Sales of Regeneron Pharmaceuticals Inc.'s eye drug Eylea and skin treatment Dupixent gave the New York company a needed boost to beat analysts' expectations in both profit and revenue in 2019's second quarter.
U.S. sales of Eylea grew 17% to $1.16 billion amid mounting competition from Roche Holding AG and Novartis AG's Lucentis in the eye disease age-related macular degeneration. Also posing a threat is off-label use of Roche's cancer drug Avastin for the same condition.
Regeneron CEO Len Schleifer
Globally, where the drug is marketed by Bayer AG, sales grew 13% to $1.9 billion. Eylea led Regeneron to 32% growth in overall product sales compared to the second quarter a year ago. Total revenue grew 20% year over year to $1.93 billion.
A U.S. Food and Drug Administration approval in May for diabetic retinopathy solidified Eylea's leading position in the space. Regeneron's chief commercial officer, Marion McCourt, said on a second-quarter earnings call held Aug. 6 that the company's sales force is expanding in all indications.
Regeneron CEO Len Schleifer said Eylea's success in the face of competition is ultimately a testament to the drug's clinical effectiveness.
"I do think there is plenty of room for growth," Schleifer said. "At the end of the day, vision and maintaining improved vision is the gold standard — it's what the FDA measures you by, I think it's what most patients care most about, and we are unsurpassed in that."
Dupixent stems Praluent losses
Schleifer said the Dupixent collaboration with Sanofi to treat various skin diseases and allergies became profitable during the second quarter. Global sales of Dupixent reached $557 million in the second quarter, and Schleifer said global net sales are now expected to exceed $2 billion on an annualized basis.
Signaling growth down the road for Dupixent, Regeneron announced both regulatory and clinical wins on the day of the earnings call: an approval in Europe to treat eczema, also known as atopic dermatitis, in adolescents and successful results from a late-stage study in young children with eczema.
Schleifer said Regeneron is depending on Dupixent to make up for flagging profitability of Praluent, the company's heart drug that also comes from a collaboration with Sanofi.
"We expect profits to continue to increase driven by growth in Dupixent as well as disciplined cost management across the collaboration to stem losses from Praluent by better aligning investments with revenues," Schleifer said.
Later on in the call, Schleifer acknowledged the "highly competitive space" for heart disease and declined to discuss Praluent strategies moving forward.
Forging into immuno-oncology
Regeneron reported stronger numbers on its cancer drug Libtayo during the quarter, a performance McCourt attributed to becoming the standard of care in cutaneous squamous cell carcinoma, or CSCC.
"Approximately 90% of new patient starts in CSCC within the anti-PD-L1 class are now going to Libtayo," McCourt said. Libtayo is also a Sanofi collaboration for Regeneron.
Schleifer said lung cancer — where Merck & Co. Inc.'s Keytruda is far and away the class leader — could be the next space where Libtayo can progress. Immuno-oncology drugs like Libtayo and Keytruda are called PD-1 inhibitors as they block the pathway that otherwise keeps immune cells from killing cancer cells.
"We're very excited about the fact that our PD-1 might have very good activities already demonstrated as we've heard in certain settings," Schleifer said. "So we're excited to see how it's going to perform in the lung cancer setting and whether it can be one of the rare PD-1s that can really provide a lot of benefit there."