Regeneron Shares Face Volatility Following FDA Decision Delay

Regeneron Pharmaceuticals investors are experiencing significant volatility this week. After posting gains exceeding 3% yesterday, the company’s shares have reversed course to trade in negative territory. This sharp swing stems from an unexpected announcement by the U.S. Food and Drug Administration (FDA) to postpone its verdict on two approval applications for the eye treatment Eylea HD.

Regulatory Timeline Shifted to Final Quarter

The FDA has classified new information arising from a recent inspection at third-party manufacturer Catalent Indiana LLC as a “major amendment,” representing a substantial change to the application materials. While not entirely unforeseen—new operator Novo Nordisk submitted a comprehensive response to the agency’s concerns in early August—the rescheduling of the decision deadlines has nonetheless injected uncertainty into the market.

This development is particularly notable because the clarity provided by Novo Nordisk’s response was a key driver behind yesterday’s share price rally. Some market analysts, including those from BMO Capital Markets, had even characterized the new fourth-quarter timeline as “sooner than anticipated.” However, that initial wave of optimism appears to have quickly dissipated among traders.

Mounting Challenges for Eylea Franchise

The Eylea franchise is already confronting considerable market pressure. Second-quarter sales plummeted by 25% year-over-year, although the $1.15 billion in revenue still managed to surpass analyst expectations. This decline is largely attributed to the increasing competition from biosimilars, such as Biocon Biologics’ Yesafili, which are gaining traction in the U.S. market and eroding brand dominance.

Should investors sell immediately? Or is it worth buying Regeneron?

Despite these sector-specific headwinds, Regeneron’s overall business foundation remains solid. Total quarterly revenue grew by 4% to reach $3.68 billion. The company continues to demonstrate strong long-term performance, consistently posting double-digit growth in both sales and profit.

Analyst Sentiment Turns Cautious

The stock’s significant decline of over 50% within the past year reflects persistent investor apprehension. This cautious sentiment is echoed by recent analyst actions. Wells Fargo recently downgraded Regeneron from “Overweight” to “Equal Weight,” establishing a price target of $580. Similarly, Argus Research reduced its rating from “Buy” to “Hold” back in June.

The critical question for investors is whether Regeneron can successfully navigate the Eylea HD regulatory challenge and once again exceed market expectations. A definitive answer is expected in the fourth quarter, when the FDA finally delivers its decision.