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UPDATE 2-Regeneron raises Eylea sales view, shares hit all-time high

Fri May 3, 2013 2:06pm EDT

* Q4 adjusted earnings of $1.78/shr vs est $0.98/shr

* Eylea rev more than doubles to $314 mln

* Shares hit life-high of $270 (Adds comments from conference call, analyst comment)

By Vrinda Manocha

May 3 (Reuters) - Regeneron Pharmaceuticals Inc raised the full-year sales estimate for its eye drug Eylea after strong sales of the product helped it beat first-quarter estimates by a wide margin.

Regeneron shares jumped 9 percent to a life high of $270 on Friday after the drugmaker raised its estimate for 2013 Eylea sales to between $1.25 billion and $1.33 billion. It had earlier projected $1.2 billion to $1.3 billion.

Shares of Regeneron have nearly doubled in value over the past year.

Eylea, which treats age-related macular degeneration (AMD) - the most common cause of blindness in the elderly -- has been swiftly grabbing market share from rivals such as Roche AG's Lucentis since its launch in late 2011.

In 2012, Regeneron raised its sales estimate for the year four times.

The drug is also expected to benefit as Botox maker Allergan Inc said on Wednesday its drug Darpin, a potential Eylea competitor, could be delayed by up to two years.

"With Darpin's recent stumble, the most prominent competitive threat to the Eylea franchise has been largely removed," Cowen & Co analyst Phil Nadeau said in a note to clients.

Regeneron also strengthened its foothold in the eye care market with an agreement to acquire from partner Sanofi all rights to two antibodies that could potentially be used along with Eylea to treat AMD.

Analysts said such a combination of drugs would be much better at treating the eyesight-robbing condition than Roche's Lucentis or Avastin, a cancer drug.

The latest deal with Sanofi includes an upfront payment of $20 million, and up to $45 million more in milestones.

However, on a post-earnings call with analysts, Regeneron Chief Len Schleifer said a cut in Medicare reimbursement for Eylea due to sequestration could cause some physicians to shift to Avastin, used off-label to treat the same indication.

The impact of such a shift is, however, likely to be small given the safety effects of using Avastin, RBC Capital Markets analyst Adnan Butt said.

Earlier this year, the U.S. Food and Drug Administration reported multiple cases of serious eye infection from compounded or altered versions of Avastin used to treat macular degeneration.

"Eylea is working in hard-to-treat patients who are not responding to Lucentis or Avastin, which keeps us confident about Eylea growth continuing," Butt said.

CEO Schleifer also cautioned that Eylea's U.S. sales growth would be slower for the rest of this year as most of the sales now come from existing patients who have moved to a less frequent dosing.

Leerink Swann analyst Joseph Schwartz said Regeneron may be more cautious now in its forecasts as more patients move to the less frequent regimen. Investors have become accustomed to more dramatic increases in the estimates, he added.

Excluding one-time items, Regeneron earned $1.78 per share in the first quarter, well above analysts' average estimate of 98 cents per share.

Sales of Eylea, which the company co-owns with Bayer AG , rose 153 percent to $314 million in the quarter.

Total revenue -- which includes collaboration revenue from Bayer and Sanofi -- rose 90 percent to $440 million, ahead of the average analyst estimate of $428.3 million, according to Thomson Reuters I/B/E/S.

Regeneron's net profit rose to $99 million, or 90 cents per share, from $12 million, or 11 cents per share, a year earlier. (Reporting by Vrinda Manocha, additional reporting by Zeba Siddiqui in Bangalore and Ransdell Pierson in New York; Editing by Sreejiraj Eluvangal)

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