Regeneron Faces Setbacks with Eylea Franchise Amid Changing VEGF Market Dynamics

Regeneron Pharmaceuticals, a leading player in the ophthalmology space, is grappling with significant challenges to its Eylea franchise, as revealed in its recent first-quarter earnings report. The company's flagship product line has encountered a series of obstacles, including declining sales, regulatory hurdles, and shifting market dynamics in the anti-VEGF category.

Eylea Franchise Struggles with Sales Decline and FDA Rejections

Regeneron reported a 26% year-over-year decline in Eylea franchise sales for the first quarter of 2025, with total revenue dropping to $1.04 billion. The standard Eylea formulation saw a particularly steep decline, with U.S. sales plummeting 39% to $736 million, falling short of Wall Street expectations by nearly $100 million.

Adding to the company's woes, Regeneron disclosed two recent setbacks from the U.S. Food and Drug Administration (FDA). The agency rejected the company's application for a prefilled syringe version of Eylea HD, its higher-dose formulation. This rejection came on the heels of another FDA rebuff for extended dosing intervals across all of Eylea HD's approved indications.

CEO Leonard Schleifer acknowledged the "mixed" performance in the first quarter, citing "difficult news related to our retinal franchise." The prefilled syringe rejection, in particular, represents a significant setback for Regeneron's competitive strategy against Roche's Vabysmo.

Market Contraction and Competitive Pressures in Anti-VEGF Category

Regeneron attributes part of its Eylea franchise decline to a broader contraction in the branded anti-VEGF market. The company points to an increase in off-label use of bevacizumab (Avastin) for retinal conditions, likely driven by affordability issues stemming from funding gaps in copay assistance foundations.

This market shift is not unique to Regeneron, as Roche also reported similar trends during its recent earnings call. Despite the overall market contraction, Roche's competing product, Vabysmo, saw an 18% increase in worldwide sales, reaching 1.02 billion Swiss francs ($1.2 billion) in the first quarter.

Regulatory Challenges and Manufacturing Scrutiny

Regeneron's recent regulatory setbacks highlight the increasing scrutiny faced by pharmaceutical companies, particularly in relation to third-party manufacturing. Schleifer suggested that the FDA's rejection of the Eylea HD prefilled syringe was related to issues with a third-party component supplier.

The CEO defended Regeneron's regulatory and manufacturing teams, attributing the challenges to "increased scrutiny by the FDA—post-COVID—on contract manufacturers." He emphasized that the company is working to resolve these issues and expects eventual approval of the prefilled syringe in the U.S., though the timeline remains uncertain.

Despite these challenges, Regeneron remains committed to its Eylea franchise, with ongoing FDA reviews for additional indications and dosing regimens. The company continues to focus on promoting the adoption of Eylea HD, which it believes has the potential to become the new standard of care in retinal disease treatment.