Barclays states that Regeneron Pharmaceuticals' profits from Dupixent are underestimated

Investing.com - Barclays has upgraded Regeneron Pharmaceuticals to a Buy rating with a target price of $923, stating that the company’s stock is undervalued given the near- and mid-term profit growth from Dupixent and the potential of its drug pipeline.

The broker said investors are underestimating how additional indications for Dupixent can sustain the drug’s growth, which has maintained double-digit annual sales growth nearly nine years after its initial approval.

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Barclays describes Dupixent as “a pipeline within a product,” driven by a continuous stream of new indications and expansion of existing ones.

The company expects new uses, including chronic obstructive pulmonary disease (COPD) and chronic spontaneous urticaria, to support next-phase growth even as competition intensifies. It also believes intellectual property protections could extend into the mid-2030s.

Barclays said concerns about the eye disease business around Eylea have pressured the stock, but the firm believes investors are overemphasizing the risk of biosimilar erosion.

The high-dose version of the drug, Eylea HD, is expected to account for about half of Eylea’s total sales by the end of 2025. The broker expects the shift to higher-dose formulations to continue even as standard-dose products face more competition starting in 2026.

Beyond ophthalmology, Barclays emphasizes that Regeneron’s pipeline in immunology and oncology is a key growth driver.

The firm notes that Lynzyfic has potential in multiple myeloma, and Barclays states that as treatment shifts toward long-term disease management, this market could exceed $10 billion. The company expects the drug to gain market share through higher efficacy and simpler dosing regimens.

More clinical catalysts may emerge over the next two years, including late-stage data for the combination of fianlimab and Libtayo in metastatic melanoma and other cancer indications.

Barclays also mentions projects targeting the complement C5 pathway and XI factors as potential long-term growth areas.

The broker states that with approximately $20 billion in cash, over $5 billion in annual cash flow, and a broad clinical pipeline, the company’s valuation does not reflect its growth prospects.

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