Regeneron Pharmaceuticals (REGN:NASDAQ) completes pivotal Phase III trial… receives fast-track status from FDA… and rises 34% in the Taipan portfolio

It’s been a pretty good start of the year for Regeneron Pharmaceuticals (REGN:NASDAQ).

On January 7, the company announced that the U.S. Food and Drug Administration (FDA) had granted "fast track" designation to an important component of the development program of Axokine, Regeneron’s drug for obesity.

On the same day, it announced the completion of the 12-month placebo-controlled portion of its Phase III pivotal trial designed to assess the efficacy and safety of Axokine for weight loss in overweight and obese subjects.

As a result, the stock has rallied–up 16% since January 2… and up 34% since our recommendation.

What does it mean?

When I say that Regeneron could have a blockbuster on its hands, that’s exactly what I mean.

The FDA granted Regeneron’s anti-obesity drug–Axokine–fast track status because of the continuing fat epidemic in the United States.

Current statistics put the obesity epidemic in the U.S. at 120 million people.

That’s a potentially huge market.

The heaviest of the heavy

The FDA grants fast track designation to a therapeutic development program that the agency determines has the potential to address an unmet medical need in treating serious or life-threatening disease conditions.

Assuming the best-case scenario for Axokine, the drug could be approved in a year.

However, if it were approved, it would probably be allowed to treat only the morbidly obese–those patients who are so overweight, they’re literally on a countdown to death.

The fast track designation covers treatment of severely obese people who are unresponsive to, intolerant of, or unsuitable candidates for certain FDA approved medicines for long-term treatment of obesity. As part of its ongoing development program for Axokine, Regeneron plans to study the use of Axokine in this patient population.

With that said, I anticipate Regeneron to be on the receiving end of positive coverage from the Johnny-come-lately crowd.

With the technology sector in a complete wreck, biotech and medical technologies are the only two sectors where speculation in emerging cures and treatment will pay off for aggressive traders.

I continue to rate Regeneron Pharmaceuticals (REGN:NASDAQ) a buy at up to US$23 a share.