There’s no doubt Regeneron is at a critical juncture of its business, what with a new serious competitor to its top earner Eylea and an expected restructuring of its collaboration with Sanofi. But to hear management tell it, Regeneron’s in good shape.
Despite Novartis’ Beovu launch, eye drug Eylea recorded its best performance in terms of volume and sales in the fourth quarter, Regeneron commercial chief Marion McCourt told investors during a conference call on Thursday. Its U.S. sales jumped 13% year over year to $1.22 billion during the three months, slightly ahead of industry watchers’ expectations of $1.20 billion.
“Our renewed strategy and incremental 2019 investments enhanced wet AMD leadership and drove further penetration in diabetic eye disease, which has Eylea growing faster than the market across all indications,” McCourt said.
Eylea’s growth has a May 2019 FDA approval in diabetic retinopathy to thank. In fact, in the past few quarters, the drug’s growth rate in diabetic eye disease—which also includes diabetic macular edema—has exceeded that in age-related macular degeneration. As a result, AMD now constitutes less than 60% of total U.S. Eylea sales, according to McCourt.
Regeneron is aiming to penetrate that diabetic market further, McCourt added, by “investing in targeted initiatives with physicians and consumers to increase diagnosis and treatment rate, as well as applying technology to support screening and diagnosis.”
Its clinical profile, multiple indications, established safety profile, as well as a prefilled syringe that was just rolled out in mid-December could position Eylea well against competitors, McCourt said. “As to competition historically and future competition, it becomes a matter of physicians determining what is risk-benefit of using a different profile,” she said, and so far, feedback from physicians has been “very positive.”
The comments were made as Regeneron defends its leading anti-VEGF position against Beovu, which won an FDA green light to enter wet AMD in October. Apparently, the fight has just begun and not all are as bullish on Eylea as Regeneron.
Beovu generated sales of $35 million in Q4. According to Novartis Pharmaceuticals chief Marie-France Tschudin on its own earnings call last week, the company is “very pleased” with the drug’s early performance, as 84% of retina specialists have got Beovu in their fridge. “We get outstanding feedback from physicians regarding the efficacy and regarding the drying properties of Beovu,” she said.
That statement can be backed up by a recent discussion Evercore ISI analyst Josh Schimmer’s team had with a key opinion leader. That physician, which treats about 80 patients per day previously found only small differences between Eylea and Roche’s Lucentis, but his experience with Beovu “leads him to see it as a dramatic improvement over the other two branded drugs,” Schimmer wrote in a December note to clients.
The favorable opinion toward Beovu is unanimous among physicians, according to that expert cited by Evercore ISI. As a result, he predicts about half of the AMD market will belong to Beovu in two years.
What’s more, in January Beovu has received a permanent J-code from the Centers for Medicare and Medicaid Services, which can help with its timely reimbursement.
More competition to Eylea isn’t the only new challenge Regeneron needs to face in 2020. In early December, the company and its long-time partner Sanofi announced a restructuring of their collaboration. Sanofi is aiming to return U.S. rights to PCSK9 cholesterol drug Praluent to instead focus just on the ex-U.S. market.
Praluent’s experienced a slow launch amid a cut-throat rivalry against Amgen’s Repatha. In Q4, Praluent U.S. sales dropped about 27% to $43 million, mainly due to significantly higher rebates. And the decision also came as seasoned cardiovascular disease marketer Novartis nears a potential blockbuster launch of inclisiran, a less frequently dosed PCSK9-targeting therapy.
Because the two companies have yet to finalize the details of their revised agreement, which also includes rheumatoid arthritis med Kevzara, Regeneron said it will provide further guidance for full-year 2020 later, before the end of March.
In total, Regeneron’s Q4 revenues of $2.17 billion came above analysts’ previous consensus, mainly thanks to Eylea and Dupixent.