MW Regeneron dashes Wall Street's hopes as COPD treatment trial suffers a failure

By Tomi Kilgore

Analysts were expecting a 'positive or a strong positive' result from a Phase 3 trial but got a failure instead, and Regeneron's stock plunged

Shares of Regeneron Pharmaceuticals Inc. were having their worst day in more than a decade on Friday after a shocking failure in a late-stage trial of the biotechnology company's treatment for chronic obstructive pulmonary disease.

The disappointing trial results were revealed overnight, just after a number of Wall Street analysts said positive results were likely and could give a big boost to the stock.

Instead, the stock $(REGN)$ tumbled 18.5% in afternoon trading, enough to pace the S&P 500 index's SPX decliners and to put it on track for its first sub-$500 close since May 2021.

It was also headed for its biggest one-day decline since it sank 21% on April 29, 2011.

In a 1 a.m. Eastern time press release, Regeneron said one Phase 3 trial of itepekimab, in adult former smokers with COPD, met the primary target by showing significant reduction of 27% in the sudden worsening of symptoms after 52 weeks.

But a second trial failed to meet that same primary endpoint, with a reduction in exacerbations after 52 weeks of just 2%.

That failure was a big surprise to Wall Street.

BMO Capital analyst Evan Seigerman had said on Thursday that while Regeneron has struggled recently in the face of biosimilar competition, regulatory setbacks and "general malaise," he believed the stock was "attractively priced," particularly because he saw an 80% probably of either "a positive or a strong positive" trial result that could propel the stock 10% to 20% higher on Friday.

J.P. Morgan's Christopher Scott said he saw an approximately 70% probability of a reduction in exacerbations of greater than 25%, which he believed would boost the stock in the mid- to high-single-digit percentage range. He said there was "a very low probability" that the study would fail.

So what's next for itepekimab?

Regeneron and its development partner, France-based Sanofi SA $(SNY)$ (FR:SAN), said they are "assessing the data and will discuss next steps with regulatory authorities."

Sanofi's U.S.-listed shares dropped 5.6% in afternoon trading on Friday.

-Tomi Kilgore

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

May 30, 2025 15:19 ET (19:19 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.