Regeneron Rises After Novartis's Eye-Drug Trials Disappoint

Updated on
  • Stock gains after dosing outcomes for Eylea rival disappoint
  • Eylea accounts for nearly 65% of Regeneron’s overall sales

Regeneron Pharmaceuticals Inc. had its biggest intraday gain in more a month after a rival’s drug that would compete with the company’s main sales driver fared less well than expected in a clinical trial.

The drugmaker’s shares climbed as much as 7 percent Tuesday, the biggest gain since May 4. They were up 5.4 percent to $496.99 at 2:47 p.m. in New York.

Eylea, a treatment for age-related macular degeneration, accounts for about 65 percent of Regeneron’s revenue, according to data compiled by Bloomberg. Novartis AG said on Tuesday that an Eylea competitor it is developing met the goals of two studies, but some analysts said the drug didn’t perform as well as they anticipated.

Investors had hoped that the Novartis drug, called RTH258, could be taken less frequently than Eylea, which is injected into a patient’s eyeball by their doctor every eight weeks after an initial dosing period.

In the two studies of Novartis’s medication 57 percent and 52 percent of trial patients received a dose every 12 weeks, the company said. Those numbers were expected to be over 60 percent, said Brian Skorney, an analyst at Robert W. Baird & Co. 

“We do not see the dosing outcome as strong enough to support a q12 week dosing label for RTH258, and therefore see no differentiation versus Eylea,” wrote Dane Leone, a managing director at BTIG, in a note to investors.

Novartis Trial

Novartis said that its drug offered an advantage over Eylea, calling the 12-week dosage is an important differentiator.

“Patients with age-related macular degeneration desperately want high-efficacy drugs that are able to help them maintain their vision, but they want it in a way that minimizes the number of trips they have to take to the physician and the number of injections they need,” Vas Narasimhan, global head of drug development at Novartis, said in an interview.

Novartis hopes to file for approval of its drug in 2018, which helps Regeneron, said Skorney.

“It creates a little more time for Regeneron before they’ll have to compete with them,” he said.

(Update with comment from Novartis in seventh paragraph.)
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