UPDATE 1-Regeneron eye drug sales grow, but fall short of expectations

Thu May 8, 2014 10:11am EDT

(Adds analyst & CEO comment, stock movement)

May 8 (Reuters) - U.S. sales of Regeneron Pharmaceuticals Inc's eye drug Eylea missed market estimates due to a drop in distributor inventory and a severe U.S. winter that prevented patients from visiting clinics to receive the treatment.

The drug has been steadily grabbing market share from Roche AG's Lucentis since its launch in late 2011.

U.S. sales of Eylea rose 14 percent to $359 million during the first quarter ended March 31.

But Morningstar analyst Stefan Quenneville said Eylea's sales had "slowed to some degree" as the market had "reached a bit of a steady state."

"I think it's an element of people having extremely high expectations, given the sort of trend the company was on, of sort of providing guidance they would then subsequently beat," Morningstar analyst Stefan Quenneville said.

Cowen analysts said the market consensus for U.S. Eylea sales was $404 million for the quarter.

Sales of the drug outside the United States increased more than three-fold, to $218 million. Bayer AG markets the drug in countries other than the United States and Regeneron recognized $61 million from its share of net profit from Eylea's international sales.

Eylea is an injectable drug used to treat wet age-related macular edema - the leading cause of blindness in the elderly.

Regeneron reiterated its 2014 U.S. sales forecast for Eylea, saying it still expects the drug's U.S. sales to reach $1.7 billion to $1.8 billion this year.

The biotechnology company posted a better-than-expected first-quarter adjusted profit, even as net income fell to $65.4 million, or 58 cents per share, in the quarter ended March 31, from $98.9 million, or 90 cents per share, a year earlier.

A higher tax rate hurt earnings in the latest quarter, the company said. Excluding items, Regeneron earned $2.26 per share.

Total revenue rose 42 percent to $625.7 million.

Analysts on average had expected an adjusted profit of $2.20 per share, on revenue of $609.5 million, according to Thomson Reuters I/B/E/S.

Eylea is also being developed for use in diabetic macular edema (DME) and macular edema following a common retinal disease.

Regeneron shares were down 1.6 percent at $282.41 in early trading on the Nasdaq. (Reporting by Esha Dey in Bangalore; Editing by Kirti Pandey and Simon Jennings)

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