Regeneron’s shares have declined nearly 17% following the failure of the company’s Dupixent follow-up itepekimab.
Regeneron is throwing itself into the obesity market, licensing a dual GLP-1/GIP receptor agonist from the Chinese biopharma Hansoh Pharmaceuticals Group. The deal comes after Regeneron’s pipeline suffered a body blow last week on mixed results for its Sanofi-partnered Dupixent follow-up.
The deal will see Regeneron work with Hansoh on the late-stage GLP1/GIP agonist HS-20094. The Chinese biotech will receive $80 million up front and up to $1.93 billion for development, regulatory and sales milestones through the deal, announced Monday morning.
Regeneron’s shares declined more than 16% last week to $490.28 at close Friday on the failure of its Dupixent follow-up itepekimab for COPD in a Phase III trial. BMO Capital Markets called the readout “a step in the wrong direction for Regeneron during a time when the company really needed a win,” in a Friday note.
After last week’s share slide, Regeneron’s shares opened Monday with a further 1.6% decline to $482.39.
According to BMO, the HS-20094 deal marks Regeneron’s official entry to the GLP-1 space. Hansoh is testing the molecule in a Phase III trial of about 1,000 patients receiving weekly subcutaneous injections. In its announcement of the deal, Regeneron said that HS-20094 has “demonstrated promising efficacy and safety clinical data, suggesting a potentially similar profile to the only FDA-approved GLP-1/GIP receptor agonist,” referring to Eli Lilly’s Mounjaro.
The company is planning to test the new drug candidate with molecules already in Regeneron’s pipeline, the company’s senior vice president Boaz Hirshberg said in the announcement, “in order to holistically address muscle loss and potentially other comorbidities of obesity, such as cardiovascular diseases, diabetes and liver conditions.”
This is the first GLP-1 molecule that Regeneron has had its hands on directly. The company has been testing two of its therapies in combination with Novo Nordisk’s semaglutide. The study features Regeneron’s muscle-preserving anti-GDF8/anti-myostatin antibody trevogrumab and or the anti-activin A antibody garetosmab, with the aim of preserving muscle mass that is often lost on GLP-1 drugs alone.
In results announced five minutes before the Hansoh deal, Regeneron showed data from the Phase II COURAGE trial that adding trevogrumab improved muscle preservation by 51.3%, and adding garetosmab on top of that improved it to 80.9%.
Analysts from BMO Capital Markets received the COURAGE data “positively,” noting that the two- and three-drug regimens also increased total weight loss—11.3% and 13.2%—versus semaglutide alone, which achieved 10.4% weight loss.
Pointing to safety data, however, BMO noted that “safety for myostatin activin treatment may still be in question,” since 10.1% experiencing severe adverse effects and 28.3% stopping treatment altogether.
The analysts thus remained “hesitant” on muscle preservation until they saw Phase III data.
