Regeneron will lose out on hundreds of millions of dollars if a rival to its top-selling drug performs the way Wall Street expects. Even more would be at risk if recently proposed changes to government insurance become a reality.

In these situations, when a drugmaker's biggest product is under fire, acquisitions can look like an attractive way to put out the flames. AbbVie's $63 billion bid to acquire Allergan stems almost entirely from the buyer trying to find new revenue streams before generics start eating away at its mega-blockbuster drug, Humira.

But Regeneron isn't like other drugmakers. In the 30 years since its founding, it has never acquired another company. Though Regeneron isn't completely shut off to the idea of doing M&A, there's little to indicate the biotech is actively trying to change its deal track record.

Regeneron maintains that it doesn't need to buy drugs because of its R&D skills. Under the direction of CEO Len Schleifer and Chief Scientific Officer George Yancopoulos, the biotech has brought seven new medicines to market, including five from a long-standing partnership with Sanofi.

"When I look at Gilead, for example, or even Biogen [there is] a lot of investor pressure to buy something," Evan Seigerman, a Credit Suisse analyst, told BioPharma Dive. "Regeneron is still good at telling the narrative that 'we can develop our own assets and we have the best capabilities, so we're not going to buy anything.'"

The biggest of those assets is Eylea, a drug for multiple eye diseases that hit $6.75 billion in global sales last year.

For 2019, the average Wall Street estimate has Eylea reaching $7.43 billion in sales. For 2020 and beyond, however, analysts are torn about how it will fare in light of a new competitor.

*Selection of four investment bank forecasts for global Eylea sales

Earlier this month, Novartis began selling in the U.S. a drug for wet AMD, an age-related vision loss disease for which Eylea is also approved. Novartis on its third quarter earnings call touted how the drug, Beovu, is off to a strong launch, though the company didn't provide sales numbers.

While some analysts initially viewed Beovu's label as weaker than expected Christopher Raymond of Piper Jaffray called the drug "little more than an also-ran" it is still poised to steal market share from Eylea. Just how much share is the big question facing Regeneron.

RBC Capital Markets' research team said it recently spoke with an eye specialist who plans on switching one-third of her Eylea-treated wet AMD patients to Beovu. On a broader scale, the American Society of Retina Specialists found in a recent survey of 1,009 people from ophthalmology organizations that 50% plan on prescribing Beovu for wet AMD patients who don't adequately respond to drugs like Eylea or Roche's Lucentis.

Beovu may not be the only challenge to Eylea, either. President Donald Trump and Democrats in the House of Representatives have pitched different plans that would affect how Medicare pays for certain drugs. Medicare Part B spends more on Eylea than any other drug, leaving it particularly exposed if changes to government insurance take shape.

Amid these uncertainties, Regeneron's share price has fallen 16% since the beginning of the year. By contrast, the Nasdaq Biotechnology Index, which includes Regeneron, rose 13% over the period.

"They really do have quite a successful R&D engine," Kennen MacKay of RBC said. "But with the stock trading where it is, maybe there's a feeling that's no longer enough."

Jacob Bell / BioPharma Dive, market data

Regeneron's success is tied to its prowess in developing monoclonal antibodies a type of drug that, while a novelty in the past, is now a mainstay of many drugmakers' pipelines.

Some on Wall Street fret that Regeneron's competitive edge may have weakened as more companies entered this space. Last month, Geoffrey Porges of SVB Leerink went so far as to pose the provocative question: "Is Regeneron becoming the TiVo of biopharma?"

Whether or not those worries are valid, analysts can't envision Regeneron buying anything because that would be so out of character.

"These companies really do have a certain genetic makeup of what they're about, especially Regeneron," Cowen & Co.'s Yaron Werber told BioPharma Dive. "Doing M&A is not something that's in their DNA."

The threats to Eylea are therefore unlikely big enough or realized enough to push Regeneron toward acquisitions. According to consensus figures provided by Credit Suisse, analysts envision sales of the eye drug growing over the next year in spite of Beovu, as it takes greater market share in areas like diabetic macular edema.

Investors also have other bright spots to keep their attention off M&A. Dupixent, a treatment for eczema and asthma, achieved triple-digit growth over the last year and could help offset future hits to Eylea.

Regeneron's pipeline drugs, meanwhile, face significant competition.Roche and Amgen are working on rival cancer agents, while Merck & Co., Bristol-Myers Squibb and Alexion Pharmaceuticals already market blockbuster drugs for diseases that Regeneron is targeting.

"There's a deep pipeline, but it's lacking that one disruptive product that investors always want to see," Werber said. "It's a pipeline that still is getting defined."

Regeneron could find that disruptive product through bets on newer technologies. The company entered a gene editing deal with Intellia Therapeutics in 2016, a cell therapy deal with Bluebird bio in 2018, and an RNA-focused deal with Alnylam Pharmaceuticals this April.

"There's nothing inherently good about doing M&A."

Nouhad Husseini

Head of Business Development, Regeneron

While Regeneron has favored partnerships to acquisitions, it could do the latter if it wanted. By the end of June, the company held just over $1 billion in cash and cash equivalents and another $4.5 billion in marketable securities.

"The deal we did with Alnylam, or Intellia, or any of our partners where we're accessing external innovation, we could have just as easily decided to acquire one of those companies," Nouhad Husseini, Regeneron's head of business development, said in an interview.

Husseini holds reservations about outright acquisitions, though he said he could see Regeneron buying something in the short- or medium-term. Collaborations have worked out well, he notes, because both sides can stay focused on the science without getting distracted by the upheaval that often comes from M&A.

"The way I look at it is: M&A and doing a partnering deal, it's shades of gray and there are pros and cons. It's a way of structuring the deal, nothing more than that," Husseini said. "We really value these companies who have this independent entrepreneurial spirit, and I've seen firsthand what happens when big companies come in and acquire these little companies."

Scientific independence is a value shared by other biotech dealmakers as well.

Gilead and Galapagos structured their $5.1 billion research deal so the smaller company would remain a motivated partner, according to Gilead CEO Daniel O'Day. Gilead also announced in May that it will keep separate its cell therapy subsidiary, Kite Pharma, which O'Day reasoned would improve efficiency.

Jeffrey Leiden, the CEO of Boston-based Vertex, told BioPharma Dive earlier this year that he planned on letting Semma Therapeutics, which Vertex had just acquired for $1 billion, operate with more autonomy because of the target company's leadership team and expertise in stem cell-derived therapies.

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Pharmacquired: Eylea could be in trouble, but that doesn't make Regeneron a buyer - BioPharma Dive

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