Regeneron Pharmaceuticals Inc. (REGN) wrapped up 2025 with a solid fourth quarter, even though its flagship eye drug is taking some hits. The biotech reported adjusted earnings of $11.44 per share on Friday, down 5% from the prior year but comfortably ahead of Wall Street's $10.71 consensus estimate.
Revenue came in at $3.88 billion, up 3% year-over-year and topping the $3.79 billion analysts expected. Not bad for a company navigating some serious competitive turbulence in one of its biggest franchises.
The Eylea Problem: Competition and Affordability Collide
Here's where things get interesting. U.S. sales for the combined Eylea franchise—which includes both the original Eylea and the newer high-dose Eylea HD—plunged 28% to $1.08 billion in the quarter. Eylea HD brought in $506 million while the legacy version contributed $577 million.
What's eating into Eylea's market share? A few things. First, there's intensifying competition in the eye disease treatment space. Second, and perhaps more telling, patients are increasingly turning to compounded bevacizumab—essentially a cheaper alternative—because they simply can't afford the branded options. Add in the ongoing shift from regular Eylea to Eylea HD, plus declining net selling prices, and you've got a perfect storm of margin pressure.
Regeneron is fighting back with regulatory moves. The FDA approved Eylea HD in November 2025 for macular edema following retinal vein occlusion, with dosing intervals stretching up to every eight weeks after initial monthly treatment. The agency also greenlit a monthly dosing option for patients who need more frequent administration across approved uses.
There's more in the pipeline. Regeneron submitted an application in December 2025 to add a new manufacturer for Eylea HD prefilled syringes. The FDA is expected to make a decision sometime in Q2 2026, which could help address supply and cost dynamics.
Dupixent Picks Up the Slack
While Eylea stumbles, the company's partnership with Sanofi (SNY) is delivering. Collaboration revenue jumped thanks to higher profit-sharing from antibody commercialization—$1.486 billion for the quarter and $5.242 billion for full-year 2025.
The driver here is Dupixent, which continues its blockbuster trajectory. Rising sales of the inflammatory disease treatment more than compensated for Eylea's weakness, proving the value of a diversified pipeline.
Betting Big on U.S. Manufacturing
Regeneron isn't just managing today's challenges—it's planning for tomorrow's capacity needs. Beyond the previously announced domestic investments exceeding $7 billion, the company unveiled plans for a roughly $2 billion bulk manufacturing facility in Saratoga Springs, New York.
This isn't a small expansion. The facility will create approximately 1,000 high-paying jobs and substantially boost the company's manufacturing capabilities. It's a significant vote of confidence in long-term demand for Regeneron's biologics portfolio.
Looking Ahead to 2026
Management laid out its expectations for the coming year. The company projects a GAAP gross margin between 79% and 80% for fiscal 2026, with adjusted gross margin landing in the 83% to 84% range.
On spending, Regeneron forecasts adjusted research and development expenses of $5.9 billion to $6.1 billion in 2026. Non-GAAP selling, general, and administrative costs should run between $2.5 billion and $2.65 billion.
That R&D figure is worth noting—it signals continued aggressive investment in pipeline development even as the company navigates Eylea's competitive pressures. When a biotech keeps spending on innovation during tough times for a major product, it usually means management sees meaningful opportunities ahead.
Regeneron shares traded down 0.32% at $747.05 on Friday following the earnings release.
