Skip to Content
Stock Analyst Update

Regeneron Authorized to Use Antibody Cocktail

We're maintaining our $500 fair value estimate for the narrow-moat drug manufacturer.

Regeneron's (REGN) antibody cocktail REGN-COV2 (casirivimab and imdevimab) received emergency use authorization from the U.S. Food and Drug Administration on Nov. 21, targeted at COVID-19 patients who are not yet hospitalized but are considered high risk. Regeneron gave the first glimpse of data on REGN-COV2 in September with more details in October, showing a promising ability to lower viral loads and reduce rates of hospitalization. Based on reduced potential for the cocktail to serve the sickest hospitalized patients, a lower assumed price, as well as continued progress with several vaccine programs, we've reduced our estimates for sales of the cocktail, and we include $1.7 billion in 2021 sales for REGN-COV2 in our Regeneron model ($3.4 billion in potential global sales in 2021, shared with Roche).

However, this did not have a significant impact on our $500 fair value estimate for Regeneron. Overall, we think demand will exceed supply over the next few months, but that long-term demand (late 2021 and into 2022) will depend on REGN-COV2's success in continuing trials in hospitalized patients as well as in prevention studies, as well as data from competing antibody programs and other treatment regimens. The success of REGN-COV2 supports the continued promise of Regeneron's antibody technology, which underpins a narrow moat and positive moat trend rating.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

Karen Andersen does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.