QPD In Action – 1Q25

QPD In Action – 1Q25

This quarter we feature a biotech powerhouse with brains and balance.

Regeneron Pharmaceuticals (RGEN)

Leader in inflammation, ophthalmology, oncology, and cardio/metabolic therapeutics, with 13 approved drugs – including five blockbuster products generating over $1 billion each in sales.

Key Facts

  • Its “pipeline in a product” strategy provides a robust growth engine, while a disciplined, distribution-light, model allows for reinvestment in innovation.
  • With ten late-stage product data releases or product launches set for 2025–2026 and a strong balance sheet, Regeneron is well-positioned to drive continued value creation.

Why We Like Regeneron

  • Cambiar recognizes the company’s strong R&D-driven foundation, high-margin business model, and compelling long-term growth potential.

 

QUALITY

PRICE

DISCIPLINE
Regeneron is consistent with Cambiar’s stringent quality underwriting policy, including:

  • High returns: ROIC ~25%, resilient through Covid cycle.
  • Strong balance sheet: $13.9B excess cash, ~16% of share price.
  • Robust pipeline: 10 late-stage product data releases or product launches in ’25-’26.

 

Cambiar identified an attractive entry point based on:

  • Stock trading near 10-year low P/E ratio.
  • Recorded high free cash flow ratio (FY 2024).

 

 

 
  • Near-term earnings uncertainty related to EYLEA conversion drove a price/valuation reset, providing a solid entry point for a high-quality large-cap biopharma.
  • We believe earnings concerns are temporary given strength and diversity of overall pipeline, which should drive a recovery in margins and accelerating earnings growth in 2026-2027.

 

SECURITY FOUND IN FOLLOWING PORTFOLIO: Large Cap Value
SPONSORING ANALYST: Rich Carney

 

 

Disclosures

Certain information contained in this communication constitutes “forward-looking statements”, which are based on Cambiar’s beliefs, as well as certain assumptions concerning future events, using information currently available to Cambiar.  Due to market risk and uncertainties, actual events, results or performance may differ materially from that reflected or contemplated in such forward-looking statements. The information provided is not intended to be, and should not be construed as, investment, legal or tax advice.  Nothing contained herein should be construed as a recommendation or endorsement to buy or sell any security, investment or portfolio allocation.  Securities highlighted or discussed have been selected to illustrate Cambiar’s investment approach and/or market outlook and are not intended to represent the performance or be an indicator for how the accounts have performed or may perform in the future. The portfolios are actively managed and securities discussed may or may not be held in client portfolios at any given time.

Any characteristics included are for illustrative purposes and accordingly, no assumptions or comparisons should be made based upon these ratios. Statistics/charts may be based upon third-party sources that are deemed to be reliable; however, Cambiar does not guarantee its accuracy or completeness.  Past performance is no indication of future results.  All material is provided for informational purposes only, and there is no guarantee that the opinions expressed herein will be valid beyond the date of this communication.

Source: Cambiar Analysis & Regeneron company disclosure