QS Research · Michael Burry's Scion Capital analyst template · 2006
REGENERON PHARMACEUTICALS, INC. (REGN)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: PASS
Conviction low · base case -1% · downside -21% · upside +50%
On normalized cycle earnings the stock is roughly fairly valued: FY2020-FY2025 average operating income was $4.82B, net income $4.80B and FCF $4.10B, versus TTM to Sep 30 2026 EBIT $4.86B, net income $4.82B and FCF $3.83B, so little of the call depends on normalization. At the quoted 17.6x TTM P/E, $4.80B normalized net income x 17.6x = $84.5B, -0.6% vs the $84.97B market cap; the EV/EBIT cross-check (4.82B x 16.0x + 7.31B net cash = $84.4B) is also about -0.6%. EYLEA erosion is real, but Dupixent and EYLEA HD are offsetting it; the problem for a deep-value buyer is that the tape is not suppressed ($904.35, -8.8% from the 52-week high, +39.8% one-year) and the EV/EBITDA range of 8.5x-17.1x on $5.20B normalized EBITDA gives -39%/+13%, capping upside unless REGN earns a higher multiple. Base -0.6%, downside -21% and upside +50% fail both the long and short rules, so pass.
Key numbers
- Share price: $904.35
- Market cap: $84.97B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $16.90B
- EV / EBITDA (TTM): 14.4x
- P/E (TTM): 17.6x
- Price / book: 2.54x
The 15 boxes
- ✓ 1. Long-form business notes
Regeneron is a fully integrated biotech that books its own US EYLEA/EYLEA HD, global Libtayo and US Praluent sales, and takes profit shares or royalties on Sanofi's Dupixent/Kevzara and Bayer's ex-US EYLEA. The cycle reads: revenue $8.50B FY2020, $16.07B FY2021, $12.17B FY2022, $13.12B FY2023, $14.20B FY2024, $14.34B FY2025, but operating income fell from $8.95B (FY2021) to $3.58B (FY2025) - identical to FY2020's $3.58B on $5.84B less revenue. FY2025 net income of $4.50B sits above operating income of $3.58B (pre-tax $5.23B), so normalize off the operating line and the $4.98B FY2025 operating cash flow, not the net line. Mix is rotating from EYLEA ($5,321.4M FY2025 vs $9,214.8M FY2023) into EYLEA HD ($2,569.6M) and Dupixent (global $17,806.7M, of which Regeneron books only its profit share).
- ✓ 2. Competitive advantage
The sources show no durable moat at Regeneron, only a franchise asset being competed away: EYLEA's U.S. regulatory exclusivity expired in May 2024, EYLEA U.S. net product sales fell 42% in FY2025, and operating income dropped from $8.95B (FY2021) to $3.58B (FY2025) while revenue fell only 11% ($16.07B to $14.34B). What is left is concentration — EYLEA HD+EYLEA at 31% of FY2025 total revenues and Sanofi/Dupixent collaboration revenue at 41% — against heavy named branded and biosimilar competition in every franchise. Cash generation stays strong (operating cash flow $4.98B in FY2025) and the business is capital-light, but FY2025 net income of $4.50B exceeds operating income of $3.58B, so the profitability must be credited to operating earnings, not net income.
- ✓ 3. 10-Q takeaways
Q3 2026 (three months ended 2026-09-30) revenues were $5,115.8M versus $3,754.3M in Q3 2025, and income from operations rose to $2,048.2M from $1,026.8M, driven by Dupixent (global sales $6,540.5M, up 35%) and Libtayo, while the combined EYLEA HD + EYLEA franchise fell 11% to $1,741.2M. Net income of $1,948.7M ($18.45 diluted) sits on top of $235.9M of other income in Q3 2026 versus $736.5M in Q3 2025, so operating income, not net income, is the cleaner base for cyclical normalization. Offsets to the revenue growth: biosimilar and competitive pressure on EYLEA, clinical misses (fianlimab first-line melanoma, itepekimab discontinued), and new U.S. pricing commitments made in April 2026.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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