(REGN) Regeneron Pharmaceuticals Wins Unanious FDA Panel Approval

Recently, the Dermatologic and Ophthalmic Advisory Committee of the US Food and Drug Administration (FDA) issued a positive opinion and unanimously recommended the US approval of Regeneron Pharmaceuticals Inc.’s (REGN) eye treatment VEGF (vascular endothelial growth factor) trap-eye (proposed trade name: Eylea).

The panel recommended the clearance of the candidate in the US for treating patients suffering from the neovascular form of age-related macular degeneration (wet AMD). A decision from the FDA is expected by August 20, 2011 (target date). Although the FDA is not bound to accept the recommendation of the advisory committee, it usually does so.

We remind investors that Regeneron submitted a biologics license application (BLA) to the FDA seeking marketing approval of the drug for the wet AMD indication in February 2011. The BLA was based on positive results from the VIEW program (VEGF Trap-Eye: Investigation of Efficacy and Safety in Wet AMD) which consisted of two studies, VIEW 1 and VIEW 2.

The studies evaluated the efficacy of VEGF trap-eye versus Roche/Novartis’ (RHHBY/NVS) Lucentis (ranibizumab), an anti-angiogenic agent approved for treating wet AMD. Regeneron’s eye treatment was found to be non-inferior to Lucentis.

At the time of submitting the application, Regeneron requested the FDA to review it on a priority basis which would mean a six-month review period as against the usual ten months. The FDA granted the request in April 2011. We note that the US regulatory authority generally reviews those drugs on a priority basis which offer major advances in treating diseases having no adequate therapy.

The European approval of the candidate for the same indication is also on track with partner Bayer (BAYRY) filing an application with the European regulatory body for marketing the drug in the European Union (EU).

Bayer is responsible for marketing VEGF trap-eye in ex-US markets on approval. The profit emanating from the sales of the candidate in those markets will be shared equally by the companies.  However, the entire US rights pertaining to VEGF trap-eye lie with Regeneron. We note that VEGF trap-eye, which is also being studied for other eye-disorders, represents significant commercial potential for the companies.

Our Recommendation

Currently, we have a Neutral stance on Regeneron in the long run. The company carries a Zacks #3 Rank (Hold rating) in the short run.

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