Regeneron Pharmaceuticals, Inc. (REGN) shares moved higher after new data for Praluent® – a drug developed in partnership with Sanofi SA (SNY) – showed that high-risk patients taking the drug reduced their risk of death. In particular, high-risk patients saw a 24% reduction in cardiovascular events and a 29% reduction in mortality. The data could help encourage insurers to prescribe the drug and ultimately increase sales.
Analysts had a mixed response to the Praluent® study as well as the establishment of a lower price point that could help capture market share. Baird analysts were the most bullish, with an Outperform rating and a $408.00 price target, saying that the drug would be cost effective for patients but noting that it could lead to a price war with Amgen Inc. (AMGN) and its Repatha®. Barclays analysts were the most negative, with an Underweight rating and a $315.00 price target, saying that Regeneron Pharma's new strategy was unlikely to improve sales. (See also: Regeneron/Sanofi Offer New Praluent Pricing to Break Reimbursement Logjam.)
From a technical standpoint, Regeneron Pharma stock rebounded from its lows made last month, past its pivot point at $334.99 and toward its 50-day moving average. The relative strength index (RSI) has been on the rise but remains neutral at 54.63, while the moving average convergence divergence (MACD) has posted an impressive recovery following its bullish crossover. These dynamics suggest that the stock could continue its rise over the coming sessions.
Traders should watch for a breakout from the 50-day moving average at $352.35 and R1 resistance at $356.44 toward trendline resistance and R2 resistance at around $392.45. On the other hand, a breakdown from the pivot point at $334.99 could mean a move down to retest prior lows and trendline support at around $318.00. The bullish MACD and moderate RSI suggest that the former scenario may be the most likely to occur. (For more, see: 3 Biotech Stocks Facing Steep Declines Ahead.)
Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.