(Reuters) - Regeneron Pharmaceuticals Inc reported a much better-than-expected quarterly profit on strong demand for its flagship Eylea drug and said it would end one of its agreements with France’s Sanofi SA to develop antibodies by the end of the year.
Shares of Regeneron, which also raised its full-year growth forecast for the eye treatment, closed down 2 percent at $467.11 on Thursday.
“Surprisingly, Regeneron announced its decade-long antibody discovery deal with Sanofi will end ...,” CFRA Research’s Jeffrey Loo said, adding that the deal provided the U.S. drugmaker with over $1 billion in R&D funding.
Sales of Eylea, which is used to treat macular degeneration and other eye disorders that cause age-related vision loss, came in at $919 million in the second quarter and beat analysts’ estimates, helped by higher demand.
Eylea had maintained a market-leading position in all approved indications in the United States despite competition from drugs such as Lucentis from Roche Holding AG and Novartis AG, Regeneron said.
Regeneron now expects U.S. Eylea sales to grow 10 percent over 2016. It had previously estimated single-digit percentage growth over the $3.32 billion generated in U.S. sales last year.
The U.S. biotech is betting on two recently approved, potential blockbusters - its eczema treatment Dupixent and rheumatoid arthritis drug Kevzara - to reduce its heavy reliance on Eylea.
Partner Sanofi revealed earlier this week that Dupixent generated sales of 26 million euros ($30.88 million) in the drug’s first full quarter on the market. This came in well short of analysts’ expectations.
Regeneron on Thursday said it was encouraged by initial Dupixent adoption, and expected to secure broad U.S. market access and European approval by the end of 2017.
Key data from a trial testing Dupixent as a treatment for asthma is also expected later this year.
Kevzara, which was launched in the United States in late May, generated $1 million in sales.
Sanofi said the expiration of the antibody discovery agreement would not impact the agreement covering Praluent, Dupixent and Kevzara.
Regeneron is also banking on a plethora of experimental drugs in its pipeline to fuel long-term growth. In particular, it highlighted the potential of its cancer immunotherapy, REGN2810.
Lower expenses and a significantly smaller tax rate also helped Regeneron smash analysts’ estimates for adjusted profit by a dollar, according to Thomson Reuters I/B/E/S.
Total revenue of $1.47 billion also beat estimates.
Reporting by Manas Mishra and Natalie Grover in Bengaluru; Additional reporting by Divya Grover; Editing by Arun Koyyur, Supriya Kurane and Maju Samuel