Regeneron stock crashed Friday after the company's Sanofi-partnered COPD treatment unexpectedly failed in a Phase 3 study, likely limiting the companies' ability to file for approval.
Shares of Regeneron Pharmaceuticals tumbled 19% to 490.28, while Sanofi stock shed more 5.7%, closing at 49.37. Regeneron shares hit their lowest point since May 2021.
The companies ran two studies of their drug, itepekimab, in patients with a progressive lung disease called chronic obstructive pulmonary disease, or COPD.
Researchers tested two doses of itepekimab. In one study, patients had a 21% to 27% reduction in exacerbates, based on the dose, after a year. Exacerbations are when the symptoms of COPD get worse for brief periods of time. That met the 25% bar for meaningfulness, RBC Capital Markets analyst Brian Abrahams said. But the other study was a flop. Patients "showed almost no benefit by week 52," he said.
"We believe the results reflect inherent challenges surrounding COPD studies, including the disease's severity and heterogeneity," he said in a client note.
Another Phase 3 Study?
To win Food and Drug Administration approval Regeneron and Sanofi will likely have to run another Phase 3 study, Abrahams said. And that could prove futile.
"If REGN and SNY are able to identify clear reasons for the divergent results, this may help the probability of success for a third ph. III," he said. "But there would still be risk, it would add years to the development program, and hints of waning effects for the drug over time across both studies may further reduce the likelihood of success from another ph. III and also reduce commercial enthusiasm if it eventually reached the market."
He kept his outperform rating on Regeneron stock.
Follow Allison Gatlin on X/Twitter at @AGatlin_IBD.
