- The U.S. government will pay as much as $2.6 billion for up to 1.25 million more doses of Regeneron’s COVID-19 antibody treatment, providing a boost to the Tarrytown, New York-based biotech after a slow initial uptake of the therapy.
- Under the agreement, the U.S. will buy the lowest dose authorized by the Food and Drug Administration. Regeneron in November won emergency clearance for a 2,400 mg dose but is currently testing an option that delivers half as much drug.
- Regeneron expects to deliver the full 1.25 million order by June 30 if the lower dose is authorized for use. If not, the company would only be able to produce about 750,000 of the higher-dose treatment.
The deal represents a big vote of confidence in Regeneron’s therapy, which showed promise in clinical trials but has been hamstrung by significant logistical problems that have limited its use. Strained health-care facilities are having trouble identifying the individuals who would benefit most from the treatment, and COVID-19 patients must be in a hospital or clinic to get the infusion in case of a reaction — which is problematic since they risk infecting others.
The treatment, used to treat President Donald Trump last year, is approved to help speed recovery for high-risk patients whose disease hasn’t yet become severe or caused hospitalization. Studies show it works best in patients with high levels of virus or those whose immune systems haven’t begun to fight the virus — groups that can be hard to pinpoint.
Those challenges were reflected in Regeneron's disappointing fourth-quarter sales, which came in at $144 million, well below analyst estimates. Still, Regeneron CEO Leonard Schleifer told investors at the J.P. Morgan Healthcare Conference yesterday that he expected those numbers to climb and saw "substantial demand" for the medicine.
There is still a significant need for effective treatments for COVID-19 with the vaccination rollout going slower than expected and cases continuing to soar. More contagious coronavirus variants are emerging as well, giving public health officials further cause for alarm.
Regeneron says its antibody cocktail, made up of casirivimab and imdevimab, may prove to be a crucial weapon because it binds to multiple sites on the virus, limiting its ability to escape. Eli Lilly's rival treatment, by comparison, uses a single antibody called bamlanivimab. Lilly CEO David Ricks recently expressed concern that a variant that originated in South Africa may evade its medicine.
The new deal with the U.S. government comes on top of a previous agreement to buy 300,000 doses. It values each dose at $2,100, up from $1,500 a dose in the earlier round. Piper Sandler analyst Christopher Raymond noted the jump in a note to investors and increased his revenue estimate for the 2021 fiscal year by about $1.6 billion.
Regeneron said its total production run for the U.S. government may be affected by "a number of factors.” For now, the company is still producing 2,400 mg doses under the original contract. It expects to supply the "vast majority" of doses under the new deal in the second quarter. Data on the 1,200 mg dose regimen is due this quarter.
The U.S. government has so far allocated some 127,700 of the 300,000 courses it originally pre-ordered to states and territories, which then give the medicine to healthcare facilities. Only about 72,000 of those doses have been delivered, however. Roche is helping Regeneron distribute the drug overseas through an alliance the two formed in August.
Meanwhile, the U.S. government last month also announced plans to buy another 650,000 doses of Lilly’s treatment for $812.5 million.