Regeneron's Libtayo Gains FDA Approval for Expanded Use in Skin Cancer Treatment

Regeneron Pharmaceuticals has received a significant boost as the U.S. Food and Drug Administration (FDA) approved an expanded use for its cancer immunotherapy drug, Libtayo. The latest approval allows for the treatment of a wider group of patients with cutaneous squamous cell carcinoma (CSCC), a type of skin cancer.

Expanded Approval and Clinical Trial Results

Libtayo, initially approved in 2018 for advanced CSCC, can now be used in the adjuvant setting for patients who have a high risk of recurrence following surgery and radiation treatment. This expansion is based on impressive clinical trial results, which demonstrated that Libtayo reduced the risk of disease recurrence or death by 68% compared to a placebo.

The drug's efficacy in this new indication could potentially add $1 billion to Libtayo's sales, according to RBC Capital Markets analyst Brian Abrahams. Regeneron is also seeking approval for this expanded use in the European Union, with a decision expected in the first half of 2026.

Regeneron's Strategic Moves Amid Market Challenges

This FDA approval comes at a crucial time for Regeneron, which has faced significant challenges in recent months. The company's shares have lost over 40% of their value in the past year, primarily due to increased competition for its top-selling product, Eylea, an eye disease treatment. Roche's Vabysmo has emerged as a strong competitor, putting pressure on Eylea's market position.

In response to these challenges, Regeneron has been actively expanding Libtayo's market presence. The drug, which originated from a partnership with Sanofi, has seen its sales jump by more than 40% to $1.2 billion last year. In 2022, Regeneron secured global rights to Libtayo through a deal with Sanofi, which included a $900 million upfront payment.

Manufacturing Concerns and Future Outlook

While the latest approval for Libtayo is positive news for Regeneron, it does not fully address some of the company's ongoing concerns. Notably, the FDA application for this expanded use did not include a Catalent filling site in Indiana that has been under FDA scrutiny. This site has impacted two of Regeneron's submissions for other drugs, and investors had hoped that this approval might provide clarity on these manufacturing issues.

Despite these challenges, the expanded approval for Libtayo represents an incremental win for Regeneron. However, as analyst Brian Abrahams notes, it may not have the "broad-reaching implications" that some investors had anticipated, particularly regarding the company's manufacturing challenges and the competitive pressures facing its Eylea franchise.