The Zacks Analyst Blog Highlights: Regeneron Pharmaceuticals, Sanofi, Pfizer, Bayer and Toyota Motor

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Mar 30, 2012, 11:34 ET

CHICAGO, March 30, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Regeneron Pharmaceuticals Inc. (Nasdaq: REGN), Sanofi (NYSE: SNY), Pfizer (NYSE: PFE), Bayer (OTC: BAYRY) and Toyota Motor Corp. (NYSE: TM).

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Here are highlights from Thursday's Analyst Blog:

Pipeline Progress at Regeneron

Recently, Regeneron Pharmaceuticals Inc. (Nasdaq: REGN) and partner Sanofi (NYSE: SNY) announced encouraging data from two mid-stage studies which evaluated their candidate SAR236553/REGN727 for reducing LDL or bad cholesterol. The companies presented the data at the annual meeting of the American College of Cardiology. REGN727 is a human monoclonal antibody. The antibody binds a protein termed PCSK9.

One of the mid-stage studies (n=183:11565) evaluated patients who had high LDL cholesterol levels (greater than or equal to 100 mg/dL) despite undergoing treatment with Pfizer's (NYSE: PFE) Lipitor. The study evaluated the efficacy of adding Sanofi/Regeneron's candidate to Lipitor across five dosages.

The other study (n=92:11566) evaluated patients suffering from primary hypercholesterolemia. Hypercholesterolemia refers to an increase in LDL cholesterol and has the potential to cause cardiovascular disease.

Results revealed that treatment with Sanofi/Regeneron's significantly reduced LDL cholesterol levels. Encouraged by the positive results, the companies intend to move the candidate into late-stage studies in the second quarter of 2012. Regeneron is developing the candidate under its global antibody partnership with Sanofi. Under the collaboration the companies are co-developing other candidates too such as REGN910, REGN421, REGN728 and REGN668.

More than the antibody pipeline, we believe that investor focus will be on the performance of eye-drug Eylea going forward. The drug, co-developed by Regeneron and the HealthCare unit of Bayer (OTC: BAYRY), was launched in the US in November 2011 for treating patients suffering from neovascular (wet) age-related macular degeneration (wet AMD). The drug was approved in Australia for wet AMD earlier this month.

Apart from wet AMD, Bayer and Regeneron are studying Eylea for other eye-disorders such as central retinal vein occlusion (US target date September 23, 2012), diabetic macular edema and myopic choroidal neovascularization.

Our Recommendation

Currently, we have a Neutral stance on Regeneron in the long run. The company carries a Zacks #2 Rank (Buy rating) in the short run.

Toyota Invests in SUVs in Canada

Toyota Motor Corp. (NYSE: TM) decided to invest $80 million in its Woodstock, Ontario plant in Canada in order to boost output of RAV4 sport utility vehicles (SUVs). The company's decision was led by strong demand for the SUV and an expected recovery in North America.

The investment will create 400 jobs at the plant as Toyota plans to raise the annual production capacity by one third to 200,000 vehicles. Woodstock and other plants in Ontario employ about 6,500 workers. Apart from RAV4, they manufacture the Corolla and Matrix compacts as well as the Lexus RX 350 luxury SUV.

Despite a 23% fall in sales of RAV4, the SUV was ranked 20th among the best-selling vehicles in the U.S. last year. The decrease in sales was attributable to delay in supply of vehicles due to disruptions caused by the earthquake and tsunami in Japan on March 11, 2011.

Sales trend in the U.S. auto industry is much more stable now, indicating an improvement in the broad fundamentals of the economy. Last month, light vehicle sales in the U.S. escalated 15.7% to seasonally adjusted annual rate (SAAR) of 15.1 million units, despite higher gasoline price (up 10% to $3.74 per gallon) and lower spending on discounts and promotions by automakers (down 4.7% to $2,457 per vehicle). This compared with SAAR of 12.8 million vehicles in full year 2011.

Further, the average price of vehicles went up by a robust $1,943 last month compared with February last year, according to TrueCar.com. We believe strong pent-up demand will continue to revive the industry from recessionary lows.

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