NVO - Regeneron's Push Into Obesity Q4 2023 Earnings Review

2024-02-02 12:43:50 ET

Summary

• Regeneron returned to topline growth in 2023 and this has led to the company's valuation rising to my expected EV/revenue range.
• The company is making significant investments in the obesity space, focusing on preserving lean mass and reducing fat mass.
• Q4 2023 earnings review shows further stabilization of the Eylea franchise, continued strong growth of Dupixent, and Libtayo, and we could see additional approvals this year.
• Regeneron is not as attractively valued as it was back in mid-2022 when I initiated coverage, but risk-reward still favors the long side.

Regeneron ( REGN ) has made significant progress since I initiated coverage in the summer of 2022 which was the time of the acquisition of Libtayo rights from partner Sanofi ( SNY ). I argued at the time that this was a great deal for Regeneron and shortly thereafter , that the company should return to growth after the revenue decline driven by the disappearance of COVID-19 revenues, and that the EV/revenue multiple should start to expand from below 5 to the 7-8 range and up to 10 during expansionary periods....

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