TLDR
- Regeneron’s experimental melanoma drug fianlimab failed to meet its primary endpoint in a Phase 3 trial against Merck’s Keytruda.
- The combination of fianlimab and Libtayo did not show a statistically significant improvement in progression-free survival.
- REGN stock dropped 11% in premarket trading to $618 following the news.
- Multiple Wall Street analysts cut price targets; Citi downgraded from Buy to Neutral, lowering its target to $700 from $900.
- RBC Capital also trimmed its target to $707, flagging the failure as part of a broader pattern of recent pipeline setbacks.
Regeneron Pharmaceuticals stock fell sharply in premarket trading Monday after its experimental melanoma drug fianlimab missed the main goal of a late-stage trial.
Regeneron Pharmaceuticals, Inc., REGN
The stock dropped 11% to $618 in premarket trading. That follows a Friday evening update on the Phase 3 trial results.
The trial tested fianlimab, an immunotherapy drug for advanced melanoma, in combination with Regeneron’s own Libtayo. The combination was pitted against Merck’s Keytruda, one of the best-selling cancer drugs on the market.
The trial enrolled 1,546 patients across four groups — high-dose combination, low-dose combination, Keytruda with placebo, and Libtayo with placebo.
Fianlimab failed to show a statistically significant improvement in progression-free survival. In plain terms, it didn’t delay disease progression or death compared to Keytruda.
A high-dose version of the fianlimab-Libtayo combo did show a numeric improvement over Keytruda — but that result didn’t clear the statistical significance bar needed to be considered meaningful.
The news prompted a wave of analyst downgrades and price target cuts.
Wall Street Reacts
Citi Research’s Geoff Meacham cut his rating on Regeneron to Neutral from Buy and slashed his price target to $700 from $900. He noted that without fianlimab in the model, there are no “incremental positive catalysts” to justify a premium valuation.
Jefferies analyst Akash Tewari said the miss was “not particularly” surprising, calling it a validation of the bear case. He kept a Buy rating but trimmed his price target to $870 from $890 and removed fianlimab from his model.
RBC Capital lowered its target to $707 from $762 while keeping a Sector Perform rating. The firm had estimated peak probability-adjusted sales of $1.6–$1.8 billion for fianlimab in this indication — all of that is now off the table.
Pipeline Concerns Mount
RBC flagged the fianlimab failure as part of a broader pattern. The firm pointed to other recent setbacks including a failed itepekimab trial, a less competitive label for Eylea HD, and manufacturing issues.
Regeneron’s Eylea reported a 10% decline in first-quarter sales, which had already weighed on the stock earlier this year. Truist Securities lowered its price target to $769 on the back of regulatory delays, though it kept a Buy rating citing stronger-than-expected Q1 earnings.
Not all analysts have turned bearish. BofA Securities reiterated a Buy rating with a $860 price target despite the trial setback. Jefferies also held its Buy call.
On the positive side, Dupixent — co-developed with Sanofi — continues to grow, launching in new indications and exceeding sales expectations. Eylea HD is also described as returning to track, and Regeneron maintains more cash than debt on its balance sheet.
Thirteen analysts have revised earnings estimates downward for the upcoming period, according to InvestingPro data.
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