After months in a downtrend and down 43% from yearly highs, shares of Regeneron Pharmaceuticals (NASDAQ: REGN) are starting to fight for support on the stock markets at the $300 level. At the $308 close last week, REGN stock has a P/E of 20 times, no debt, and EPS growth of 71%. The 1.8 times PEG hardly does any justice for this biotechnology firm.
Biotech investors found their composure again in the last month as the Nasdaq Biotech ETF (IBB) rebounded 6 percent on the month. Generics were favorites again – see Teva Pharmaceuticals (NYSE: TEVA) or Valeant Pharma (NYSE: VRX). Value investors could opt for Sanofi (NYSE: SNY), Regeneron’s Atopic Dermatitis drug partner. And while Dupixent sales grow steadily, the companies are studying the drug’s efficacy for the disease in adolescents.
Regeneron must capture more market share in the AD market. Pfizer (NYSE: PFE) and AbbVie (NYSE: ABBV) are all working on drugs to treat Eczema. Celgene (NASDAQ: CELG), through its Otezla drug, and Valeant are both vying for market share for drugs treating psoriasis.
The skin disease market is worth billions. The market currently values each company as taking a portion of market share but Regeneron is best positioned in taking the most of it. Next, it needs to work with insurance companies to make its drugs more affordable for patients. That would speed up uptake of its treatments.
