The Erosion of Regeneron's Eylea Franchise: A Tipping Point for Retinal Drug Market Share and Investor Returns?

The retinal drug market, once dominated by Regeneron Pharmaceuticals' Eylea (aflibercept), is undergoing a seismic shift. For years, Eylea has been the gold standard for treating conditions like wet age-related macular degeneration (wAMD) and diabetic macular edema (DME). But a confluence of factors—off-label competition from Avastin, manufacturing setbacks for Eylea HD, and the rise of Roche's Vabysmo—is testing the durability of Regeneron's franchise. For investors, the question is no longer whether Eylea's dominance is waning, but how quickly this erosion will translate into meaningful losses for the company's bottom line and stock price.

The Off-Label Threat: Avastin's Cost-Driven Resilience

Eylea's market share has always been challenged by the off-label use of Avastin (bevacizumab), a cancer drug repurposed for ophthalmic use. At a fraction of Eylea's cost, Avastin has historically accounted for roughly one-third of U.S. wet AMD treatments. However, recent trends suggest this share is growing. In 2025, Regeneron reported a 39% decline in non-HD Eylea sales, directly attributing the drop to “patient affordability constraints” and “loss of market share to compounded bevacizumab.”

The catalyst? A perfect storm of regulatory and financial pressures. In October 2024, Pine Pharmaceuticals—the largest supplier of repackaged Avastin—halted production, creating a temporary shortage. While this initially forced providers to seek alternatives, the vacuum was quickly filled by biosimilars and a renewed push for Eylea HD. Yet, the long-term threat remains. The FDA's tentative approval of bevacizumab-vikg (a biosimilar) could further complicate access to compounded Avastin, though the regulatory gray area around “essentially a copy” leaves room for legal challenges. For now, Avastin's affordability and entrenched use in clinical practice ensure it remains a structural headwind for Eylea.

Manufacturing Setbacks: Eylea HD's Stumbling Blocks

Regeneron's attempt to revitalize the Eylea franchise with its high-dose (HD) version has been hampered by repeated manufacturing issues. The company's fill-finish partner, Novo Nordisk, has faced FDA scrutiny since 2022, with a 2024 inspection uncovering “procedural” problems at its Bloomington, Indiana facility. These issues have delayed approvals for Eylea HD's prefilled syringe format and extended dosing applications. In Q1 2025, the FDA rejected the prefilled syringe application due to a third-party component issue, a blow that Regeneron CEO Len Schleifer called “a critical component of the product's evolution.”

While Eylea HD sales grew 54% year-over-year to $307 million in Q1 2025, this growth has not offset the broader franchise decline. The prefilled syringe format is crucial for competing with Roche's Vabysmo, which already offers a user-friendly, ready-to-administer version. Without timely regulatory clearance, Eylea HD's ability to regain market share is compromised.

The Vabysmo Challenge: A New Standard of Care?

Roche's Vabysmo (faricimab) has emerged as the most formidable threat to Eylea. Approved in 2022, Vabysmo's bispecific mechanism—targeting both VEGF and angiopoietin-2—offers extended dosing intervals (up to 16 weeks post-induction), a key differentiator in a market where patient compliance and convenience matter. In Q1 2025, Vabysmo generated $1.2 billion in sales, a 18% year-over-year increase, with analysts forecasting $7.7 billion in sales by 2030.

Vabysmo's prefilled syringe format, approved in July 2024, further cements its competitive edge. Regeneron's Eylea HD, which still relies on manual preparation, lags in this critical area. While Schleifer remains optimistic about Eylea HD's long-term potential, the immediate reality is that Vabysmo is capturing market share with a product that aligns with the evolving preferences of both physicians and patients.

Investment Implications: A Franchise in Transition

The structural decline in Eylea's dominance raises urgent questions for investors. While Eylea HD's potential and the company's robust R&D pipeline offer long-term hope, the near-term outlook is clouded by regulatory delays, competitive pressures, and affordability-driven patient shifts.

For conservative investors, the risks are clear. Regeneron's retinal franchise, which generated $1.04 billion in Q1 2025—a 26% decline from the prior year—may struggle to regain traction unless manufacturing issues are resolved swiftly. Meanwhile, Vabysmo's momentum and Avastin's cost advantage suggest the market is shifting toward alternatives that Eylea HD alone may not counteract.

For more aggressive investors, however, the situation presents a buying opportunity. Regeneron's stock is trading at a discount to its historical valuation multiples, reflecting the current challenges rather than its long-term potential. If the company secures FDA approval for the prefilled syringe version of Eylea HD by mid-2025 and demonstrates durable clinical data, the stock could rebound. Additionally, the permanent J-code for Eylea HD—a regulatory win that could streamline reimbursement—offers a catalyst for near-term stabilization.

Conclusion: A Tipping Point, Not a Collapse

Regeneron's Eylea franchise is at a crossroads. The erosion of its market share is not a sudden collapse but a structural shift driven by affordability, innovation, and regulatory hurdles. For investors, the key is to balance the near-term risks with the long-term potential of Eylea HD and Regeneron's broader pipeline. Those willing to navigate the volatility may find value in a company that still commands respect in the biotech sector—even as it faces its most formidable challenges yet.

In the end, the retinal drug market is evolving. The question for Regeneron is whether it can adapt fast enough to retain its crown—or if the throne will pass to Vabysmo and the off-label Avastin that continues to defy the rules.