Regeneron: The Revenge of Eylea
And other Q2 musings
Friends of NFTBC
When I started writing about REGN last year, I talked about how Eylea had become “a distraction, a fixation even”. This is inevitably going to be the case in biotech when revenue is concentrated in any single molecule, but in the end, the fears proved to be unfounded - REGN has grown through the handoff from Eylea 2mg to Eylea HD. Eylea finally appears to be evolving from a hindrance into something potentially helpful once again.
One of the most entertaining quirks about Regeneron is the steadfast refusal to give revenue guidance of any kind.
I don’t like to make predictions about things that I don’t have any more information than you do. You can look at all the same information I have, and you can make your best guesses
- CEO Len Schleifer, speaking on the inSpired Podcast recently
He is, of course, being selectively candid here even if directionally fair. Ultimately there’s a tradeoff: REGN could perhaps provide considerably better forecasts than the analysts can. But it would come at the cost of having to play someone else’s game and entail a certain loss of control and freedom. To start operating that way might not suit the company philosophically either (also Goodhart’s Law etc). But the consequence of leaving analysts guessing is pretty wild volatility in revision trends. Here are consensus revenue trends over the last three years:
And let’s not forget that we’ve just about arrived at the two-year anniversary of REGN hitting its all-time high:
Yet despite a stock that remains down near 40% and a veritable rollercoaster ride in the forecasts (question: which one caused the other?), it looks as though REGN is on track to surpass future-year revenue forecasts made back at the highs - or the forecast for 2026 at the very least. When I wrote the deep dive last year, I suggested this advice:
if you err on the side of management’s ambitions rather than whatever sell-side analysts plug into their models, you’ll end up nearer to the real world. It sounds simplistic, but over the longer-term, the consensus numbers are always too low
It probably won’t have come as a surprise to NFTBC readers that revenue and EPS estimates for 2026 suddenly had to shoot upwards this week - I had been writing since last year that they seemed much too low (e.g. see here, here, here and here).
With that let’s take a look at some of the standout things from REGN’s latest quarter. You can find all the Q2 materials here.
[NFTBC does not give advice - please do your own research. I currently own REGN shares]
