Regeneron (REGN) Q4 2025 earnings review
Dupixent Masks a Shrinking Core
Regeneron's Q4 results present a stark dichotomy. The Sanofi collaboration (Dupixent) is firing on all cylinders, propelling total revenue up 3% to $3.88B despite a 16% collapse in Regeneron's own Net Product Sales. The EYLEA franchise transition is proving painful: while EYLEA HD surged 66% YoY, it failed to offset the 52% freefall in legacy EYLEA, resulting in a 28% franchise decline. Combined with 2026 guidance pointing to gross margin compression (83-84%) and aggressive R&D spending, earnings power is under pressure, with Non-GAAP EPS falling 5% to $11.44.
🐂 Bull Case
Dupixent global sales grew 34% YoY to $4.9B, accelerating from +27% in Q3. Approvals in COPD and CSU are expanding the addressable market by millions of patients, and the $1.64B in collaboration profit is high-margin revenue that now anchors the P&L.
EYLEA HD sales hit $506M in Q4, up from $431M in Q3 and $393M in Q2. It now represents nearly 47% of the U.S. franchise. The recent approval of a new vial filler removes a key supply bottleneck, setting the stage for smoother commercialization in 2026.
🐻 Bear Case
The transition strategy is net-negative. Total U.S. EYLEA franchise sales fell 28% YoY ($1.08B vs $1.50B). EYLEA HD gains ($201M added YoY) are being swamped by legacy EYLEA losses ($613M lost YoY) due to competition and pricing pressure.
2026 guidance forecasts Non-GAAP gross margins of 83-84%, a notable step down from the ~88% seen in 2024 and 86% in 2025. Coupled with a forecasted rise in R&D spend to ~$6B (Non-GAAP), operating leverage is turning negative.
⚖️ Verdict: 🔴
Bearish. While Dupixent is a masterpiece of commercial execution, Regeneron's internal product engine is sputtering. The core EYLEA franchise is shrinking rapidly, margins are guiding lower, and earnings growth has turned negative (-5% EPS). Until the EYLEA franchise finds a floor, the stock lacks a catalyst beyond Sanofi's performance.
Key Themes
EYLEA Franchise Erosion Accelerates
The 'transition' narrative is failing to hold revenue steady. Combined U.S. sales of EYLEA and EYLEA HD dropped 28% YoY. While HD grew nicely to $506M, legacy EYLEA collapsed by 52% ($613M decline). The company cited 'competitive pressures' and 'lower net selling price' as drivers. Even a $30M inventory tailwind in Q4 couldn't hide the weakness.
Dupixent: The $17.8B Anchor
Dupixent remains the undisputed bright spot. Global net sales reached $17.8B for FY2025 (+26%). In Q4, growth accelerated to 34% ($4.9B), driven by new indications (COPD, CSU). Regeneron's share of profits surged 35% to $1.49B, effectively subsidizing the decline in the internal product portfolio.
2026 Profitability Squeeze
Forward guidance indicates a structural reset in profitability. Non-GAAP Gross Margin is guided to 83-84% for 2026, down from 86% in 2025 and 88% in 2024. Simultaneously, Non-GAAP R&D is guided to $5.9-6.1B, a ~17% increase at the midpoint vs FY2025 ($5.15B). This 'jaws' effect—lower gross margins and higher OPEX—will pressure operating margins significantly.
Manufacturing & Regulatory Overhang Persists
While a new vial filler for EYLEA HD was approved (resolving one bottleneck), the Pre-Filled Syringe (PFS)—critical for competing with Vabysmo—remains delayed until at least Q2 2026. The company submitted a new application in Dec 2025, but this gap leaves EYLEA HD at a convenience disadvantage for another 6 months.
Libtayo Continues Steady Climb
Libtayo offers a secondary growth narrative, with global sales up 16% YoY to $425M. The recent approval for adjuvant CSCC (first and only immunotherapy in this setting) solidifies its niche dominance, helping offset the precipitous drop in other internal products.
Other KPIs
Reversing. For the first time, Collaboration Revenue ($1.97B) has decisively overtaken Net Product Sales ($1.67B). Regeneron is morphing from a product company into a royalty/partnership holding company, which changes the valuation multiple profile.
Decelerating. Down 8% YoY. Despite top-line growth, the bottom line is shrinking due to lower product gross margins and a higher tax rate (19.1% vs 4.2% in 24Q4).
Aggressive. Regeneron utilized significant cash flow to buy back stock, with $671M in Q4 alone. $1.5B remains on the authorization. This capital return is the primary defense against EPS dilution from falling net income.
Guidance
Decelerating. Down from ~86% in 2025 and 88% in 2024. Management cites product mix and manufacturing investments. This is a material headwind to profitability.
Accelerating. Represents a ~17% increase at the midpoint vs 2025 ($5.15B). While this funds the pipeline (Factor XI, obesity), it significantly outpaces revenue growth.
Accelerating. Up from $2.31B in 2025 (~11% increase), likely supporting new launches (COPD, CSCC) and the EYLEA HD push.
Stable vs 2025 (13.9%), but significantly higher than the 2024 baseline (7.7%), creating a permanent drag on EPS growth comparisons.
Key Questions
EYLEA Franchise Floor
Total EYLEA franchise sales declined 28% YoY in Q4. With EYLEA HD now at nearly 50% of the mix, do you expect the franchise revenue to stabilize in 2026, or should we model continued aggregate declines until the PFS launches in Q2?
Gross Margin Contraction
Guidance implies a 200-300bps contraction in Non-GAAP gross margins for 2026. Is this a structural reset due to the EYLEA HD royalty/manufacturing profile, or a temporary dip due to capacity investments?
R&D Spending Discipline
You are guiding for a ~17% increase in R&D spend while Net Product Sales are shrinking. Can you explicitly rank the top 3 programs driving this increase, and when do you expect operating leverage to turn positive again?
Pre-Filled Syringe Confidence
Regarding the EYLEA HD PFS application submitted in Dec 2025: Given the previous CRL and manufacturing issues, what level of confidence do you have in the Q2 2026 approval timeline, and are there any outstanding facility inspections required?