The Zacks Analyst Blog Highlights: Eli Lilly, Regeneron Pharmaceuticals, Pfizer and Merck

For Immediate Release

Chicago, IL – January 26, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Eli Lilly LLY, Regeneron Pharmaceuticals REGN, Pfizer PFE and Merck MRK.

Here are highlights from Tuesday’s Analyst Blog:

FDA Limits Use of Regeneron and Lilly's COVID Antibody Cocktails

The FDA announced that it has revised the emergency use authorization (EUA) for two cocktail antibody drugs — Eli Lilly’s bamlanivimab plus etesevimab, and Regeneron Pharmaceuticals’ REGEN-COV (casirivimab plus imdevimab). The revision for these two cocktail COVID-19 drugs limits their use in patients who have been infected or exposed to a coronavirus variant that is susceptible to these treatments.

The FDA stated that Eli Lilly and Regeneron’s COVID-19 drugs are currently not authorized for use in any U.S. states, territories, and jurisdictions. However, the FDA mentioned that these drugs may be authorized for use in certain regions where there is a chance of COVID-19 infections due to coronavirus variants susceptible to these treatments.

The FDA’s decision to limit the authorized use of these cocktail COVID-19 drugs was based on data, which showed that these treatment options are highly unlikely to be effective against the currently prevalent Omicron variant in the United States. Data as of Jan 15 from the Centers for Disease Control and Prevention have shown that more than 99% of COVID-19 infection cases in the United States are estimated to be due to the Omicron variant.

The COVID-19 Treatment Guidelines Panel of the National Institute of Health (“NIH”) also recently recommended against the use of Eli Lilly and Regeneron’s COVID-19 drugs due to their markedly reduced activity against the Omicron variant. Moreover, the NIH panel stated that real-time testing for identifying rare non-Omicron variants is not available routinely, which poses a challenge for the effective use of these drugs in fighting COVID-19.

We note that Regeneron’s biologics license application seeking “full” approval for REGEN-COV as treatment in non-hospitalized COVID-19 patients is under review with the FDA. A decision is expected in April. However, the FDA is unlikely to grant approval for the drug following limiting its EUA.

While Lilly’s bamlanivimab and bamlanivimab/etesevimab cocktail medicines generated revenues of $217.1 million in the third quarter of 2021, Regeneron generated $1.2 billion from the sale of REGEN-COV. The majority of revenues from these drugs were generated in the United States. The limitation in the authorized use of these drugs should hurt the top line of Lilly and Regeneron beginning the first quarter of 2022.

While shares of Lilly declined 1.09% on Jan 24 following the FDA update, Regeneron’s shares were down 1.06% in after-hours trading on the same day.

Shares of Lilly have gained 13.2% in the past year compared with the industry’s increase of 9.7%.

Over the past 12 months, Regeneron’s shares were up 13.4% against the industry’s decrease of 40.7%.

The FDA has always vouched for the best tools to fight against the COVID-19 pandemic since its beginning. The FDA stated that several other options are available to treat COVID-19 infections and they are expected to be effective against the currently prevalent Omicron variant. These treatment options include oral drugs —Pfizer’s Paxlovid and Merck’s molnupiravir — and intravenous drugs — Glaxo’s sotrovimab and Gilead’s Veklury.

Pfizer’s Paxlovid and Merck’s molnupiravir are the first oral treatment options in the non-hospitalized setting for COVID-19 infection that were authorized for emergency use in December 2021 in the United States. While Pfizer expects to manufacture 120 million courses of Paxlovid by the end of 2022, Merck expects molnupiravir’s global opportunity to be approximately $5 billion to $7 billion through 2022.

The unavailability of two popular COVID-19 drugs may boost the demand for the existing COVID-19 treatment options, especially the oral drugs as they are easy to administer.

While Pfizer sports a Zacks Rank #1 (Strong Buy), Regeneron carries a Zacks Rank #2 (Buy). Merck and Lilly carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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