Regeneron Pharmaceuticals (REGN  – Free Report) shares have been on an odyssey in the past year, soaring from $360 last April up to $540 by June and then entering their own private bear market since last autumn to dip below $320 this year.

But with EPS estimates rising since January, the stock became a Zacks #1 Rank Strong Buy again last month and savvy Biotech investors are thinking they be witnessing the start of an important bottom in shares below $350.

Full-year 2018 profit projections have risen 11% from $16.82 to $18.67, representing 14.4% growth this year.

And next year’s estimates rose 6.4% from $20.29 to $21.58, representing a 15.6% advance.

At $350 this puts the forward P/E multiple at around 17.5 times, using $20 EPS.

Revenue growth is also expected to be solid with this year’s mark of $6.44 billion pushing 9.6% ahead of 2017 and 2019 looking for a nearly 11% advance to $7.14 billion.

With a $41 billion market cap, this puts the price-to-sales ratio around 6 times, which is not unreasonable for a mature big cap Biotech with mid-teens growth.

And that growth is expected to carry the company toward adjusted EPS of $26 in 2020.

Key Growth Franchises

Regeneron’s fourth-quarter results, reported on February 8, were impressive as both earnings and sales beat estimates driven by strong performance of eye-care drug Eylea.

Eylea (aflibercept) can treat age-related macular degeneration (AMD), diabetic macular edema (DME), diabetic retinopathy (DR), and macular edema following retinal vein occlusion (RVO).

Total revenues in the fourth quarter increased 29% year over year to $1.6 billion on the back of Eylea sales. Revenues surpassed the Zacks Consensus Estimate of $1.5 billion.

Regeneron’s Q4 profit consensus called for EPS of $4.68 and the company delivered $5.23, for an 11.75% beat and a 72% increase over the year-ago quarter.

Eylea net sales increased 14% year over year to $975 million in the US and should continue to remain the key growth driver contributing significantly to REGN’s top line.

Regeneron has co-developed Eylea with the HealthCare unit of Bayer AG. The company is solely responsible for the sales of the eye drug and is entitled to the profits in the United States. However, it shares profits and losses equally with Bayer from ex-US Eylea sales, except in Japan, where the company receives a royalty on net sales.

Here is the global vs US breakdown for Eylea sales from the company press release…

  • Fourth quarter 2017 EYLEA® (aflibercept) Injection U.S. net sales increased 14% to $975 million versus fourth quarter 2016 and full year 2017 EYLEA U.S. net sales increased 11% to $3.70 billion versus full year 2016
  • Fourth quarter 2017 EYLEA global net sales(1) increased 19% to $1.61 billion versus fourth quarter 2016 and full year 2017 EYLEA global net sales(1) increased 14% to $5.93 billion versus full year 2016
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