Regeneron - reflections following Q3 2025
Roundtables; boldly going; eyeing up new opportunities; early thoughts about 2026 and more...
Friends of NFTBC
Regeneron gave us their third quarter earnings yesterday - I know many of you are interested in the company and will have seen these already. As a long-time Regeneron watcher my goal here is to try to show you the things that stand out to me that might not otherwise be obvious - and there were a few of those this quarter.
One of Regeneron’s many eccentricities is to not provide quarterly guidance - leaving sell-side analysts to come up with their own. And for the second quarter in a row, analysts were much too pessimistic. As I highlighted in the deep dive, the estimates are almost always too low. I suspect estimates for 2026 are too low as well - possibly by an eyebrow-raisingly wide margin.
The thing that investors reliably seem to overlook about Regeneron is the high clinical success rate, which is more than 3X the industry average. Yesterday they confirmed they’ll invest around $6bn in R&D next year to support their late stage programs. To get comparable output I think you could reasonably say most major biopharmas would have to invest at least twice that, inclusive of business development - and pharmas with those sorts of resources tend to have market caps 2-3X higher, or more. And while I’m certainly not arguing that Regeneron shares should trade in that bracket today, I do think this is the direction of travel as the late stage pipeline gradually converts to commercial opportunity in the coming years and starts trickling down into analysts’ spreadsheets.
With that, let’s get going. You can find all the Q2 materials here.
[NFTBC does not give advice - please do your own research. I currently own REGN shares]
