• Regeneron shares have fallen 50% from their 52-week high, weighed down by biosimilar pressure on its flagship eye drug Eylea and investors’ concern over slowing revenue growth.
• The company is targeting a new phase of growth, powered by a robust oncology pipeline and some promising late-stage therapies in immunology and rare diseases.
• Backed by over $17 billion in cash, strong free cash flows and a newly launched dividend, Regeneron trades at a discount to historical and peer valuations – offering a compelling setup for long-term investors.

Regeneron (REGN) is back in the headlines with its planned acquisition of 23andMe – a move that could expand its reach in genetically informed drug development. But while the market digests the strategic implications, the real story may be hiding in plain sight: The stock is down nearly 50% from its 52-week high and now trades at a valuation that looks increasingly attractive.

Behind the sell-off is a familiar mix of patent expirations, shifting product dynamics and cautious sentiment toward the broader biotech/pharma sectors. Yet beneath the surface, Regeneron remains highly profitable, cash-rich and armed with one of the most promising pipelines in large-cap pharma. For investors willing to look past the near-term noise, the current setup offers a rare chance to buy a blue-chip biotech at a discount.

A biotech heavyweight at a strategic crossroads

Regeneron has long stood among biotech’s elite, renowned for its scientific precision, blockbuster therapies and a pipeline that consistently delivers. But heading into mid-2025, the company is clearly in transition. Shares have fallen nearly 50% from their August peak above $1,200 per share, pressured by intensifying biosimilar competition for flagship drug Eylea, softening revenue trends and creating the impression the company is evolving from high-growth disruptor to mature, cash-generating stalwart. While that evolution isn’t inherently negative, it invites renewed scrutiny – and creates an opportune moment to reassess both the company’s outlook and its valuation.

Founded in 1988 with headquarters in Tarrytown, New York, Regeneron has built its reputation on breakthrough biologics, many of them discovered and developed in-house. Its VEGF inhibitor, Eylea, became a category-defining therapy for retinal disease and, for over a decade, served as the backbone of the company’s revenue stream. But Eylea’s patents have begun to expire, and competition from biosimilars, especially Amgen’s (AMGN) newly launched Pavblu, has already begun to erode the company’s dominance in this high-margin business. Regeneron is responding with Eylea HD, an 8mg high-dose version with differentiated dosing and new delivery formats, but its ability to fully offset losses from legacy Eylea remains a question mark.

In the meantime, the company is shifting to newer growth engines. Chief among them is Dupixent – an anti-inflammatory blockbuster developed with Sanofi (SNY) – which delivered over $14 billion in sales last year and continues to show double-digit growth. With fresh label expansions into COPD and additional indications under FDA review, Dupixent is widely expected to carry the company through the next leg of its growth cycle. But it’s not just about Dupixent. Regeneron has made meaningful strides in oncology, where drugs like Libtayo and bispecific antibodies such as odronextamab and linvoseltamab are beginning to gain commercial traction. Combined, these platforms are shaping up to be the company’s next multi-billion-dollar pillars, even though their paths are still nascent and carry execution risk.

Scientific depth aside, Regeneron has also embarked upon a new capital strategy. In 2025, the company initiated its first-ever quarterly dividend and expanded its share repurchase authorization to $4.5 billion, underscoring confidence in its long-term free cash flow generation. These moves reflect a maturing company that is no longer plowing every dollar into R&D, but actively managing its capital structure and shareholder returns. At the same time, it is doubling down on U.S. manufacturing investments—committing over $7 billion to expansion plans in New York and North Carolina amid rising geopolitical and regulatory uncertainty tied to drug pricing reforms and import tariffs.

Still, the challenges can’t be overlooked. With the risk of product concentration, legal headwinds surrounding Medicare reimbursement practices and a tough macro backdrop for biotech/pharma, investor sentiment remains fragile. And while the company’s drug pipeline is strong, its ability to deliver near-term upside is unproven. The next few quarters will be crucial in determining whether Regeneron can pivot from legacy dependence to diversified growth without losing its edge. 

Earnings hold steady as Regeneron pivots toward new growth phase

Regeneron entered 2025 facing heightened scrutiny, and its Q1 earnings report reflected both the strength of its core franchises and the headwinds tied to a changing product mix. The headline numbers were mixed: total revenue declined 4% year-over-year to $3.0 billion, as weakness in legacy Eylea sales was offset by strength elsewhere in the portfolio. Net product sales fell 20%, driven by a 39% year-over-year drop in U.S. Eylea revenue. 

At the same time, Regeneron’s flagship anti-inflammatory therapy Dupixent remains a powerhouse. Global net sales, booked by Sanofi, climbed 19% year-over-year to $3.7 billion, buoyed by expanded indications including chronic spontaneous urticaria and COPD. The company’s share of collaboration profits surged to over $1 billion, helping to offset Eylea’s decline and underpinning an important shift in the company’s revenue composition. Libtayo, the company’s leading oncology asset, also posted 8% growth globally, with US sales up 21% – a promising sign as it continues to build out its cancer portfolio.

Profitability remains a clear strength, albeit with some signs of margin compression. GAAP net income rose 12% to $809 million, while non-GAAP earnings fell 17% to $928 million, largely because of lower product sales and increased R&D investments. Diluted GAAP EPS came in at $7.27, with non-GAAP EPS at $8.22 – both still robust in absolute terms. However, gross margins took a modest hit, with non-GAAP gross margin on net product sales dipping to 85% from 89% a year ago, reflecting inventory write-offs and heightened competition in the anti-VEGF niche. R&D spending increased 6% year-over-year, consistent with the strategic plan to generate innovations in its immunology, oncology and rare disease programs.

Importantly, Regeneron’s financial foundation remains rock-solid. The company ended Q1 with $17.6 billion in cash and marketable securities against just $2.7 billion in debt, underscoring ample flexibility for R&D, acquisitions and shareholder returns. Free cash flow came in at $816 million for the quarter – supporting both the launch of a new quarterly dividend ($0.88 per share) and a significant uptick in buybacks. Roughly $1.1 billion worth of shares were repurchased in Q1 alone, with another $3.9 billion authorized going forward. These moves reflect a broader shift toward capital returns and a maturing operating model.

In sum, Regeneron’s Q1 results illustrate a company in financial transition. While top-line growth is under pressure because of the erosion of Eylea’s exclusivity, newer products like Dupixent and Libtayo are more than holding their own – and the pipeline remains dense with high-potential opportunities. Profit margins are still strong by industry standards, and the balance sheet gives management plenty of optionality. For investors, the earnings snapshot offers a clear reminder: Regeneron isn’t broken, but it is evolving – and how it handles that evolution will determine whether the recent sell-off proves to be a temporary pullback or a deeper inflection.

A quality name trading at an attractive valuation

After a sustained slide in its share price, Regeneron now trades at a valuation that appears meaningfully discounted. The company’s GAAP price-to-earnings (P/E) ratio stands at just 15.1 on a trailing 12-month basis, well below the biotech sector median of 26.8. That spread is striking, especially for a firm that remains highly profitable, generates billions in free cash flow annually and boasts one of the most diversified pipelines in large-cap biotech. Even after adjusting for modest revenue compression and Eylea-related headwinds, the company’s fundamentals suggest the market may be pricing in too much pessimism.

Other multiples paint a more complicated picture. Regeneron’s price-to-sales (P/S) ratio of 4.5 is above the sector median of 3.3, which could reflect continued confidence in Dupixent’s growth trajectory and the pipeline’s latent value. Conversely, its price-to-book (P/B) ratio of 2.1 sits just under the sector median of 2.2, suggesting investors aren’t paying a premium for the company’s capital base despite its track record of R&D efficiency and strong returns on invested capital. Taken together, the valuation profile reflects a company straddling two narratives: a former high-growth juggernaut facing near-term deceleration, and a cash-rich innovator trading at a relative discount.

Analyst sentiment leans heavily bullish. Of the 28 analysts covering the stock, 22 rate shares a “buy” or “overweight,” with an average price target near $800 per share – a stunning 30% higher than the stock’s current price. That disconnect between target and trading price suggests Wall Street views the recent sell-off as overdone, especially considering the company’s durable profitability, robust pipeline progress and shareholder-friendly capital return initiatives. Regeneron’s newly initiated dividend and $4.5 billion buyback authorization also reinforce the idea that its shares are underappreciated at current levels.

Critics might argue that a low P/E alone doesn’t make a stock cheap—especially in a sector where future earnings power depends so heavily on regulatory success and market exclusivity. But that’s precisely where Regeneron’s investment case gains nuance. While Eylea’s erosion is real and reflected in the topline, Dupixent continues to deliver double-digit sales growth and enjoys protection through the end of the decade. Meanwhile, newer assets in oncology, rare disease and inflammation are advancing through late-stage trials and could become material revenue drivers over the next a year or two. 

In this context, Regeneron’s valuation starts to look more like an opportunity than a red flag. The market may still be adjusting to a new growth profile, but the financial foundation remains intact, the pipeline is deep and management is executing a clear capital allocation strategy. For value-conscious investors with a long-term horizon, the company offers a rare combination: Strong fundamentals, underappreciated optionality and a discounted multiple that could eventually rerate if even a portion of the pipeline delivers.

Investment takeaways

Regeneron stands out as one of the best-capitalized names in biotech. With more than $17 billion in cash and equivalents, robust free-cash-flow generation and a freshly launched dividend alongside a $4.5 billion buyback authorization, the company has ample firepower to fuel R&D while returning capital to shareholders. Q1 results – though weighed down by legacy Eylea pressures – demonstrated both resilience and adaptability, with profit margins remaining well above industry norms. For long-term investors, this blend of balance-sheet strength and strategic optionality is particularly compelling.

The valuation backdrop only strengthens the case. Trading at just 15.1× trailing GAAP earnings and 2.1× book value, Regeneron sits at a meaningful discount to both large-cap biotech peers and its own historical averages. Wall Street remains firmly bullish: 22 of 28 analysts rate the stock a “buy” or “overweight,” with an average price target near $800 per share—well above its current price of $610. With over $17 billion in cash, a robust pipeline,and signs of execution across key franchises, we believe the market is underestimating ]the company’s next phase. Shares look well-positioned to re-rate higher in the months ahead.

That said, risks persist – further erosion in Eylea revenue, potential regulatory setbacks or a broader market pullback could cloud the near-term outlook. Yet Regeneron has navigated similar inflection points, often emerging leaner, stronger and more focused. The company’s recent acquisition of 23andMe’s core assets adds another layer of strategic potential, expanding its access to one of the world’s largest genetic datasets – an asset that could supercharge its drug discovery engine in the years ahead. For investors seeking asymmetric upside in a proven biotech platform, it offers an attractive entry point. We rate the stock a “buy,” believing the groundwork for a sustained rebound is already in place—even if broader sentiment has yet to catch up.

Andrew Prochnow, Luckbox analyst-at-large, has traded the global financial markets for more than 15 years, including 10 years as a professional options trader.

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