Regeneron Pharmaceuticals (REGN): Undervalued Innovator with Asymmetric Upside in 2025–2026

Regeneron Pharmaceuticals (REGN) stands at a pivotal inflection point in 2025, offering an asymmetric risk-reward profile for investors. Despite its status as a biotech innovator with a durable revenue engine and a maturing pipeline, the stock trades at a compelling valuation dislocation. With a forward P/E ratio of 14.53—well below the biotech sector average of 18–20—and a PEG ratio of 1.84–1.85, the market appears to underprice Regeneron’s near-term catalysts and long-term growth potential [1]. This dislocation, coupled with a robust pipeline and strategic event risk, positions REGN as a compelling asymmetric opportunity for 2025–2026.

Valuation Dislocation: A Mispriced Growth Story

Regeneron’s valuation metrics suggest a disconnect between its fundamentals and market expectations. While the forward P/E of 14.53 reflects a discount to peers, the company’s Price/Book (P/B) ratio of 1.97–2.00 and Enterprise Value/EBITDA (EV/EBITDA) of 9.77–9.92 indicate a balanced capital structure and operational efficiency [1]. Analysts argue that these metrics fail to capture the full value of Regeneron’s cash-generative flagship asset, Dupixent, or the upside potential of its late-stage pipeline.

The PEG ratio of 1.84–1.85, though elevated, reflects the market’s skepticism about sustaining Dupixent’s growth. However, this skepticism may be misplaced. Dupixent’s recent expansion into chronic obstructive pulmonary disease (COPD) and pediatric indications has unlocked new revenue streams, with global net sales surging 22% year-over-year to $4.34 billion in Q2 2025 [2]. Analysts project Dupixent to reach $5.1 billion in 2026 revenue, driven by broader COPD adoption and new formulation launches [3].

Durable Dupixent Growth: A Cash-Cow with Expansion Potential

Dupixent’s dominance in atopic dermatitis and asthma has cemented its role as a blockbuster, but its recent foray into COPD marks a transformative phase. Sanofi, Regeneron’s co-commercialization partner, reported €3.8 billion in Q2 2025 sales, with COPD contributing a significant portion of the 21.1% year-over-year growth [2]. The drug’s pediatric expansion and once-weekly formulation further reduce treatment barriers, enhancing market penetration.

Critically, Dupixent’s IP protection extends through 2034, providing a long runway for revenue growth. With biosimilar competition still years away, Regeneron and Sanofi can maintain pricing power while scaling into new indications. This durability underpins the argument that the forward P/E of 14.53 is a mispricing of a cash-flow engine with structural advantages.

Maturing Pipeline: Itepekimab and RNAi Catalysts

Regeneron’s pipeline is transitioning from early-stage promise to late-stage execution, with itepekimab and cemdisiran as key near-term catalysts.

• Itepekimab: The Phase 3 AERIFY-1 trial for COPD patients met its primary endpoint, showing a 27% reduction in moderate/severe exacerbations compared to placebo [4]. While AERIFY-2 fell short, early signals of benefit and the positive AERIFY-1 data have prompted Regeneron and Sanofi to engage regulators for a potential Biologics License Application (BLA) in 2026. A successful approval could generate $2–3 billion in annual revenue, given COPD’s high unmet need.
• RNAi Pipeline: The cemdisiran trial for generalized myasthenia gravis (gMG) delivered statistically significant improvements in patient function, with a subcutaneous dosing regimen every three months [5]. Regeneron plans to submit a U.S. regulatory application in Q1 2026, with a potential launch in 2027. The combination of cemdisiran and pozelimab (targeting complement activation) also represents a $1.5 billion peak sales opportunity, with a key milestone in Q1 2027 [6].

These advancements highlight Regeneron’s ability to transition from a single-product company to a diversified innovator, reducing reliance on Dupixent and enhancing long-term shareholder value.

Near-Term Event Risk: Morgan Stanley Presentation and Rating Upgrade Potential

Regeneron’s presentation at the Morgan Stanley 23rd Annual Global Healthcare Conference on September 8, 2025, offers a critical catalyst for re-rating. The event will provide clarity on the company’s strategic priorities, including the path forward for itepekimab and cemdisiran. Analysts note that Morgan Stanley’s Terence Flynn, who maintains a “Buy” rating with a $761 price target, has historically driven positive sentiment post-presentation [7].

The presentation could also address the mixed AERIFY-2 results, offering insights into regulatory strategies and market access plans. A favorable readout may prompt upgrades from other analysts, amplifying the stock’s upside. Given the current price of ~$650, a $761 target implies ~17% upside, while a successful pipeline approval could drive even greater returns.

Conclusion: Asymmetric Upside in a Mispriced Innovator

Regeneron Pharmaceuticals is a rare combination of a durable revenue stream, a maturing pipeline, and a valuation that underprices its near-term catalysts. The forward P/E of 14.53 reflects a discount to its growth potential, while Dupixent’s expansion and pipeline milestones offer asymmetric upside. With the Morgan Stanley presentation looming and a regulatory calendar rich with opportunities, investors are poised to capitalize on a dislocation that may not last.

For those seeking exposure to a biotech innovator with a clear path to value creation, Regeneron presents a compelling case in 2025–2026.

Source:
[1] Regeneron Pharmaceuticals, Inc. (REGN) Stock Price, News [https://finance.yahoo.com/quote/REGN/]
[2] Press Release: Q2: double-digit sales and solid business EPS growth [https://www.sanofi.com/en/media-room/press-releases/2025/2025-07-31-05-30-00-3124660]
[3] Dupixent sales spur Sanofi growth, but profits fall short [https://www.pharmaceutical-technology.com/news/dupixent-sales-spur-sanofi-growth-but-profits-fall-short/]
[4] Regeneron and Sanofi Announce Mixed Results from [https://www.nasdaq.com/articles/regeneron-and-sanofi-announce-mixed-results-phase-3-aerify-trials-itepekimab-copd-patients]
[5] Regeneron Announces Positive Results from Phase 3 Trial in Generalized Myasthenia Gravis [https://www.globenewswire.com/news-release/2025/08/26/3139144/0/en/Regeneron-Announces-Positive-Results-from-Phase-3-Trial-in-Generalized-Myasthenia-Gravis.html]
[6] Myasthenia Gravis Treatment: Marketed & Pipeline Therapies [https://www.delveinsight.com/blog/myasthenia-gravis-treatment-landscape]
[7] Morgan Stanley Maintains Regeneron Pharmaceuticals [https://news.futunn.com/en/post/61236383/morgan-stanley-maintains-regeneron-pharmaceuticals-regnus-with-buy-rating-maintains]