Regeneron Pharmaceuticals Biotech is waiting for the FDA’s decision
The biotech company Regeneron Pharmaceuticals Inc. (REGN) has applied to the FDA to approve the drug Libtayo as a therapy for a dangerous type of cancer. The potential market in the U.S. alone is about $500 million. Regeneron Pharmaceuticals, together with Sanofi, continues to test Libtayo, a drug aimed at treating various types of oncological diseases.
The latest trial concerns the treatment of recurrent and metastatic cervical cancer. Last week, the FDA accepted Libtayo for priority consideration as a treatment for patients with these diseases. A can a decide before January 30, 2022. Libtayo clinical trials conducted by Regeneron and Sanofi have yielded strong results in treating patients with recurrent or metastatic cervical cancer.
A comparison of patients receiving Libtayo every three weeks with those receiving conventional chemotherapy treatment found that Libtayo significantly reduced the risk of death. The drug reduced the risk of death by 31% during the entire clinical trial.
Such a high survival rate has caused the FDA to consider this drug as a priority. According to various estimates, the targeted market of Libtayo patients in the USA alone is about 20,000 people. But this may be a conservative calculation, given that there are tens of thousands of cervical cancer survivors in the country, and the recurrence rate of the disease is about 35%.
Based on Libtayo’s annual price of $160,000, Regeneron Pharmaceuticals could count on $2.5 billion in annual sales in the United States. But taking into account the competitive environment (primarily with Merck’s Keytruda drug), Libtayo therapy can capture about 20% of the market. Thus, the potential annual sales volume for this drug could be about $500 million.
Under an agreement with Sanofi, Regeneron Pharmaceuticals receives all revenue from the joint drug in the United States and half of the revenue from sales on the international market. Regeneron Pharmaceuticals received $218 million from the sale of Libtayo this year. Consequently, adding another $500 million in annual revenue in the U.S. would more than double the current income.
At the same time, the company manages to convert its revenue into high-profit figures. For comparison, in the first half of the year, revenue amounted to $7.67 billion, and net profit reached $4.21 billion, that is, 55% of sales.
An additional $500 million from Libtayo sales in the U.S. could turn into almost $300 million in net profit. At the auction on October 12, the REGN share was worth $544.44.
