Regeneron ends year on a high note

Hopes for a second indication for vision loss treatment VEGF Trap-Eye is the icing on the Christmas cake for Regeneron Pharmaceuticals. The earlier-than-anticipated pivotal data, showing a significant improvement in vision in patients with a form of macular oedema, comes only a month after similarly encouraging results in macular degeneration (Dosing the jewel in VEGF Trap-Eye’s crown, November 22, 2010).

Despite the good news, Regeneron shares were little changed today, albeit trading at a nine-and-a-half year high of $33. To ignite further excitement the company needs to deliver positive data on its second late-stage hope, aflibercept, which should start to emerge next year. And with only topline results revealed so far on VEGF Trap-Eye, further detail here will make for crucial reading. Regeneron is approaching a market value of $3bn; to breach this amount next year must bring more good news.

Gaining vision

Regeneron announced today results from the Copernicus study, in 165 patients with macular oedema due to central retinal vein occlusion (CRVO). After six months, significantly more patients receiving VEGF Trap-Eye injections monthly gained at least 15 letters of vision from baseline, the primary endpoint of the study, while the secondary efficacy endpoint was also met.

The safety profile was also encouraging, with more serious ocular adverse events in the placebo group. A similar study being conducted by Bayer, called Galileo, should report results in mid-2011.

Meanwhile the companies also revealed follow-up data from a phase II trial in diabetic macular oedema (DME). Previously, 24 week data had been released; improvements in vision were maintained or improved up to completion of the study at week 52 in all VEGF Trap-Eye study groups, the companies said. Phase III trials are now being planned.

Although these two settings are not expected to be as large as the age-related macular degeneration (AMD) indication, the evidence of efficacy is encouraging. Analysts are already forecasting worldwide sales of $818m by 2016 for the two companies.

Full data from the Copernicus study and the two trials reported in AMD, called View, will be revealed in February at a conference. A number of issues around the drug still need clarification, primarily further detail on safety. So far, the company has only described side effects as “balanced” or “similar” to placebo.

New potential

Meanwhile, a host of pivotal data is due next year from aflibercept, a higher dose version of VEGF Trap-Eye, this time partnered with Sanofi-Aventis. Phase III studies in non-small cell lung cancer and colon cancer will report out next year, as well as interim phase III data in prostate cancer.

Analysts are not yet attaching as much value to this agent; those tracking Sanofi are pencilling in sales of $393m by 2016. But as a “me-too” Avastin, albeit targeting the VEGF pathway through kinase inhibition rather than an antibody approach, the potential is clear.

The View data in AMD last month prompted a host of analyst price target upgrades - RBS upped to $30 from $25, Bank of America/Merrill Lynch upped to $36 from $33, whilst Needham moved from $34 to $39.

With the share price already passing or approaching some of these recommendations, regulatory and commercial success with VEGF Trap-Eye has largely been priced in, so it is hard to see how much higher Regeneron shares can go without positive news on aflibercept.