Regeneron (NASDAQ:REGN) has done an admirable job in diversifying beyond Eylea. In the first quarter of 2020, total product sales (some of which are recorded by Bayer (OTCPK:BAYZF) and Sanofi (SNY)) were $3.0 billion, and Eylea accounted for $1.9 billion (63%). This compares with the first quarter of 2019, when total product sales were $2.3 billion, and Eylea sales were $1.7 billion (77%). The main driver of the increase was Dupixent, which increased by 129% to $855 million. This drug, an IL4/IL 13 inhibitor, is rapidly attaining the corporate goal of becoming a pipeline in a product. It is currently approved for uncontrolled moderate to severe atopic dermatitis for patients age six and above, certain types of asthma, and chronic rhinosinusitis with nasal polyposis in patients age eighteen or greater. It is also being studied in other indications and as part of a combination regimen for grass and peanut allergies. Worldwide Dupixent revenues should increase to nearly $4.0 billion in 2020 versus $2.3 billion in 2019, and they should continue to grow at a 20+% rate.
Libtayo revenues were $194 million in 2019 and they should double this year. In 2020, it will be filed for approval to treat PD-L1 high first line non small cell lung cancer (NSCLC) patients and for basal cell carcinoma. Management noted at its recent ASCO update that the PD-(L)1 market exceeds $21 billion. With a growing list of indications, I forecast it to exceed $45 billion by 2025. It should be noted that Regeneron is also studying Libtayo in combination with chemotherapy in all PD-L1 first line NSCLC patients, and in combination with its BiSpecific antibodies. The company also has seven external clinical stage combinations with Libtayo for indications including renal cell carcinoma, glioblastoma, prostate cancer and cervical cancer. I project Libtayo sales to exceed $1 billion in 2022.
Eylea, the leading anti-VEGF ophthalmic medication, is used to treat age-related macular degeneration (AMD), diabetic macular edema (DME), diabetic retinopathy (DR) and macular edema following retinal vein occlusion. Worldwide revenues increased in 2019 by 12% to $7.5 billion. In the first quarter of 2020, sales advanced by 6% to $1.9 billion, and were adversely impacted in the United States toward the end of the quarter by the coronavirus pandemic. In April, Eylea demand declined by 15%, but it has since begun to pick up with a relaxing of restrictions. Eylea worldwide sales should grow at an average annual 7% rate for the next three years.
Regeneron has two efforts in combating COVID-19. The first entails use of its IL-6 inhibitor, Kevzara, which is in Phase 3 clinical study for critical patients. Increasing levels of IL-6 have been associated with the severity of COVID-19 infection. Additionally, the company is advancing REGN-COV2, an antibody cocktail, designed to prevent and treat the virus. Clinical studies should begin this month.
In early stage clinical development, Regeneron has multiple BiSpecific antibodies for both solid and hematological cancers, including ovarian cancer, prostate cancer, follicular lymphoma, non-Hodgkin's lymphoma and multiple myeloma. Another class of BiSpecific antibodies, PiGs (peptide in groove), can direct T cell killing of target cells. One of these BiSpecifics, REGN1979, is being studied in lymphomas and a BLA could potentially be filed in 2022.
In the near term, Phase 3 data on fasinumab, a recombinant anti nerve growth factor antibody being investigated for pain relief in patients with osteoarthritis, will be made available. There have been prior failures in this compound class, but Regeneron and its partner Teva (TEVA) may have selected an appropriate dose that minimizes the arthropathy side effect. Given the ongoing opioid crisis, there is heightened interest in new classes of pain relievers. Also, there will soon be a Phase 3 readout on the use of Dupixent in pediatric asthma patients age six to eleven.
Regeneron also has partnerships with several leading biopharmaceutical companies that should drive future growth. Recently, it expanded its collaboration with Intellia Therapeutics (NTLA) to include joint development of products for the treatment of hemophilia A and B, as well as to develop additional products for in vivo CRISPR/Cas9-based therapeutic targets. In 2019, the company established a collaboration with Alnylam (ALNY) to develop and commercialize RNA interference (RNAI) therapeutics across a broad range of in the eye and central nervous system diseases, as well as certain liver targets. In 2018, Regeneron announced a collaboration with bluebird bio (BLUE) to develop novel immune cell therapies for cancer. Six targets were initially selected. It is noteworthy that Intellia, Alnylam and bluebird are leaders in their respective fields.
Last month, Regeneron announced that Sanofi had elected to exit its investment in the company's shares. As part of the transaction, Regeneron purchased $5 billion of the common stock, using $3.5 billion in cash and a $1.5 billion bridge financing.
Regeneron appears to have succeeded in diversifying its product portfolio, thereby reducing its short-term dependence on Eylea, while expanding its pipeline and forming partnerships with leading biopharmaceutical companies. This is clearly the result of adopting a long-term planning horizon, which should bear fruit over the decade. In 2019, Regeneron achieved non-GAAP EPS of $24.67, and I forecast this to increase to $28.00 in 2020 and $32.50 in 2021. I am recommending purchase with a price target of $715.
