Regeneron Pharmaceuticals (REGN): Assessing RBC's Price Target Hike Amid Dupixent Momentum and Biosimilar Risks

In October 2025, RBC Capital Markets raised its price target for Regeneron Pharmaceuticals (REGN) to $704, a move that underscores both optimism and caution in the biotech giant's trajectory. This adjustment hinges on the continued dominance of Dupixent, Regeneron's flagship drug, and the looming threat of biosimilars. To evaluate the feasibility of this target, investors must weigh Dupixent's robust performance against near-term uncertainties, including competitive pressures and regulatory risks.

Dupixent's Growth: A Double-Edged Sword

Dupixent, a best-in-class biologic for atopic dermatitis and asthma, has been a cash cow for Regeneron. According to Investing.com, RBC highlighted that Dupixent's sales are projected to reach $4.73 billion in 2025-surpassing the consensus estimate of $4.59 billion. This growth is driven by expanding indications, including its recent approval for chronic obstructive pulmonary disease (COPD), which broadens its addressable market. However, the drug's success has also attracted scrutiny. Biosimilars, such as Formycon AG's Eylea biosimilar, pose a tangible threat, with a U.S. launch expected by Q4 2026, a timeline noted in the Investing.com coverage. While RBC acknowledges this risk, it stops short of quantifying its potential revenue impact, leaving investors to speculate on the magnitude of erosion.

Valuation Metrics: Reasonable or Undervalued?

Regeneron's current valuation appears attractive relative to its peers. As of Q3 2025, the company trades at a P/E ratio of 14.57 and a P/S ratio of 4.6, according to MarketBeat, metrics that align with historical averages but lag behind the industry's Q2 2025 P/E of 50.12 per CSIMarket. This discrepancy suggests that while Regeneron's fundamentals are solid-bolstered by a 31.37% net margin and a debt-to-equity ratio of 0.09, per GuruFocus-its valuation may not fully reflect its long-term potential. Analysts have set a broader range of price targets, with Jefferies Financial Group recently projecting $831 per share, indicating that RBC's $704 target is conservative.

Near-Term Risks: Beyond Biosimilars

While biosimilars dominate the risk narrative, other challenges loom. Regulatory scrutiny of Dupixent's lifecycle management-such as the need for new indications or formulations-remains a wildcard. RBC explicitly stated that "further clarity on Dupixent's lifecycle management or strategic business developments will be necessary to drive meaningful stock movement," a point highlighted in the Investing.com piece. Additionally, Regeneron's Q3 2025 results revealed a non-GAAP EPS decline of 12% to $11.83, attributed to a $0.68-per-share charge from an acquired in-process research and development (IPR&D) project, according to TradingView. This highlights the volatility inherent in biotech R&D pipelines, where unanticipated costs can dampen short-term performance.

The Path Forward: Balancing Optimism and Prudence

For RBC's $704 price target to materialize, Regeneron must navigate a delicate balancing act. On one hand, Dupixent's expansion into COPD and potential new indications could sustain revenue growth. On the other, biosimilar competition and regulatory headwinds could temper expectations. Investors should monitor two key metrics: (1) the pace of Dupixent's market penetration in new indications and (2) the timeline for biosimilar approvals. A delay in Formycon's Eylea biosimilar, for instance, could buy Regeneron time to solidify its market position.

In the broader context, Regeneron's valuation appears undervalued relative to its peers, particularly given its strong cash flow and low leverage. However, the $704 target may only be achievable if the company executes on its strategic initiatives without major setbacks. For now, the "Moderate Buy" consensus among analysts, according to MarketBeat, reflects a cautious optimism-a sentiment that aligns with RBC's tempered outlook.

Conclusion

RBC's price target hike for Regeneron Pharmaceuticals reflects confidence in Dupixent's enduring value but also underscores the fragility of its long-term growth story. While the stock's valuation metrics suggest upside potential, near-term risks-including biosimilar competition and regulatory uncertainties-demand vigilance. Investors who are bullish on Regeneron's ability to innovate and defend its market share may find the $704 target achievable, but those prioritizing stability might prefer to wait for clearer signals from the company's pipeline and competitive landscape.