Dj Regeneron Pharmaceuticals Inc. Stock Outperforms Competitors Despite Losses On The Day

Bayer AG BAYRY reported third-quarter 2024 core earnings of 7 cents per American Depositary Receipt (ADR), which missed the Zacks Consensus Estimate of 17 cents. The company reported earnings of 10 cents per ADR in the year-ago quarter.

Core earnings of €0.24 per share deteriorated 36.8% year over year due to impairment losses at the Crop Science division.

Total sales in the reported quarter were $10.9 billion (€9.9 billion), down 3.6% on a reported basis.

On a currency and portfolio-adjusted basis, sales increased 0.6% year over year.

Year to date, shares of Bayer have lost 30.1% against the industry’s growth of 11.6%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

All growth rates mentioned below are on a year-over-year basis after adjusting for currency and portfolio changes.

BAYRY’s Q3 Results in Detail

Bayer reports under three segments, namely Crop Science, Pharmaceuticals and Consumer Health.

In the reported quarter, Crop Science sales decreased 3.6% to €4 billion. Within this segment, Herbicides business was down 11.5% due to volume declines for glyphosate-based products. This was mainly due to purchasing patterns normalizing in Latin and North America.

Fungicides sales were up 13.1% due to increased volumes in all regions. Corn Seed & Traits sales decreased 19.3% due to an overall acreage decline, primarily driven by Latin America. Sales from the Soybean Seed & Traits business declined 2.5% due to a weather-related delay to the start of the season in Latin America. The Insecticides business also grew 9.5%, driven by higher volumes in Latin America. The Vegetable Seeds business recorded encouraging gains that were largely driven by higher volumes and prices in Latin America.

BAYRY’s revenues in the Pharmaceuticals segment increased 2.3% to €4.5 billion. Nubeqa (for cancer) sales surged 83.2% to €417 million, recording gains in all regions and witnessing significant improvements in volumes, especially in the United States and EU. Kerendia sales surged 96.4%, mainly due to a substantial rise in volumes in the United States and business expansion in China.

However, sales of oral anticoagulant Xarelto, co-developed with J&J JNJ, decreased 23% to €802 million due to competitive pressure from generics, especially in Canada and Europe.

In the U.S. market, Xarelto is marketed by J&J. Bayer earns license revenues from JNJ for Xarelto sales in the United States.

Sales of the ophthalmology drug, Eylea, increased 8.6% to €848 million, driven by higher volumes in Europe and Japan as well as a one-time effect of reimbursement in the United Kingdom.

Please note that Bayer’s HealthCare unit co-develops Eylea with Regeneron REGN, which records net product sales of Eylea in the United States. BAYRY records net product sales of Eylea outside the country. REGN records its share of profits/losses in connection with the sales of Eylea outside the United States.

Consumer Health sales rose 5.7% to €1.4 billion, driven by increases in Dermatology (+7.4%) and Pain & Cardio (+10.9%) categories. Dermatology sales gained from continued strong demand for Bepanthen.

Nutritionals (+3.6%) and Allergy & Cold business (+3.1%) also boosted the Consumer Health business.

BAYRY Updates 2024 Guidance

Bayer reiterated its previously provided currency-adjusted guidance for 2024 for the total group. The company expects to generate sales in the range of €47-€49 billion.

However, in view of the weaker-than-anticipated development of the agricultural market, BAYRY revised its forecast for divisional sales. Business performance is below initial expectations at Crop Science and Consumer Health. Nonetheless, Pharmaceuticals division sales is likely to come in at the upper end of the revised guidance.

For the Crop Science Division, Bayer now expects currency and portfolio-adjusted sales growth to decline around 1% to 3% (previous forecast -1% to +3%). For the Pharmaceuticals Division, Bayer expects currency and portfolio-adjusted sales growth to be flat to grow 3% (previous forecast: down -4% to flat year over year). Consumer Health sales growth is projected to increase between 1% and 3% (previous forecast: 3-6%).

Bayer Aktiengesellschaft Price, Consensus and EPS Surprise

Bayer Aktiengesellschaft price-consensus-eps-surprise-chart | Bayer Aktiengesellschaft Quote

Pipeline Updates

In September, BAYRY obtained received regulatory approval for the Eylea 8 mg pre-filled syringe in the European Union.

The company also filed a new drug application (NDA) with the FDA for a third indication for cancer drug Nubeqa (darolutamide) for its use in combination with androgen deprivation therapy (ADT) in patients with metastatic hormone-sensitive prostate cancer (mHSPC).

In October, BAYRY announced that the FDA had accepted the NDA for elinzanetant, an investigational compound for the non-hormonal treatment of moderate to severe vasomotor symptoms associated with menopause.

Our Take on BAYRY's Q3 Perfomance

Although Bayer’s earnings declined in the third quarter due to impairment losses at the Crop Science division, sales growth was encouraging at the Pharmaceutical division. New products, Nubeqa and Kerendia, retained their impressive momentum and offset the negative impact of a decline in Xarelto sales. Consumer Health business, too, posted growth. However, the Crop Science business was adversely impacted by significant declines in glyphosate-based herbicides.

The company is working to expand the labels of its key drugs, Nubeqa and Kerendia, which should boost growth.

Successful drug development is imperative for Bayer amid multiple challenges. The failure of a late-stage study on asundexian was a major setback for the company. BAYRY had earlier slashed dividends to conserve cash as increasing Roundup litigation charges adversely impacted the bottom line.

Bayer's Zacks Rank

BAYRY currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zacks Investment Research

Intellia Therapeutics, Inc. NTLA incurred third-quarter 2024 loss of $1.34 per share, which was narrower than the Zacks Consensus Estimate of a loss of $1.37. In the year-ago quarter, Intellia had incurred a loss of $1.38 per share.

The company’s total revenues currently comprise only collaboration revenues. Intellia reported revenues of $9.1 million for the third quarter of 2024 compared with $12 million reported in the year-ago quarter. Revenues however beat the Zacks Consensus Estimate of $8 million.

The year-over-year decrease in revenues was due to a reduction in revenues related to the AvenCell license and collaboration agreement.

Shares of Intellia have plunged 47.6% year to date compared with the industry’s decline of 2.4%.

As the medical breakthroughs progress, biotech stocks are expected to play a significant role in revolutionizing healthcare. Medical advancements in neuroscience and gene therapy have opened up new horizons within this sector.

Therefore, investors looking to benefit from such contribution to the economy might consider biotech stocks, namely, Regeneron Pharmaceuticals, Inc. , Biogen Inc. , and Gilead Sciences, Inc. .

Innovations targeting neurological disorders, such as Alzheimer’s and Parkinson’s, promise to transform treatment approaches by developing therapies that address the underlying causes of these conditions. Several collaborations involving large pharma companies signal a renewed interest in the neuroscience sector. Moreover, the companies are already moving on to early successes in neurotherapeutics, bringing hope to millions of patients.

The expanding field of gene-editing technology is also attracting significant investment interest as companies develop cancer therapies and other targeted treatments. There have been cell and gene therapy advancements like a recombinant AAV vector for glioblastoma treatment, peptide-modified AAV capsids for muscle targeting, and oral delivery systems for oligonucleotides.

So far this year, the FDA has approved 38 cellular and gene therapy products and also 38 novel drugs that target conditions from lung cancer to Alzheimer’s disease and various other chronic ailments. Furthermore, the global biotechnology market is anticipated to reach $4.61 trillion by 2034, growing at a CAGR of 11.5%.

The biotech industry offers an avenue that aligns financial and societal goals, paving the way for transformative impacts in medicine.

With that in mind, let’s delve into the fundamentals of the three Biotech stock picks, starting with the third choice.

Stock #3: Regeneron Pharmaceuticals, Inc. (REGN)

REGN discovers, invents, develops, manufactures, and commercializes medicines for treating various diseases worldwide. The company’s products include EYLEA injection, Dupixent Injection, Libtayo Injection, Praluent Injection, Kevzara Injection, and others.

On November 6, REGN received approval from the European Commission for Dupixent® (dupilumab) to treat eosinophilic esophagitis (EoE) in children aged 1 to 11 years. This approval expands EoE in adults and adolescents, creating a milestone in treating pediatric patients.

On October 18, REGN announced positive data for EYLEA HD® (aflibercept) injection 8 mg from an extension study of the Phase 3 PHOTON trial in patients with diabetic macular edema (DME). It demonstrates continued durable vision and anatomic improvements among 88% of EYLEA HD patients in this phase.

REGN, for the third quarter (ended September 30, 2024), reported total revenues of $3.72 billion, indicating a 10.6% growth from the prior year quarter. Its income from operations increased 6.2% year-over-year to $1.18 billion. The company’s non-GAAP net income came in at $1.46 billion and $12.46 per share, up 10% and 7.5% year-over-year, respectively.

The consensus revenue estimate of $3.63 billion for the fiscal first quarter (ending March 2025) represents a 15.4% increase year-over-year. The consensus EPS estimate of $10.99 for the same quarter indicates a 15.1% improvement year-over-year. The company has an excellent surprise history; it surpassed the consensus revenue and EPS estimates in three of the trailing four quarters.

The stock has surged marginally over the past year to close the last trading session at $829.43.

REGN’s POWR Ratings reflect this robust outlook. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

REGN has a B grade for Value and Quality. It is ranked #25 out of 328 stocks in the Biotech industry. Click here to see the additional ratings for REGN (Growth, Momentum, Stability, and Sentiment).

Stock #2: Biogen Inc. (BIIB)

BIIB is a global biopharmaceutical company focused on discovering, developing, and delivering advanced therapies for people living with serious and complex diseases worldwide. The company has a portfolio of medicines to treat multiple sclerosis (MS), spinal muscular atrophy (SMA), Alzheimer's disease, and amyotrophic lateral sclerosis (ALS).

On October 29, BIIB and Neomorph Inc. collaborated on research to discover and develop molecular glue degraders for Alzheimer’s, rare neurological and immunological diseases. This collaboration is under the terms where Neomorph's molecular glue degrader platform and BIIB’s expertise with cutting-edge innovation will be able to create a meaningful therapy for the patients.

In the same month, BIIB received Breakthrough Therapy Designation (BTD) from the U.S. Food and Drug Administration (FDA) for felzartamab, an investigational anti-CD38 monoclonal antibody. It is used to treat late antibody-mediated rejection (AMR) without T-cell mediated rejection in kidney transplant patients. This designation will enhance the efficiency in the development of the antibody.

For the third quarter of 2024, which ended on September 30, BIIB’s total revenues stood at $1.77 billion. The company’s net income stood at $388.50 million compared to the prior-year quarter’s loss of $68.10 million, while its EPS came in at $2.66 versus a loss of $0.47 per share last year. In addition, BIIB’s adjusted free cash flow rose 73.8% from the year-ago value to $900.60 million.

Per the updated financial guidance for the full year 2024, BIIB now forecasts non-GAAP EPS between $16.10 and $16.60, up from the previous estimate of $15.75 and $16.25.

Street expects BIIB’s revenue for the fiscal fourth quarter (ending December 2024) to increase 1.2% year-over-year to $2.41 billion. Its EPS for the same period is expected to register a 16.8% growth from the prior year, settling at $3.44. In addition, it surpassed the EPS estimates in three of the trailing four quarters, which is promising.

BIIB’s stock has surged 1.9% intraday to close the last trading session at $176.93.

BIIB’s bright prospects are reflected in its POWR Ratings. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

It also has an A grade for Value and a B for Growth and Sentiment. Within the same industry, it is ranked #7 out of 328 stocks. Click here to see BIIB’s ratings for Momentum, Stability, and Quality.

Stock #1: Gilead Sciences, Inc. (GILD)

GILD is a biopharmaceutical company dedicated to advancing treatments for life-threatening diseases such as human immunodeficiency virus (HIV), viral hepatitis, COVID-19, and cancer. Its portfolio of marketed products includes Biktarvy, Genvoya, Odefsey, Truvada, Harvoni, Vemlidy, and Veklury, among others.

On October 2, GILD signed non-exclusive, royalty-free voluntary licensing agreements with six pharmaceutical manufacturers to produce and sell generic lenacapavir (pending regulatory approval) in 120 countries (mainly low- and lower-middle-income) with high HIV incidence. This agreement is to make HIV prevention medicine available worldwide once it is approved.

On September 10, GILD and Genesis Therapeutics, Inc. announced a strategic collaboration to discover and develop novel, small molecule therapies across multiple targets.

This collaboration will utilize Genesis’ advanced AI platform, GEMS, to design and optimize molecules for targets chosen by GILD. The two companies will collaborate on early-stage research, with GILD holding exclusive rights to further develop and market any compounds that come from their joint efforts.

In the fiscal second quarter, which ended on June 30, 2024, GILD’s total revenues increased 5.4% year-over-year to $6.95 billion. The company reported operating income of $2.64 billion, indicating 58.8% growth from the prior-year quarter. GILD’s non-GAAP net income attributable came in at $2.52 billion, up 49.2% year-over-year, while its non-GAAP EPS grew 50% from the year-ago value to $2.01.

According to the full-year guidance, GILD forecasts product sales to range from $27.10 billion to $27.50 billion. The company also expects non-GAAP EPS to be between $3.60 and $3.90, an increase from the previous guidance of $6.85 to $7.25.

Analysts expect GILD’s revenue and EPS for the current year (ending December 2024) to be $27.73 billion and $3.79, respectively. For the fiscal year 2025, both its revenue and EPS are expected to grow by marginally and 91.5% from the prior year to $28.05 billion and $7.26, respectively.

Over the past six months, the stock has gained 39.3%, closing the last trading session at $90.22.

GILD’s strong fundamentals are reflected in its POWR Ratings. It has an overall rating of A, which equates to a Strong Buy in our proprietary rating system.

It has an A grade for Value and a B for Sentiment and Quality. The stock is ranked #4 in the Biotech industry. Click here to access the additional GILD ratings (Growth, Momentum, and Stability).

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GILD shares were trading at $91.26 per share on Wednesday afternoon, up $1.04 (+1.15%). Year-to-date, GILD has gained 16.28%, versus a 25.37% rise in the benchmark S&P 500 index during the same period.