Regeneron Pharmaceuticals Inc. (REGN) shares rallied 1.60% to $341.39 after reporting a strong third quarter. Profit came in at $3.13 a share, 48 cents higher than the analysts’ estimates of $2.65. Revenue rose 7% to $1.22 billion compared to a year ago, which also include Sanofi and Bayer collaboration revenues of $336 million in the third quarter of 2016, compared to $382 million in the third quarter of 2015.
CEO Leonard S. Schleifer, M.D., Ph.D. noted "In the third quarter, we saw continued U.S. sales growth with EYLEA in retinal diseases and with Praluent in hypercholesterolemia. We are preparing for a potential approval and launch for Dupixent in atopic dermatitis and continuing to advance our pipeline at all stages."
Another driver for the rally the company narrowing their 2017 Eylea US net product sales guidance from 20-25% to 23-25%. Lower costs also helped the rally as GAAP COGS was $30 million in the third quarter of 2016, compared to $67 million in the third quarter of 2015.
Price action on the daily chart shows that bullish move started on Friday after price made a pre-market low at $320. Price formed both a bullish ABCD pattern and double-bottom pattern. Point C was confirmed with the 61.8% Fibonacci retracement level of the A to B leg and Point D was targeted just ahead of the 261.8% Fibonacci expansion level of the B to C leg. Friday’s rally is tentatively facing key trendline resistance. If we see that level taken out, further upside could target the $385 region.
If bearish momentum returns, further downward support may target the psychological $300 level.
54The Trade: Buy REGN at $335.50, with a stop loss at $332.50 and a take profit at $344.50. The Risk/Reward Ratio is 1:3