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Regeneron (REGN) Downgraded To 'Hold' By Brean Capital On Mid-2013 Allergan Headline Risk

 January 17, 2013 10:12 AM
 


(By Balachander) Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) shares were downgraded to "hold" from "buy" by Brean Capital due primarily to headline risk from Allergan.

The brokerage wrote that it will be increasingly difficult for the company to substantially beat consensus as it had quite easily throughout 2012, regardless of a new indication and ex-U.S. approvals.

Share price is completely regulated by Eylea revenue and therefore the brokerage believes that any clear risk to the franchise would have a profound negative impact.

"We are most concerned with headline risk from Allergan and its DARPin Phase 2 trial in wet AMD in mid-2013," Brean Capital wrote. "Should DARPin deliver in Phase 2 as Phase 1 indicates that it could, Regeneron shares would be hit hard, in our view."

[Related -Allergan, Inc. (NYSE:AGN): Is Ozurdex A Potential Sleeper Hit?]

Allergan headline risk should also serve to dampen share price surges upon positive quarterly surprises, as that risk is now no longer a next year concern. Fovista is always another concern, should a competitor acquire the company, the brokerage said.

The stock, which has been trading in the 52-week range of $76.69 to $188.95, shed 1.93 percent to trade at $166.74 on Thursday.

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