Itepekimab's Mixed Trials: Why the COPD Setback Doesn't Sink Sanofi and Regeneron's Respiratory Play

The recent mixed results from Sanofi (NASDAQ: SNY) and Regeneron's (NASDAQ: REGN) Phase 3 trials for itepekimab in COPD have created a paradox: a drug that succeeded in one trial but failed in another, yet still holds immense strategic value. While the discrepancy between the AERIFY-1 and AERIFY-2 trials has sparked debate, investors should look beyond the COPD outcome and focus on three critical factors: itepekimab's safety profile, its broader pipeline in other respiratory indications, and the institutional and analyst support it still commands. Here's why this drug remains a compelling cautious buy.

The COPD Trial Dilemma: Success in One, Failure in the Other

The AERIFY program's results are starkly split:
- AERIFY-1: Met its primary endpoint with a 27% reduction in COPD exacerbations at week 52, a statistically significant result that demonstrates itepekimab's efficacy in former smokers.
- AERIFY-2: Failed its primary endpoint, showing only 2–12% reductions at week 52 due to unexpectedly low exacerbation rates, likely linked to pandemic-era trial conditions that suppressed respiratory pathogen exposure.

The divergence isn't entirely surprising. Lower-than-anticipated exacerbation rates in AERIFY-2 reduced statistical power, making it harder to detect meaningful differences. Regeneron and Sanofi are now consulting regulators about next steps, which could include resubmitting AERIFY-1 data alone or designing a new trial to address the pandemic's impact.

But here's the key takeaway: itepekimab isn't dead—it's just constrained in COPD. The drug's safety profile remains clean, with adverse events mirroring placebo groups, and its failure in AERIFY-2 is more about trial design quirks than inherent ineffectiveness.

Regulatory Pathways: Narrowing the Focus Could Still Work

Regulators like the FDA or EMA might still greenlight itepekimab for a narrower COPD population, such as patients with biomarker-defined inflammation or excluding those affected by post-pandemic conditions. While this would limit peak sales, it could still carve out a $1–$2 billion annual revenue stream.

Meanwhile, the drug's broader pipeline offers far greater upside:
- Chronic Rhinosinusitis with Nasal Polyps (CRSwNP): Phase 3 trials (CEREN-1 and CEREN-2) are ongoing, with readouts expected in 2026. This is a $2.5B market with high unmet need, and itepekimab's mechanism targeting IL-33 could dominate.
- Bronchiectasis: A Phase 2 trial's 2026 readout could open another $500M+ market.

The COPD stumble is a speed bump, not a roadblock.

Institutional Activity: A Vote of Confidence Despite Volatility

While Regeneron's stock dipped ~5% on the mixed results, institutional investors are already positioning for the long game:
- Goldman Sachs and Two Sigma increased holdings by +77% and +2,297%, respectively, in Q1 2025.
- JPMorgan and Capital World Investors reduced stakes, but their moves likely reflect broader portfolio shifts rather than itepekimab-specific concerns.

Analysts remain bullish:
- Morgan Stanley keeps a Buy rating with a $958 price target, citing itepekimab's potential to generate $3.7B in 2033 sales if approved in COPD and other indications.
- BMO Capital sees upside to $903, emphasizing its unique mechanism targeting IL-33, a pathway no other COPD drug addresses.

Why a Cautious Buy? The 3 Pillars of Value

1. Safety First: Itepekimab's clean safety profile reduces regulatory and litigation risks compared to other biologics.
2. Pipeline Diversification: Even if COPD falters, the drug's potential in CRSwNP and bronchiectasis could create a $3B+ franchise.
3. Institutional Momentum: Buyers like Goldman Sachs aren't wrong—this is a high-risk, high-reward play with a clear catalyst in 2026 trials.

Risks to Consider

• Regulatory Hurdles: The FDA might demand more COPD data, delaying approval.
• Competitor Threats: Tezepelumab (AstraZeneca) and dupilumab (Sanofi/Regeneron) already dominate parts of the respiratory space.

Conclusion: The COPD Stumble Doesn't Sink the Ship

The AERIFY-2 failure is a setback, but itepekimab's broader promise in respiratory diseases—and its $850 median price target—make this a compelling cautious buy. Investors should focus on the 2026 milestones: positive data from CRSwNP and bronchiectasis trials could send shares soaring.

Action to Take:
- Buy REGN/SNY at current levels, with a stop-loss below $200 for REGN and $50 for SNY.
- Hold for 12–18 months, targeting the 2026 readouts as catalysts.

This is a drug—and a pipeline—worth betting on.

Disclaimer: Past performance does not guarantee future results. Consult your financial advisor before making investment decisions.