Since the market sold off in October, shares of Regeneron Pharmaceuticals (NASDAQ: REGN) fell sharply below the $400 level. This is despite signs that the company will benefit from strong quarterly sales.
Sanofi (NYSE:SNY) reported quarterly earnings that suggest Dupixent sales in Q3 will give Regeneron stock a lift. Sanofi reported sales of EUR 225M.
Even though Dupixent sales rely on prescriptions for treating atopic dermatitis, the expanded indication for asthma will boost the TAM (total addressable market) and ultimately the revenue potential of the drug.
Investors could be hesitant in holding REGN stock until the company raises its Rx forecast for the drug. The drug is very expensive. EYELEA is also an expensive treatment, so if the U.S. government renews its scrutiny over drug prices, Regeneron could face weaker revenue growth.
Regeneron trades at a P/E in the 20x range. It typically trades at above that level. The company has negligible debt. The solid pipeline of drugs also adds to the revenue growth potential. While most investors ignore this, value investors may want to re-evaluate the stock at current levels.
Regeneron reports earnings on November 6 before market open.
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