Mid 2025 Deep Dive On Regeneron Pharmaceuticals (REGN)
Parsing the bull and bear cases for Regeneron—what played out, what didn’t, and where the story stands now.
When I spoke about Regeneron ($REGN) to a friend—an investor I respect deeply—his reply wasn’t just polite interest. He sent me a 70-page professional-grade research report. The message was clear: "If you’re serious about this name, study this." I did. This deep dive is my response to this research report.
At its core, the report makes a bullish case: Regeneron is undervalued, underappreciated, and entering the next phase of its growth story. Its current valuation (≈13× forward earnings) doesn’t reflect the strength of its cash flows, the durability of its flagship immunology drug (Dupixent), or the size of the upside embedded in its late-stage pipeline. The authors believed REGN has 40% upside from here—with a bull case stretching as high as 70%.
But this isn’t just a momentum play or a "story stock." The bear case gets a full airing too. The company’s leading ophthalmology product (Eylea) is facing a slow-motion patent cliff. Competition is rising across its portfolio. And any stumbles in the pipeline—especially Dupixent's COPD data or its new oncology entrants—could capsize the growth narrative.
This piece walks through both sides of that thesis, with an eye to what’s already priced in, what still needs to go right, and how much risk remains if it doesn’t. I’ll explain where the upside could come from, how durable the existing business really is, and why the stock’s risk-reward profile may look better today than it did even a year ago.
As an uncovered option seller, I’m always looking at risk and downside first. That means studying the bear thesis before even thinking about upside. Many times when I’m selling volatility, I don’t care of the stock does well, especially in the short term. I just need to make sure it won’t fall of a cliff in the next 45-60 days. Let’s get into it and look at the report’s bear thesis:
Bear Thesis: What Was Supposed to Go Wrong — and What Actually Did
The bear case for Regeneron outlined five major risks. Some of them came true. Some didn’t. A few ended up flipping into outright positives. Here’s a breakdown of what was predicted, and where things actually stand.
1. Eylea Patent Cliff
Prediction: Regeneron’s flagship eye drug would face early biosimilar competition. The base case assumed a ~60% collapse in U.S. sales by 2026.
Reality: That cliff arrived early. Amgen launched its biosimilar in late 2024 after Regeneron lost a key injunction, and another biosimilar is set to follow in 2026. Sales have already taken a hit: standard-dose U.S. Eylea revenue fell 39% year-over-year in Q1 2025. High-dose Eylea is helping cushion the blow, but not enough to offset it entirely. The decline is happening fast — and mostly in line with the bear thesis. The key difference? This wasn’t a surprise. Investors saw it coming. Much of that downside now looks “priced in.”
2. Dupixent in COPD
Prediction: The expansion into chronic obstructive pulmonary disease (COPD) would flop — either on weak data or safety concerns — wiping out billions in future sales.
Reality: This one flipped completely. Dupixent became the first biologic ever approved for COPD in 2024. The data were strong, the label was clean, and the commercial potential is big. Analysts now expect ~$3.5 billion in new annual revenue from COPD alone. Instead of shrinking, Dupixent’s growth story got stronger. This removed a massive piece of the bear case.
3. New Competition in Atopic Dermatitis
Prediction: Lilly’s lebrikizumab would eat into Dupixent’s lead in eczema, pulling growth down to single digits by 2025.
Reality: Lebrikizumab is on the market (as Ebglyss), but it hasn’t moved the needle much. Dupixent still dominates and is growing at nearly 20% year-over-year. Ebglyss has a more convenient dosing schedule, and might slowly gain share, but it’s not disrupting the franchise. The bear case overestimated the competitive threat — at least so far.
4. Odronextamab Setback
Prediction: Odronextamab, Regeneron’s bispecific antibody for lymphoma, would get delayed or derailed — giving competitors like Roche and AbbVie a head start.
Reality: This one hit. The FDA rejected odronextamab’s initial application in 2024, citing the need for more data. Rivals are already on the market, and doctors are gaining comfort with those options. Regeneron is now playing catch-up. Approval is still possible (the drug is already approved in Europe), but the commercial window has narrowed. This leg of the bear thesis has largely played out.
5. Fianlimab Failure in Melanoma
Prediction: Regeneron’s LAG-3 antibody combo with Libtayo wouldn’t work — removing a key potential growth driver in melanoma.
Reality: Still TBD. Early data looked strong. But the Phase 3 readout has slipped into the back half of 2025, and the competitive field has moved forward. Even if the combo works, Regeneron will be a late entrant. So while there’s no evidence of failure, the best-case scenario is now a smaller piece of the pie. The risk is still live, but diminished.
Bull Thesis: What Was Supposed to Go Right And Where We Stand Now
When I first got handed this report, the bullish thesis for Regeneron was a classic multi-engine growth story. Dupixent would keep expanding into new indications. Eylea would decline, but gently. A deep pipeline would begin delivering. There was even a hope that a new class of assets — bispecifics, RNAi combos, LAG-3 immunotherapy — might each contribute hundreds of millions in new revenue.
Some of that has happened. Some hasn’t. Here’s a breakdown of what the bull case was at the time, and where things stand today, mid-2025.
Dupixent Expands into COPD — and It Works
Prediction: If Dupixent could replicate its success in asthma and eczema in COPD — a much larger, underserved market — it could easily add $3 billion in new revenue. That would extend its growth runway into the next decade, making it the most successful IL-4/IL-13 drug in history.
Reality: This is one of the cleanest wins for the bull case. In late 2024, the FDA approved Dupixent for COPD with type 2 inflammation — the first biologic ever approved for the condition. This wasn’t a token win either. The Phase 3 data was strong: a 30% reduction in exacerbations, good tolerability, and no black-box warnings.
Commercial uptake is early, but it’s happening. Pulmonologists have been slower to adopt biologics than dermatologists or allergists, but that’s changing. And unlike prior Dupixent launches, there’s almost no direct competition here. If sales follow the same curve as in asthma, this becomes a major new leg for the franchise.
Verdict: Core part of the bull thesis — and now confirmed. Execution is still key, but the thesis was right. This is the reason to consider a new position in Regeneron.
High-Dose Eylea Cushions the Patent Cliff — Or Not
Prediction: Regeneron would steer through the patent expiry on Eylea by pushing adoption of its new high-dose formulation. The base case assumed biosimilars wouldn’t launch until 2027 and that the company could retain much of its ~$5.9B U.S. Eylea business with less price pressure.
Reality: That didn’t play out. Amgen’s biosimilar launched in 2024 after Regeneron failed to block it in court. Another biosimilar is likely coming in 2026. Meanwhile, Q1 2025 data shows standard-dose U.S. Eylea revenue down 39% year-over-year. High-dose adoption has been slower than hoped — and not enough to offset the base erosion.
Investors knew this was coming, so some of the pain is already priced in. But it doesn’t change the fact that Eylea is now a shrinking asset, not a stabilizer.
Verdict: This leg of the bull case broke. Eylea is no longer a bridge to new growth — it’s a headwind.
Odronextamab and the Bispecifics Franchise
Prediction: Odronextamab — Regeneron’s CD20xCD3 bispecific antibody — would emerge as best-in-class for B-cell lymphomas. Approval in FL and DLBCL would unlock a $1B+ market, and Regeneron could leapfrog earlier entrants like Roche’s Lunsumio or AbbVie’s Epkinly.
Reality: The data was decent but not a breakout. Worse, the FDA issued a CRL (Complete Response Letter) in 2024 asking for longer follow-up. That put Regeneron behind competitors who are already on the market and gaining traction. Odronextamab might still get approved later this year — and Regeneron is the only player with data in both FL and DLBCL — but it’s clearly no longer a “category winner.”
Verdict: Still viable, but the market leadership angle is gone. At best, this becomes a supporting player, not a franchise.
Fianlimab + Libtayo: A Shot at the LAG-3 Class
Prediction: Regeneron’s LAG-3 antibody (fianlimab), when paired with its PD-1 drug Libtayo, could compete directly with BMS’s Opdualag in melanoma. If the combo hit its endpoints, it could establish Regeneron in the next wave of immuno-oncology.
Reality: The data so far is promising — strong overall response rates and progression-free survival. But the Phase 3 trial slipped into late 2025, pushing out the timeline. Meanwhile, Opdualag is entrenched and Merck is advancing its own LAG-3 combo. Even if Regeneron succeeds, it’ll be a second- or third-to-market entrant.
Still, the science is sound, and Regeneron has shown it can commercialize Libtayo effectively. A positive readout would give them a viable position in a meaningful oncology segment.
Verdict: A live option. Execution and timing will determine how valuable it becomes.
Pozelimab + Cemdisiran: A Rare Disease Wedge
Predition: By combining an RNAi agent with a monoclonal antibody, Regeneron could offer a novel treatment for PNH (a rare blood disease), potentially leapfrogging Alexion’s Soliris/Ultomiris franchise. If successful, it could validate Regeneron’s platform strategy and open doors to broader RNAi use.
Reality: The Phase 3 data was solid. No major safety concerns. The combo works — and may offer some dosing and tolerability advantages. Approval could come in 2026, and commercial runway exists (PNH is a ~$5B market globally). It’s a small niche, but an important one — especially because it’s Regeneron’s first real RNAi + antibody asset.
Verdict: Undervalued part of the bull case. The science is ahead of the stock price here.
“Smart” M&A with a $17B War Chest
Predition: Regeneron would deploy its massive cash position on smart acquisitions — not speculative moonshots, but near-term growth assets that could plug in fast.
Reality: The company has stayed active, but cautious. It bought Decibel Therapeutics for a gene therapy program, partnered with 23andMe for access to genetic data, and picked up a GLP-1/GIP dual agonist program. All early-stage bets. Nothing accretive in the short term. These may pay off down the road, but for now they’re R&D — not revenue.
Verdict: There is still some potential. But the market was hoping for something more tangible by now.
A Return to Growth — Eventually
Prediction: Even with Eylea in decline, Dupixent plus pipeline assets would return Regeneron to mid-teens top-line growth. With gross margins >80% and lean SG&A, earnings would scale quickly.
Reality: Not yet. Q1 2025 revenues were down year-over-year. Dupixent is growing ~20%, but that’s not enough to plug the Eylea gap — at least not yet. Management expects growth to reaccelerate in 2026 as Dupixent’s COPD launch scales and new approvals (like odronextamab) come online.
Verdict: Delayed, not derailed. But the window to deliver is getting narrower. It won’t happen this year.
Valuation Re-Rating — Still Waiting
Prediction: If growth resumed and the pipeline delivered, REGN’s P/E would re-rate to 18–20x — more in line with peers like Vertex or even Eli Lilly.
Reality: The market hasn’t moved. REGN still trades around 12x forward earnings, partly because of the Eylea overhang and pipeline delays. But if management can string together a few good quarters and COPD uptake accelerates, a re-rating is still plausible.
Verdict: The market wants proof — but the setup is there. It won’t happen this year.
My Take: Most of the Damage Is Done — But the Upside Isn’t
By mid-2025, the core of the bear thesis on Regeneron has already played out. The Eylea patent cliff came earlier than hoped and hit harder than bulls expected. Standard-dose revenue is falling fast, high-dose uptake has underwhelmed, and biosimilars are now a present-tense reality. On the pipeline side, odronextamab was delayed, not denied, and while the setback stung, it didn’t collapse the platform. The competitive threat to Dupixent in eczema turned out to be more noise than signal. The market has absorbed these blows — and Regeneron’s valuation reflects it.
That’s what makes the current setup interesting. The bad news isn’t hiding. It’s already all priced in.
At the same time, key elements of the bull case remain alive — and potentially transformative if they deliver over the next 6–18 months:
COPD approval for Dupixent is a confirmed win. It’s the first biologic ever approved for this indication, and while uptake is early, the market size is large and the competitive landscape is wide open. This isn’t speculative anymore — it’s an execution story.
Fianlimab (LAG-3) remains a real shot on goal. The Phase 3 readout is expected in late 2025. If it hits, Regeneron can credibly compete with BMS’s Opdualag in melanoma, opening a new immuno-oncology franchise around Libtayo.
Pozelimab + Cemdisiran in PNH has real scientific edge. The Phase 3 data was clean. The combo showcases Regeneron’s RNAi + antibody approach, and if approved in 2026, could generate meaningful revenue in a rare disease space with limited competition.
Growth reacceleration could begin in 2026. With Eylea declines front-loaded and Dupixent expanding into COPD, the company may return to mid-teens revenue growth next year. Margins remain excellent, and the operating structure is built for scalability.
Valuation remains undemanding. REGN is still trading around 12× forward earnings — far below peers with similar pipelines and better-than-average balance sheets. Even modest execution could support a rerating toward 15×–18×, especially if Dupixent sales begin to outpace Eylea erosion.
That brings us to positioning.
My Trade: Short REGN Puts
At this price level — with sentiment beaten down, the major bearish risks already surfaced, and bullish drivers still live — the risk/reward skews positively for put sellers. The business remains highly profitable and cash-rich. It’s not a turnaround bet. It’s a temporary growth pause in a high-margin innovator.
If you're comfortable owning the stock at lower levels, selling puts at or slightly below current support offers a way to get paid while waiting for the pipeline to resolve. Even if the bullish outcomes take longer than expected — or don’t fully materialize — much of the downside already appears priced in. And if COPD uptake accelerates or the PNH or LAG-3 programs surprise to the upside, you’re positioned to benefit.
Put simply: the bear case is largely behind us. The bull case is still ahead. And the market is paying you to wait.
This isn’t a momentum trade. It’s a valuation + pipeline setup with a defined floor. If you're looking for asymmetric return profiles in biotech, this one deserves a place on the list.
