Unlock: Regeneron (REGN) – Dupixent Checks Paved the Way for Big Profits

It pays to do fundamental research. Since last Friday we have been pointing out bullish call activity and strong Dupixent channel checks into earnings. Here is bullish view presented in JaguarLive chat room yesterday, May 3, going into earnings. To learn more about our approach and how you can become a successful trader, sign up for 4 week trial and test drive live chat room with some of the best traders: SUBSCRIBE

Here is our discussion in chat room yesterday, May 3, after a client asked about owning May 400-425-450 call butterfly spread into earnings:

Regeneron (REGN) – I really like the odds of that butterfly spread going into earnings tomorrow but the way these bulls have been nonstop buying calls since Friday is highly aggressive looking for up, up and away. So, the question is will stock stay below $450 by May expiration for the butterfly to expand in value? Let’s put some color behind this.

This call buying in REGN started on Friday. That day BAML issued a bullish note titled “Dupixent flying off the shelf.” Rarely I see somebody discuss a drug with that narrative.

Dupixent – Launched with partner Sanofi in early March. Through 4-week period ending on April 21 over 1,200 physicians have written a prescription for Dupixent in moderate-to-severe atopic dermatitis (AD), adding to over 2,500 prescriptions thus far. There are 300,000 patients who need it and market is wide open with near zero competition. And that’s just in the US. Then Europe launch will happen by the end of 2017 where Sanofi should have no problem selling anyway. Expect to see accelerating of Dupixent each month.

To put Dupixent strong launch in perspective, consider this comparison of some of the most successful “psoriasis” drug launches in recent history:

– Cosentyx during 4th week had 52 TRxs
– Taltz during 4th week had 60 TRxs
– PCSK9 during 4th week had 72 TRxs
– Praulent during 4th week had 80 TRxs
– Celgene’s Otezla during 4th week had 101 TRxs (one of the most successful launches)

IMS data shows Dupixent during 4th week had 200 TRxs, nearly double the Celgene’s Otezla drug AND at a price that is 40% higher than Otezla.

To put this in perspective, Leerink on Monday said:

“If Dupixent indeed continues to see double the prescription volume of Otezla, the 2017 revenue would be closer to $230mm, or a 68% beat compared to consensus. Although it is premature to make too much of four weeks of data, Dupixent certainly appears to be off to a consistently faster start than the three recent high priced branded psoriasis treatments introduced into the US market.”