The market is too pessimistic about Regeneron’s recurring antibody profits. Slower Dupixent growth can still support higher earnings now that historical repayment deductions have ended, even allowing for further eye-drug erosion and substantial research spending.
Key points
- $530 million of first-half 2026 Sanofi repayment deductions will not recur.
- $26 billion of worldwide antibody sales underpins my 2027 forecast.
- $866.67 a share is my twelve-month target, without investment gains.
The call
The market is too pessimistic about recurring profits. At my valuation multiple, today’s price requires roughly $23.4 billion of worldwide Dupixent and Kevzara sales in 2027. That is almost unchanged from my 2026 estimate, despite expanding treatment use and the end of historical repayment deductions.
Antibody revenue is overtaking the eye-drug decline ($ millions)Source: July 30, 2026 10-Q; other includes remaining direct products and other revenue.
I expect antibody profits to outweigh eye-drug erosion. My 2027 antibody-sales forecast allows growth to slow sharply from the June quarter. The market’s focus on biosimilars, cheaper competing eye medicines, obscures improving profit retention. The next results should distinguish recurring gains from temporary sales adjustments and the new upfront payment.
Valuation
| My forecast or valuation input | Figure |
|---|
| 2027 consolidated revenue | $18.33 billion |
| 2027 operating profit | $5.19 billion |
| 2027 after-tax operating earnings | $42.43 a share |
| Twelve-month earnings multiple | 17 times |
| Net financial assets retained in forecast | $15.12 billion |
| Twelve-month target | $866.67 a share |
I assume 104 million diluted shares, a 15% tax rate and $7.25 billion of 2027 research spending, retaining stock compensation as an expense. The multiple includes a two-turn research-franchise premium over my conservative 15-times case, worth about $85 a share; cash is added separately without capitalizing its investment income. My sell-heavy record cautions against reflexively discounting durable growth, but the forecast does not require multiple expansion.
The target depends on worldwide antibody salesOur 2027 scenarios, October 8, 2026; constant costs, 35.5% profit capture and 17 times after-tax operating earnings.
Risks
- Dupixent’s favorable sales adjustment could mask slowing demand; watch prescriptions and collaboration profit retention rather than list prices.
- Eye-drug price declines could outrun HD conversion; watch combined franchise revenue and repeated syringe-approval delays.
- Research spending or poor collections could absorb the gains; watch receivables, cash generation and development costs above the new agreement’s cap.
What would change my mind
I would withdraw the buy if first-half 2027 results put worldwide antibody sales below a $24 billion annual pace without a corresponding reduction in research spending.