Regeneron Faces Second FDA Rejection, Analysts Remain Bullish Despite Undervaluation

Regeneron Pharmaceuticals' lymphoma therapy, odronextamab, has been rejected by the FDA for the second time due to facility issues. Despite the setback, analysts remain optimistic about the stock, with an average target price suggesting a 33.62% upside. GuruFocus metrics indicate that Regeneron is undervalued, with estimates showing potential for a 60.55% increase.

Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) has faced a significant setback with its lymphoma therapy, odronextamab, as the U.S. Food and Drug Administration (FDA) declined to approve the drug for the second time. The company disclosed this information in its Q2 2025 financials, noting that the FDA sent a complete response letter (CRL) regarding its Biologics License Application (BLA) following issues found during an inspection at a production site run by Catalent, which was recently acquired by Novo Nordisk (NVO). The CRL related to the bispecific antibody's potential use as a late-line option for relapsed/refractory follicular lymphoma.

This decision marks the second time the FDA has declined to approve odronextamab. In March 2024, the FDA initially declined approval due to concerns over enrollment status for the drug's confirmatory trials. Despite this, analysts remain optimistic about Regeneron's stock, with an average target price suggesting a 33.62% upside [2].

GuruFocus metrics indicate that Regeneron is undervalued, with estimates showing potential for a 60.55% increase. The company's stock has experienced a decrease of approximately 1.64% over the past year, translating to a drop of $9.12, but the current price still holds promise for growth. Regeneron's financial metrics provide investors with a mixed bag of insights, with a market capitalization of $60.8 billion, a forward P/E ratio of 14.25, and a return on equity of 15.96% [2].

Regeneron's revenue growth has dipped by 3.70% in Q2 2025, but the company's earnings per share (EPS) of 39.36 and a return on equity of 15.96% reflect solid profitability and operational efficiency. The company's strong financial health is underscored by a substantial free cash flow of over $2 billion, allowing it to sustain operations and fund future growth [2].

Despite the setback with odronextamab, Regeneron continues to push the boundaries of medical science. The company received FDA approval for multiple treatments and in-licensed rights for a late-stage drug candidate in Q2 2025, including Lynozyfic™ (linvoseltamab) for treating relapsed or refractory multiple myeloma and Dupixent for bullous pemphigoid and chronic spontaneous urticaria (CSU) [3, 4].

Regeneron's success is driven by its diverse product lineup and strategic collaborations. The company's flagship treatments, including EYLEA for eye diseases and Dupixent for atopic dermatitis and asthma, have been instrumental in maintaining its market leadership. Partnerships with entities like Mammoth Biosciences and Sonoma Biotherapeutics exemplify Regeneron's commitment to harnessing cutting-edge technologies to address unmet medical needs [2].

As Regeneron continues to navigate the regulatory landscape and push the boundaries of medical science, its trajectory remains a subject of keen interest within the investment community. Analysts' bullish sentiment, supported by a wide target price range of $504.00 to $940.00, highlights the potential for long-term investment prospects [2].

References:
[1] https://seekingalpha.com/news/4476790-regeneron-lymphoma-therapy-rejected-fda
[2] https://www.directorstalkinterviews.com/regeneron-pharmaceuticals-inc-regn-stock-analysis-investor-insights-on-a-biotech-giant-with-28-potential-upside/4121209554
[3] https://site.financialmodelingprep.com/market-news/regeneron-pharmaceuticals-q2-2025-financial-highlights-stock-update
[4] https://newsroom.regeneron.com/news-releases/news-release-details/regeneron-reports-second-quarter-2025-financial-and-operating