Leerink cuts Regeneron to Market Perform on LAG-3 failure, Eylea erosion risk

As previously reported, Leerink downgraded Regeneron (REGN) to Market Perform from Outperform with a price target of $641, down from $792. The firm’s three-turn reduction in its price-to-earnings target from 16 times to 13 times is due to longer-term EPS growth, its fear that Eylea franchise disappointments could drive EPS below consensus in 2026-2027, and sector multiple contraction in recent months due to market rotation. The trigger of Leerink’s downgrade was the failure LAG-3 inhibitor, fianlimab, in first line melanoma after the market close on May 15, and its unchanged U.S. Eylea franchise and Bayer (BAYRY) collaboration projections that are below consensus. The firm sees risk to revenue and EPS downside due to biosimilar competition.