Regeneron Pharmaceuticals (REGN): Can Dupixent's Growth Offset Eylea Erosion and Drive Long-Term Earnings Resilience?

In the dynamic world of biopharma, few companies have mastered the art of balancing blockbuster growth with strategic innovation as effectively as Regeneron Pharmaceuticals (REGN). As the July 19, 2025, earnings calendar looms for its Q2 2025 report, investors are fixated on whether Dupixent's meteoric rise can counterbalance the headwinds facing Eylea and whether Libtayo's oncology expansion will cement Regeneron's long-term earnings resilience. This analysis unpacks the interplay between these three pillars of Regeneron's portfolio and assesses the stock's potential to deliver alpha in a competitive landscape.

Dupixent: The Engine of Expansion and Earnings

Dupixent's dominance in atopic dermatitis and asthma is no longer a question of if but how much. With a 73.3% revenue share in the U.S. atopic dermatitis market in 2024 and a Zacks Consensus Estimate of $4.2 billion in Q2 2025 sales, Dupixent's growth trajectory is underpinned by a masterstroke of label expansions and therapeutic versatility. The recent approval for pediatric atopic dermatitis (November 2024) and bullous pemphigoid (June 2025) has expanded its addressable market by 5% and 0.27%, respectively, while its COPD indication (September 2024) taps into a $30 billion respiratory disease market.

The drug's subcutaneous administration and favorable safety profile over corticosteroids have entrenched it as a first-line biologic, with the U.S. atopic dermatitis market projected to grow at a 5.47% CAGR to $16.82 billion by 2033. Dupixent's 2024 global sales of $14.9 billion—80% from the U.S.—highlight its role as a cash cow, but its true value lies in its pipeline. With trials underway for eosinophilic esophagitis and chronic urticaria, Dupixent's peak sales potential of $20 billion is not a stretch.

Eylea: A Franchise in Peril, but Not Yet in Peril

Eylea's challenges are well-documented. U.S. sales declined 26% in Q1 2025 as Roche's Vabysmo and biosimilars chipped away at market share. Yet, Regeneron's pivot to Eylea HD—a higher-dose formulation with extended dosing intervals—has injected new life into the franchise. Eylea HD's 54% sales surge in Q1 2025 and Zacks' $1 billion Q2 2025 estimate suggest that the innovation is resonating, particularly with treatment-naïve patients.

However, the broader Eylea ecosystem remains fragile. Vabysmo's 50% new patient share in Q2 2025 and Roche's prefilled syringe version (launched July 2024) pose logistical and administrative advantages. Meanwhile, Medicare Advantage plan restrictions and prior authorization hurdles continue to erode access. For Eylea HD to truly offset the original Eylea's decline, Regeneron must secure FDA approval for its extended 16-week dosing in retinal vein occlusion by August 19, 2025—a critical inflection point.

Libtayo: A New Frontier in Oncology Diversification

Regeneron's oncology ambitions are increasingly tied to Libtayo, its PD-1 inhibitor. The C-POST trial's 68% reduction in disease recurrence for high-risk cutaneous squamous cell carcinoma (CSCC) post-surgery has positioned Libtayo as a potential adjuvant standard of care. With 10,000 U.S. patients at risk of recurrence and a global CSCC market projected to grow at 7.24% CAGR to $14.68 billion by 2025, Libtayo's approval in this indication could unlock $2.6 billion in sales by 2031.

The drug's existing $1.22 billion 2024 sales (Q1 2025: $285M) reflect its strength in advanced CSCC, but adjuvant use represents a 10x revenue leap. Regeneron's $7 billion manufacturing expansion in New York and North Carolina further underscores its commitment to scaling Libtayo's commercial footprint. While competition in the oncology space is fierce, Libtayo's first-in-class adjuvant data and broad PD-L1 expression efficacy provide a durable moat.

Earnings Resilience and Strategic Momentum

Regeneron's earnings resilience hinges on its ability to monetize innovation while mitigating Eylea's erosion. Dupixent's $4.2 billion Q2 2025 estimate and Libtayo's $2.6 billion 2031 forecast suggest that the company is diversifying risk effectively. However, the path to $20 billion peak sales for Dupixent requires continued label expansions and pricing stability—both of which are under threat from payers and biosimilars.

The Q2 2025 earnings report, due August 1, 2025, will be pivotal. A beat on Eylea HD's $1 billion estimate and positive data on Libtayo's adjuvant CSCC approval timeline could reignite investor confidence. Conversely, a miss on Eylea HD or delays in regulatory milestones could reignite skepticism.

Investment Thesis and Outlook

Regeneron's stock has historically traded at a premium to peers due to its blockbuster portfolio and R&D prowess. At a forward P/E of 28x and a P/S of 12x, the stock appears fairly valued but offers upside if Dupixent's growth outpaces expectations. The key risks include:
- Eylea's continued erosion despite Eylea HD
- Regulatory delays for Libtayo's adjuvant CSCC indication
- Pricing pressures from Medicare and biosimilars

For long-term investors, Regeneron's pipeline depth and strategic focus on high-growth indications (e.g., respiratory diseases, oncology) justify a bullish stance. However, near-term volatility is likely as the market weighs the balance between Dupixent's momentum and Eylea's fragility.

Final Verdict: Buy for a 12–18-month horizon, with a target price of $850 (median of analyst estimates). Investors should monitor the Q2 2025 report and Libtayo's regulatory timeline closely.

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