Each and every time investors believed Regeneron's (NASDAQ:REGN) highest high value has been reached, like a magician, it pulled another chicken out of its long black hat and made it lay another golden egg. Regeneron’s new different egg is expected to boost its wealth, turning the current estimation upside down, i.e., from overvalued or fairly valued into undervalued.
The golden egg this time will put Regeneron in the diabetes business with the same drug that had put it in the ophthalmology business. Indeed, clinical trial results with Eylea demonstrated statistical significance in trapping diabetic macular edema - one of the major side effects of diabetes and another cause of blindness in more than 6 million young and middle-aged diabetic adults.
Eylea is already approved to treat wet age-related macular edema - the leading cause of blindness in the elderly. The company had reported its higher second-quarter profit had missed Wall Street estimates as Eylea sales have slowed as a consequence of existing patients moving to a less frequent dosing. Following the news on diabetic macular edema, the firm’s projections will be much more optimistic.
Results of two trials, Vivid-DME and Vista-DME, have demonstrated a successful outcome in diabetic macular degeneration patients. The outstanding results led to Regeneron’s decision to apply for U.S. approval to treat diabetic macular edema in 2013 - a year ahead of its previously projected timeline. Bayer AG, which sells the drug outside the United States, will do the same and apply European approval to treat DME in 2013.
Patients in the two-year-long studies received either monthly injections of Eylea, or injections every other month following a course of five monthly injections. Eylea’s results were compared with the results of a laser surgery, laser photocoagulation, in which leaky blood vessels in the eye are cauterized to stop the leakage that leads to vision loss.
In the Vista-DME trial, those who received monthly Eylea on average were able to see 12.5 more letters on an eye chart test after one year compared to before receiving treatment.
Those in the every other month group saw vision improve by 10.7 letters. That compared with a mean change of just 0.2 letters for the laser group.
In the Vivid-DME trial, the vision improvement was 10.5 letters for the Eylea monthly and 10.7 letters for less-frequent dosing groups, versus 1.2 letters for those who received laser treatment.
These results are what researchers consider highly statistically significant.
Eylea was generally well tolerated in the studies with the incidence of serious adverse side effects similar across all three treatment groups, the company said.
The drug that was first approved in November of 2011 for wet age-related macular degeneration is currently treating another eye disease called macular edema following a condition known as central retinal vein occlusion. In a short period of time, the drug will be in the hands of eye specialist to treat a third condition, also a cause of blindness in diabetic patients.
As Eylea has been grabbing market share from Roche Holding's drug Lucentis, Regeneron has repeatedly increased Eylea sales forecasts since its approval. According to Regeneron, U.S. sales of the drug rose 70 percent in the second quarter to $330 million. Eylea sales have more than doubled in the last quarter.
Regeneron raised Eylea’s 2013 sales estimate for the second time. It now expects Eylea to have sales of $1.3 billion to $1.35 billion up from its previous forecast of $1.25 billion to $1.33 billion according to Reuters.