Cramer: Don't buy Regeneron stock just because Trump says its coronavirus antibody cocktail works

CNBC's Jim Cramer advised investors on Thursday to not buy shares of Regeneron Pharmaceuticals simply because President Donald Trump touted the company's potential coronavirus treatment. 

Regeneron's stock was 2% higher Thursday. In a video Wednesday, Trump claimed that Regeneron's experimental antibody treatment for Covid-19, which he received for his illness, was "a cure." 

"Please don't buy Regeneron today," Cramer said on "Squawk on the Street," tamping down expectations about the effectiveness of the antibody treatment and the potential boost it would provide to the company's earnings. "You want to maybe think more about Regeneron because it's got good science. That's fine," he added. 

Cramer has long been a fan of the Regeneron, recommending investors buy it when it was around $5 per share. It closed Wednesday's session at $591.69, a nearly 5% rise since Trump disclosed his Covid-19 diagnosis in the early morning hours of Friday. Regeneron's Dr. Len Schleifer was the first CEO to appear on Cramer's show "Mad Money" in 2005. 

"It's really Dupixent. It's [Regeneron's] drug that is for all sorts of different ailments involving inflammation that is far more important to owning the stock," Cramer said.

Despite Trump's pronouncement about the antibody drug, there is still only early data available surrounding its potential effectiveness as a treatment. Additionally, Trump received other treatments for the coronavirus, such as Gilead Sciences' antiviral remdesivir, so it's difficult to ascertain the impact of any one drug when not received in a randomized clinical trial. 

"I feel like the president has created a false expectation, even though it is pretty good," Cramer said. 

Trump received the antibody cocktail for his case of Covid-19 on a compassionate use basis. But on Wednesday, Regeneron announced it has applied for emergency use authorization with the Food and Drug Administration. The Tarrytown, New York-based company said in a statement that the U.S. government has committed to make doses of the antibody cocktail "available to the American people at no cost," should its EUA application approved. 

Cramer said that is a key piece of information investors need to remember when they consider whether to buy the stock, even though he thinks "Regeneron is a great company." 

"They did make money. They got paid by the government," Cramer said. "[But] this is not like they're suddenly making Humira, the greatest selling drug of all time, or they're not making Keytruda."

Humira from AbbVie is used to treat conditions including rheumatoid arthritis, plaque psoriasis and Crohn's disease. Keytruda, made by Merck, is an immunotherapy drug used to help fight certain cancers.

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