Biotech giant Regeneron Pharmaceuticals (REGN 0.41%) started 2024 on a strong note and performed well through the first half of the year. However, the drugmaker has since seen its shares decline substantially due to several factors, most notably headwinds related to one of its key growth drivers (more on that later).

Still, many analysts on Wall Street think the correction is way overdone. Regeneron's stock could soar by 50% in the next year from its current levels if we go by its average price target of $1,053 (according to Yahoo! Finance). Should investors rush to buy Regeneron's shares?

The Eylea problem

Regeneron has largely relied on two main products to drive top-line growth in recent years. One is Dupixent, an eczema treatment whose rights it shares with Sanofi, based in France. The other is Eylea, a medicine for wet age-related macular degeneration (an eye disease) that it comarkets with Bayer.

However, Eylea has been facing serious issues in the past two years. It first dealt with stiff competition from Roche's Vabysmo. Regeneron did find a solution, at least somewhat, for Vabysmo's challenge. It developed a high-dose formulation of Eylea that helped decrease the number of annual injections, one of Vabysmo's key selling points.

But Regeneron is now dealing with biosimilar competition for the original Eylea. Amgen recently won a ruling allowing it to launch its biosimilar version of Eylea, Pavblu, while the two entities continue their patent battle in courts. Regeneron still generated strong financial results in the third quarter. Its revenue increased by 11% year over year to $3.72 billion. Combined U.S. sales of Eylea and Eylea HD came in at $1.54 billion, 3% higher than the year-ago period. But Eylea HD accounted for just $392 million of that total.

Having to deal with fewer injections per year is great, but a much lower price -- which is what Pavblu will offer as a biosimilar -- is also an excellent selling point. So, Regeneron's Eylea-related sales and total revenue could start moving in the wrong direction because of this problem.

Potential growth avenues

Thankfully, Regeneron's other growth driver, Dupixent, is doing fine. In the third quarter, the medicine's total worldwide revenue, recorded by Sanofi, increased by 23% year over year to $3.82 billion. In September, the U.S. Food and Drug Administration (FDA) gave the green light to Dupixent in treating COPD, an indication that could add several billion dollars in annual sales to the therapy. So, Dupixent should continue its upward path next year. It might even grow its sales faster since the COPD indication in the U.S. is still so fresh.

Regeneron's lineup also features Libtayo, a cancer medicine whose rights it shares with its Dupixent partner, Sanofi. Libtayo's third-quarter sales came in at $289 million, up 24% compared to the year-ago period. It should also maintain strong growth next year. Further, Regeneron has a deep pipeline and expects several key data readouts in 2025. One of them will be for itepekimab, a potential medicine for COPD in former smokers that is undergoing phase 3 studies. Libtayo and Dupixent could deliver data readouts supporting new indications, too. These developments could put some life back into Regeneron's stock.

Is Regeneron's stock a buy?

The most important potential catalyst for Regeneron would be a win in its patent infringement case against Amgen. If that happens in 2025, Regeneron could meet the Street's average price target. However, no one knows whether that will be the case's outcome, so it's hard to bet on Regeneron rising by 50% in the next 12 months. And if Regeneron loses its case, its revenue could decrease for at least several quarters. The market does not like uncertainty.

So, what's the verdict? In my view, it depends on each person's horizon. Even with the Eylea-related issue, the rest of Regeneron's lineup -- Dupixent and Libtayo -- are winners. Further, the drugmaker should develop several more blockbusters, particularly in oncology, where it has been looking to increase its presence. Regeneron is also doing important work in gene therapy and gene editing.

Investors expecting the company to bounce back next year might be disappointed. But those willing to hold onto Regeneron's shares for more than five years could earn strong returns.