Regeneron Shares Face Scrutiny Amid Diverging Analyst Views

Regeneron Pharmaceuticals experienced a notable decline in its share price following a rating downgrade by Morgan Stanley. The investment bank's concerns regarding the company's pipeline diversification have cast a shadow over recent positive developments, including a significant new collaboration in the field of gene editing.

Amid the analyst debate, Regeneron has made a substantial move to bolster its future prospects. The biotech firm announced a global collaboration with Tessera Therapeutics to co-develop the gene-editing program TSRA-196. This program targets the rare genetic disorder Alpha-1 Antitrypsin Deficiency. Key terms of the deal include:
* An upfront payment of $150 million, delivered in cash and an equity investment.
* An equal sharing of global development costs and any potential future profits.
* The planned submission of applications for initial human studies is expected before the end of this year.

This partnership represents a clear strategic investment, but whether it can evolve into a major new growth engine remains a central question for investors.

The Analyst Divide: Downgrade vs. Optimism

The immediate catalyst for the stock's approximate 2.5% drop on Wednesday was Morgan Stanley's decision to shift its rating from "Overweight" to "Equal-Weight." Analyst Terence Flynn cited a "fairly valued" assessment and growing skepticism about the diversity of Regeneron's drug pipeline. Notably, the firm maintained its price target of $767 per share. The core issue highlighted is whether Regeneron can successfully expand its portfolio beyond blockbuster drugs Eylea and Dupixent before biosimilar competition and patent expirations intensify.

Should investors sell immediately? Or is it worth buying Regeneron?

This cautious stance stands in contrast to more bullish perspectives from other institutions. Just a day prior, Bernstein SocGen Group reaffirmed an "Outperform" rating with an $818 price target. Separately, Truist Securities initiated coverage with a "Buy" recommendation and a $798 target. Wells Fargo also raised its target to $700, largely driven by the unexpectedly early approval for Eylea HD.

Navigating Operational and Regulatory Hurdles

Beyond long-term strategy, Regeneron is managing several near-term operational challenges. The company has reassured the market that supply shortages for its commercial products are not anticipated, despite a recent FDA warning issued to its manufacturing partner, Catalent. Furthermore, key regulatory milestones are on the horizon for Eylea HD:
* An FDA decision regarding an additional filler for Eylea HD is expected by the end of December 2025.
* The company plans to submit an application for a new pre-filled syringe filler by January 2026.

The market is closely watching to see if Regeneron can effectively reduce its reliance on its top-selling products while simultaneously defending those existing revenue generators against mounting competitive pressure. The company's stock finds itself at a critical juncture.