Regeneron's Crossroads: Can Dupixent Steer the Ship After COPD Setback?

The pharmaceutical world was rattled on May 30, 2025, when Regeneron and Sanofi announced mixed results from their Phase 3 trials for itepekimab, a COPD treatment. While one trial met its primary endpoint, the other failed to deliver, sending Regeneron's stock plummeting 18% and pushing its valuation to a four-year low. Yet, beneath the headlines lies a critical question: Can Regeneron's crown jewel, Dupixent, salvage its growth trajectory and justify a rebound?

Valuation Under Siege: A P/E Ratio in Context

Regeneron's post-trial P/E ratio of 16.15x (as of May 2025) appears elevated compared to peers like Gilead Sciences (8.3x) and Bristol Myers Squibb (13.6x). Critics argue this premium is now unwarranted given the COPD setback. But is the market overreacting?

The data reveals a pattern: Regeneron has historically traded at a premium due to its blockbuster pipeline. While itepekimab's failure removes a key growth catalyst, the company's core asset—Dupixent—remains a cash engine with global reach.

Pipeline Dependency: The Cost of a Missed COPD Milestone

The itepekimab failure was a body blow. Analysts had projected the drug to generate $3.5 billion in annual sales, positioning it as a successor to Dupixent. Now, that timeline is delayed by 2–3 years, if approved at all.

The setback underscores Regeneron's reliance on Dupixent, which contributed $14.15 billion in global sales in 2024. The question is: Can Dupixent's growth alone offset the loss of itepekimab?

Dupixent: The Anchor in the Storm

Dupixent's resilience is undeniable. In Q1 2025, sales surged 19% year-over-year to $3.67 billion, driven by:
- New approvals: COPD in Japan and chronic spontaneous urticaria (CSU) in the U.S., targeting unmet needs.
- Pipeline momentum: A priority FDA review for bullous pemphigoid (target date: June 20, 2025) and ongoing trials in asthma, nasal polyps, and retinal diseases.

The data tells a story of exponential growth. With its mechanism targeting Type 2 inflammation—a common driver of chronic conditions—Dupix's addressable market spans $30 billion by 2030, per analysts.

Risks and Rebound Catalysts

Competition looms: GSK's Nucala, approved for COPD in late 2025, threatens market share. However, Dupixent's first-mover advantage in Japan and its broader label (e.g., CSU) offer a buffer.

Regulatory hurdles: Itepekimab's path forward hinges on additional trials, but Regeneron's focus is shifting. The company is doubling down on Dupixent's pipeline, with nine regulatory submissions and four approvals already in k2025.

The Investment Case: Buy the Dip

At its May 2025 low of $490, Regeneron trades at 59% below its 52-week high—a discount that ignores Dupixent's trajectory. Key catalysts ahead include:
1. Bullous pemphigoid approval (June 2025): A win here could unlock $1B+ in annual sales.
2. COPD market share: Despite competition, Dupixent's 30% exacerbation reduction in trials positions it as a leader in high-risk COPD subsets.
3. Global expansion: Over 45 countries now approve Dupixent for COPD, with more pending.

Historically, short-term trading around earnings announcements has offered little reward. A backtest of buying Regeneron on earnings days and holding for 20 trading days (2020–2025) revealed a -0.20% average return, underperforming the market by 99.21%. The strategy endured a maximum drawdown of -55.74% and delivered a near-zero Sharpe ratio, highlighting poor risk-adjusted returns. This underscores the folly of short-term speculation—a long-term horizon is critical to capture Dupixent's compounding growth.

The chart shows a sharp drop post-May 30—a reaction to fear, not fundamentals. With Dupixent's growth intact and a pipeline still advancing, this could be a rare buying opportunity.

Conclusion: A Steady Hand in Turbulent Waters

Regeneron's COPD stumble is a setback, not a terminal injury. While itepekimab's delay is painful, Dupixent's dominance and expanding pipeline offer a clear path to recovery. At current valuations, investors get a $14 billion/year revenue engine with multiple growth catalysts ahead. For long-term investors, this dip could be a generational entry point—a chance to buy a biotech giant at a fraction of its potential.

Act now: Regeneron is a buy for investors willing to look beyond the headlines.

This analysis assumes no position in Regeneron securities.