When Regeneron (NASDAQ:REGN) traded in the $600 – $660 range, its antiviral cocktail attracted COVID-19 biotech investors. And although U.S. President Donald Trump received timely treatment, markets lost interest in the stock.
REGN stock closed at below $500 last week. At that price, and with Moderna (NASDAQ:MRNA) at $157, Moderna has a higher market cap than Regeneron. Regeneron’s performance is similar to that of Gilead Sciences (NASDAQ:GILD). Gilead’s Remdesovir is a goodwill product. Because it will not make any profits for Gilead, markets are avoiding Gilead. Besides, Gilead’s billion-dollar acquisitions are viewed as risky.
Regeneron did not acquire any companies that would lower its cash balance or add debt to the firm. Dupixent is still a blockbuster drug that treats asthma and atopic dermatitis.
Governments are likely to select Moderna as the first choice for coronavirus vaccination. The billions in doses will add that much in revenue, too. But markets are not assigning a high value to Regeneron’s development in cancer research and its revenue from treating many diseases.
Moderna is in high valuation territory. It has no room to stumble, whereas Regeneron is trading at a discount at current levels. Investors should consider starting a small position in Regeneron, betting on a rebound to follow.