Home health remedies Are Regeneron’s Libtayo hopes ‘hubris’ or can it really dominate I-O combos?

Are Regeneron’s Libtayo hopes ‘hubris’ or can it really dominate I-O combos?


It’s never easy being the sixth contender in any drug class, but for Regeneron, it’s been particularly challenging to market the PD-1 inhibitor Libtayo—even though it was the first in the field approved to treat metastatic cutaneous squamous cell carcinoma (CSCC).

Libtayo debuted last October, when the immuno-oncology market was already dominated by blockbusters like Merck’s Keytruda, Bristol-Myers’ Opdivo and Roche’s Tecentriq. And Regeneron made no secret of its plans to expand to markets where those drugs are already well-established, most notably lung cancer.

So when Regeneron updated investors on Libtayo Tuesday, Wall Street analysts were hanging on every word—and not happy about what they were hearing.


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Regeneron announced that in a trial of Libtayo in advanced non-small cell lung cancer (NSCLC), the response rate has been 42%, as compared to 22% for chemotherapy. The company also said a second trial combining Libtayo with chemotherapy in NSCLC should be fully enrolled by the end of next year.

The announcement came amid a better-than-expected earnings report, during which Regeneron revealed that Libtayo chalked up $48 million in the U.S. sales during the quarter.

SVB Leerink analyst Geoffrey Porges called Regeneron’s outlook for the future “encouraging” in an investor note after the earnings announcement, but he tempered that compliment with a jab: “No End to Hubris.” Porges noted that sales of Libtayo were in line with consensus estimates but a whopping 29% lower than SVB Leerink had predicted.

“It remains difficult for most outsiders to see how the company’s modest sales of their PD-1 antibody thus far, and handful of carefully curated trials, are going to challenge the juggernauts now dominating the IO landscape for lung cancer,” SVB Leerink analysts wrote, “but this seems to be the thrust of the company’s investments and comments to analysts and investors.”

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Libtayo is under study in several other cancer types, including melanoma, colorectal cancer and Hodgkin lymphoma. And Regeneron is testing it not only as a solo therapy or with chemo, but also alongside other immuno-oncology agents, including its own bispecific antibodies.

Chief Scientific Officer George Yancopoulos said during Tuesday’s earnings call that the company has high hopes for those trials, including one that pairs Libtayo with the company’s investigational PCMA-CD28 bispecific drug in prostate cancer. “In this prostate cancer setting, which is normally not responsive to PD-1, we hope that our [drug] can trigger responses as it has in preclinical studies,” he said.

Still, some analysts struggled to share Yancopoulos’ enthusiasm, in light of Libtayo’s newly disclosed results in NSCLC. Evercore ISI analyst Josh Shimmer pointed out that the response rates to Libtayo were similar to those reported for Keytruda (39% vs 32% for chemo) and Tecentriq (38% vs 29%). Regeneron, he wrote in an investor note, “hopes to win the ‘combo’ race, which is a tall task.”

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Regeneron has been struggling all year to convince investors of its growth potential: Its stock has fallen from $440 a share in March to $258. The company has positioned itself as a leader in antibody drug development, stressing the opportunity to forge new markets with bispecifics. But there are now 40 companies with antibodies on the market—double the number of contenders Regeneron was facing as recently as 2013, SVB Leerink pointed out in a September report.

Aside from Dupixent, Regeneron’s blockbuster to treat eczema and nasal polyps, the company’s products are mostly “antibodies against known targets with relatively modest differentiation from their established competitors,” SVB Leerink said in that report. Even the company’s bispecific technology “is not obviously differentiated from the capabilities at Amgen [or] Roche,” the analysts added.

The next opportunity for Regeneron to persuade investors will come in early December at the annual American Society of Hematology (ASH) conference, where the company is expected to present additional data from ongoing Libtayo trials.

Regeneron CEO Len Schleifer said during the earnings call that future trial data will dictate the company’s marketing strategy, but that Regeneron’s leaders remain confident they can take on Merck and other rivals.

“PD-1 is a foundational technology for us in the immuno-oncology space. Lung cancer is the biggest opportunity,” Schleifer said. “We want to be there.”

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