
When the news broke on Wednesday, Regeneron’s stock fell 5.57% when the markets opened and closed the day down by 12.58%. Thursday wasn’t any better. The stock attempted a rally in the middle of the day, but lost steam and closed the day down 0.88%.
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Ophthotech’s Fovista would potentially compete with Eylea to treat age-related macular degeneration. A mid-stage study combining Fovista with Roche’s Lucentis showed that patients were able to read 10.6 letters compared to 6.5 letters for those taking Lucentis alone.
Eylea has only been on the market for seven months and while it is exceeding sales expectations, this perceived competition is hurting Regeneron's stock. When Eylea was approved by the FDA, Regeneron’s stock price was only at $54.96. On Thursday it closed at $110.89.
However, Ophthotech isn’t really a direct competitor since its drug can work together with Regeneron's. Eylea is more similar to Lucentis, which was combined with Fovista in the Phase IIb trial. It wouldn’t be out of the question to assume that Eylea might be part of a future Fovista trial.
In all actuality, since Ophthotech is a small start-up, it could possibly be acquired in the not-so-distant future. And, as TheMotleyFool.com points out, the two most obvious suitors would be Regeneron and Roche. So what is seen as a negative right now by investors, could work in the company’s favor.
Unless, of course, larger Roche snaps Ophthotech up.
The information contained in this article should not be construed as investment advice or as a solicitation to buy or sell any stock.
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