Regeneron Pharmaceuticals, Inc. (NASDAQ:
REGN)
today announced financial results for the first quarter of 2024 and
provided a business update.
"The Regeneron team has already made substantial progress this
year, delivering our approved medicines to more patients around the
globe, advancing our pipeline consisting of dozens of
clinical-stage programs, and relentlessly pursuing cutting-edge
science," said Leonard S. Schleifer, M.D., Ph.D., Board co-Chair,
President and Chief Executive Officer of Regeneron. "We had a
strong quarter of EYLEA HD uptake, and we are well positioned to
continue our leadership in retinal diseases. Dupixent continues to
grow at a remarkable pace seven years into its launch and is
currently treating over 850,000 patients across a variety of
diseases characterized by type 2 inflammation. Our promising
oncology franchise is strengthening, driven by strong global growth
in Libtayo sales and potential regulatory approvals later this year
for linvoseltamab in relapsed/refractory multiple myeloma."
Financial Highlights
($ in millions, except per
share data) |
|
Q1 2024 |
|
Q1 2023 |
|
% Change |
Total revenues |
|
$ |
3,145 |
|
|
$ |
3,162 |
|
|
(1% |
) |
Total revenues excluding
Ronapreve(a)(b) |
|
$ |
3,145 |
|
|
$ |
2,940 |
|
|
7% |
|
GAAP net income |
|
$ |
722 |
|
|
$ |
818 |
|
|
(12% |
) |
GAAP net income per share -
diluted |
|
$ |
6.27 |
|
|
$ |
7.17 |
|
|
(13% |
) |
Non-GAAP net income(a) |
|
$ |
1,116 |
|
|
$ |
1,168 |
|
|
(4% |
) |
Non-GAAP net income per share
- diluted(a) |
|
$ |
9.55 |
|
|
$ |
10.09 |
|
|
(5% |
) |
|
|
|
|
|
|
|
|
|
|
|
|
"We are off to a strong start in 2024 as reflected in our solid
first quarter financial results and the progress we have made
across our growing pipeline," said Christopher Fenimore, Senior
Vice President, Finance and Chief Financial Officer of Regeneron.
"While investing in innovation remains our top capital allocation
priority, the recent authorization by Regeneron's board of
directors of a new $3.0 billion share repurchase program provides
us with additional flexibility to continue returning capital to
shareholders over time."
Business Highlights
Key Pipeline ProgressRegeneron has over 35
product candidates in clinical development, including a number of
marketed products for which it is investigating additional
indications. Updates from the clinical pipeline include:
EYLEA HD (aflibercept) 8 mg
- In January 2024, the European Commission (EC) and Japan's
Ministry of Health, Labour and Welfare (MHLW) each approved EYLEA 8
mg (known as EYLEA HD in the United States) for the treatment of
patients with wet age-related macular degeneration (wAMD) and
diabetic macular edema (DME).
- In January 2024, the United States Centers for Medicare &
Medicaid Services (CMS) assigned a permanent and product-specific
J-code (J0177) for EYLEA HD, which became effective on April 1,
2024. J-codes simplify and streamline the billing and reimbursement
processes for Medicare Part B treatments, allowing for efficient
claims processing.
Dupixent (dupilumab)
- The U.S. Food and Drug Administration (FDA) accepted for
priority review the supplemental Biologics License Application
(sBLA) for Dupixent as an add-on maintenance treatment in adult
patients with uncontrolled chronic obstructive pulmonary disease
(COPD) and evidence of type 2 inflammation. A regulatory
application is also under review in the European Union (EU) and
Japan.
- A Phase 3 study for Dupixent in asthma for children aged 2 to 5
years was initiated.
- In February 2024, the MHLW in Japan approved Dupixent for the
treatment of chronic spontaneous urticaria (CSU) in adults and
children aged 12 years and older whose disease is not adequately
controlled with existing therapy. A regulatory application has also
been submitted in the EU.
Oncology Programs
- The FDA accepted the BLA seeking accelerated approval for
linvoseltamab, a bispecific antibody targeting BCMA and CD3, to
treat adult patients with relapsed/refractory (R/R) multiple
myeloma that has progressed after at least three prior therapies,
and the BLA was granted priority review with a target action date
of August 22, 2024. A Phase 3 confirmatory trial is currently
enrolling patients. A regulatory application is also under review
in the EU.
- In April 2024, the Company presented positive pivotal data from
the Phase 1/2 trial of linvoseltamab in patients with R/R multiple
myeloma at the American Association for Cancer Research (AACR)
Annual Meeting 2024. The linvoseltamab data reinforced previously
shared findings and included a 71% objective response rate (ORR),
with 46% of patients achieving a complete response (CR) or
better.
- In March 2024, the FDA issued Complete Response Letters (CRLs)
for the BLA for odronextamab, a bispecific antibody targeting CD20
and CD3, in R/R follicular lymphoma (FL) and R/R diffuse large
B-cell lymphoma (DLBCL). The only approvability issue cited in the
CRLs is related to the enrollment status of the confirmatory
trials. The CRLs (one for R/R FL and one for R/R DLBCL) did not
identify any approvability issues with the clinical efficacy or
safety, trial design, labeling, or manufacturing. A regulatory
application for R/R DLBCL and R/R FL remains under review in the
EU.
- In 2023, the Company initiated a Phase 2/3 study of the
combination of fianlimab, an antibody to LAG-3, and Libtayo
(cemiplimab) in first-line metastatic melanoma. This study is
enrolling faster than expected and will be conducted solely as a
Phase 3 study with the final analysis to be reported during
2025.
Other Programs
- The FDA has extended the approval of Praluent® (alirocumab) as
an adjunct to diet and other low-density lipoprotein cholesterol
(LDL-C) lowering therapies to include pediatric patients aged 8
years and older with heterozygous familial hypercholesterolemia
(HeFH).
- A Phase 2 study for itepekimab, an antibody to IL-33, for
non-cystic fibrosis bronchiectasis (NCFB) was initiated.
- A Phase 2 study for ALN-APP, an investigational RNAi
therapeutic targeting amyloid precursor protein (APP), was
initiated by the Company's collaborator Alnylam Pharmaceuticals,
Inc. in patients with cerebral amyloid angiopathy (CAA).
Corporate and Business Development Updates
- In April 2024, the Company acquired full development and
commercialization rights to 2seventy bio, Inc.'s oncology and
autoimmune preclinical and clinical stage cell therapy pipeline.
Under the terms of the agreement, the Company made a $5 million
up-front payment, and has assumed ongoing program, infrastructure,
and personnel costs related to the product candidates acquired. In
addition, the Company is obligated to pay 2seventy bio a regulatory
milestone upon the first major market approval of the first
approved product; and, with respect to any approved product, a low
single-digit percent royalty on sales.
- In April 2024, the Company and Mammoth Biosciences, Inc.
entered into a collaboration agreement to research, develop, and
commercialize in vivo CRISPR-based gene editing therapies for
multiple tissues and cell types. Under the terms of the agreement,
the Company purchased an aggregate of $95 million of Mammoth
preferred stock and is obligated to make a $5 million up-front
payment. The parties will jointly select and research collaboration
targets, and then Regeneron will lead development and
commercialization.
- In April 2024, the Company's board of directors authorized a
new share repurchase program to repurchase up to an additional $3.0
billion of the Company's common stock. Repurchases may be made from
time to time at management's discretion through a variety of
methods. The program has no time limit and can be discontinued at
any time.
First Quarter 2024 Financial
ResultsRevenues
($ in millions) |
|
Q1 2024 |
|
Q1 2023 |
|
% Change |
Net product sales: |
|
|
|
|
|
|
EYLEA HD - U.S. |
|
$ |
200 |
|
|
$ |
— |
|
|
* |
|
EYLEA - U.S. |
|
|
1,202 |
|
|
|
1,434 |
|
|
(16% |
) |
Total EYLEA HD and EYLEA - U.S. |
|
|
1,402 |
|
|
|
1,434 |
|
|
(2% |
) |
Libtayo - Global |
|
|
264 |
|
|
|
177 |
|
|
49% |
|
Praluent - U.S. |
|
|
70 |
|
|
|
40 |
|
|
75% |
|
Evkeeza® - U.S. |
|
|
24 |
|
|
|
15 |
|
|
60% |
|
Inmazeb® - Global |
|
|
1 |
|
|
|
2 |
|
|
* |
|
Total net product sales |
|
|
1,761 |
|
|
|
1,668 |
|
|
6% |
|
|
|
|
|
|
|
|
|
Collaboration revenue: |
|
|
|
|
|
|
|
Sanofi |
|
|
910 |
|
|
|
798 |
|
|
14% |
|
Bayer |
|
|
356 |
|
|
|
357 |
|
|
—% |
|
Other |
|
|
1 |
|
|
|
223 |
|
|
(100% |
) |
Other revenue |
|
|
117 |
|
|
|
116 |
|
|
1% |
|
Total revenues |
|
$ |
3,145 |
|
|
$ |
3,162 |
|
|
(1% |
) |
|
|
|
|
|
|
|
* Percentage not meaningful |
|
Net product sales of EYLEA in the U.S. decreased in the first
quarter of 2024, compared to the first quarter of 2023, primarily
due to changing market dynamics, resulting in lower volumes and a
lower net selling price. In addition, aggregate net product sales
of EYLEA and EYLEA HD in the first quarter of 2024 were negatively
impacted by approximately $40 million due to a sequential net
reduction in wholesaler inventory.
Sanofi collaboration revenue increased in the first quarter of
2024, compared to the first quarter of 2023, primarily due to the
Company's share of profits from commercialization of antibodies,
which were $804 million in the first quarter of 2024, compared
to $637 million in the first quarter of 2023. The change in
the Company's share of profits from commercialization of antibodies
was driven by higher profits associated with an increase in
Dupixent sales.
The decrease in other collaboration revenue in the first quarter
of 2024, compared to the first quarter of 2023, was due to lower
sales of Ronapreve. Under the Company's Roche collaboration
agreement, the Company records collaboration revenue in connection
with payments from Roche attributable to gross profits from sales
of Ronapreve; however, the Company does not expect any additional
Roche collaboration revenue from Ronapreve in future periods.
Refer to Table 4 for a summary of collaboration revenue.
Operating Expenses
|
|
GAAP |
|
%Change |
|
Non-GAAP(a) |
|
%Change |
($ in millions) |
|
Q1 2024 |
|
Q1 2023 |
|
|
Q1 2024 |
|
Q1 2023 |
|
Research and development (R&D) |
|
$ |
1,248 |
|
|
$ |
1,101 |
|
|
13% |
|
|
$ |
1,122 |
|
|
$ |
960 |
|
|
17% |
|
Acquired in-process research
and development (IPR&D) |
|
$ |
7 |
|
|
$ |
56 |
|
|
(88% |
) |
|
|
* |
|
|
|
* |
|
|
n/a |
|
Selling, general, and
administrative (SG&A) |
|
$ |
689 |
|
|
$ |
601 |
|
|
15% |
|
|
$ |
584 |
|
|
$ |
515 |
|
|
13% |
|
Cost of goods sold (COGS) |
|
$ |
240 |
|
|
$ |
208 |
|
|
15% |
|
|
$ |
196 |
|
|
$ |
168 |
|
|
17% |
|
Cost of collaboration and
contract manufacturing (COCM) |
|
$ |
193 |
|
|
$ |
249 |
|
|
(22% |
) |
|
|
* |
|
|
|
* |
|
|
n/a |
|
Other operating expense
(income), net |
|
$ |
15 |
|
|
$ |
(1 |
) |
|
** |
|
|
$ |
— |
|
|
|
* |
|
|
** |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* GAAP and non-GAAP amounts are equivalent as no non-GAAP
adjustments have been recorded. |
** Percentage not meaningful |
- GAAP and non-GAAP
R&D expenses increased in the first quarter of 2024, compared
to the first quarter of 2023, driven by the advancement of the
Company's late-stage oncology programs, and higher headcount and
headcount-related costs.
- Acquired IPR&D
for first quarter of 2023 included a $45 million up-front payment
in connection with the Company's collaboration agreement with
Sonoma Biotherapeutics, Inc.
- GAAP and non-GAAP
SG&A expenses increased in the first quarter of 2024, compared
to the first quarter of 2023, due to higher
commercialization-related expenses to support the Company's launch
of EYLEA HD and higher headcount and headcount-related costs
primarily related to the international expansion in support of
Libtayo and hematology product launch preparations.
- GAAP and non-GAAP
COGS increased in the first quarter of 2024, compared to the first
quarter of 2023, primarily due to higher start-up costs for the
Company's Rensselaer, New York fill/finish facility.
- COCM decreased in
the first quarter of 2024, compared to the first quarter of 2023,
primarily due to lower Dupixent manufacturing costs as a result of
the transition to a higher-yielding manufacturing process.
- GAAP other operating
expense (income), net, for the first quarter of 2024 reflects a
charge related to the increase in the estimated fair value of the
contingent consideration liability recognized in connection with
the Company's 2023 acquisition of Decibel Therapeutics, Inc.
Other Financial Information
GAAP other income (expense) included the recognition of net
unrealized losses on equity securities of $196 million in the first
quarter of 2024, compared to $165 million of net unrealized losses
in the first quarter of 2023. GAAP and Non-GAAP other income
(expense) also included interest income of $162 million in the
first quarter of 2024, compared to $95 million in the first quarter
of 2023.
In the first quarter of 2024, the Company's GAAP effective tax
rate (ETR) was (3.0%), compared to 4.7% in the first quarter of
2023. The GAAP ETR in the first quarter of 2024, compared to the
first quarter of 2023, included a higher benefit from stock-based
compensation. In the first quarter of 2024, the non-GAAP ETR was
6.1%, compared to 9.7% in the first quarter of 2023.
GAAP net income per diluted share was $6.27 in the first quarter
of 2024, compared to $7.17 in the first quarter of 2023. Non-GAAP
net income per diluted share was $9.55 in the first quarter of
2024, compared to $10.09 in the first quarter of 2023. A
reconciliation of the Company's GAAP to non-GAAP results is
included in Table 3 of this press release.
During the first quarter of 2024, the Company repurchased shares
of its common stock and recorded the cost of the shares, or
$298 million, as Treasury Stock. As of March 31, 2024,
$1.2 billion remained available for share repurchases under
the Company's share repurchase program then in effect (excluding
the additional $3.0 billion share repurchase program authorized in
April 2024).
2024 Financial Guidance(c)
The Company's full year 2024 financial guidance consists of the
following components:
|
|
2024 Guidance |
|
|
Prior |
|
Updated |
GAAP R&D |
|
$4.820–$5.070 billion |
|
$4.920–$5.170 billion** |
Non-GAAP R&D(a) |
|
$4.300–$4.500 billion |
|
$4.400–$4.600 billion** |
GAAP SG&A |
|
$2.890–$3.090 billion |
|
$2.940–$3.090 billion |
Non-GAAP SG&A(a) |
|
$2.500–$2.650 billion |
|
$2.550–$2.650 billion |
GAAP gross margin on net
product sales(d) |
|
86%–88% |
|
Unchanged |
Non-GAAP gross margin on net
product sales(a)(d) |
|
89%–91% |
|
Unchanged |
COCM(e)* |
|
$850–$910 million |
|
Unchanged |
Capital expenditures* |
|
$825–$950 million |
|
$780–$880 million |
GAAP effective tax rate |
|
8%–10% |
|
7%–9% |
Non-GAAP effective tax
rate(a) |
|
10%–12% |
|
Unchanged |
|
|
|
|
|
* GAAP and non-GAAP amounts are equivalent as no non-GAAP
adjustments have been or are expected to be recorded. |
** Updates to GAAP and non-GAAP amounts reflect ongoing program,
infrastructure, and personnel costs assumed in connection with the
acquisition of 2seventy bio's preclinical and clinical pipeline as
described above. |
|
A reconciliation of full year 2024 GAAP to non-GAAP financial
guidance is included below:
|
|
Projected Range |
($ in millions) |
|
Low |
|
High |
GAAP R&D |
|
$ |
4,920 |
|
|
$ |
5,170 |
|
Stock-based compensation expense |
|
|
510 |
|
|
|
540 |
|
Acquisition and integration costs |
|
|
10 |
|
|
|
30 |
|
Non-GAAP R&D |
|
$ |
4,400 |
|
|
$ |
4,600 |
|
|
|
|
|
|
GAAP SG&A |
|
$ |
2,940 |
|
|
$ |
3,090 |
|
Stock-based compensation expense |
|
|
350 |
|
|
|
380 |
|
Acquisition and integration costs |
|
|
40 |
|
|
|
60 |
|
Non-GAAP SG&A |
|
$ |
2,550 |
|
|
$ |
2,650 |
|
|
|
|
|
|
GAAP gross margin on net
product sales |
|
|
86% |
|
|
|
88% |
|
Stock-based compensation expense |
|
|
1% |
|
|
|
1% |
|
Intangible asset amortization expense |
|
|
1% |
|
|
|
1% |
|
Acquisition and integration costs |
|
|
<1% |
|
|
|
<1% |
|
Non-GAAP gross margin on net
product sales |
|
|
89% |
|
|
|
91% |
|
|
|
|
|
|
GAAP ETR |
|
|
7% |
|
|
|
9% |
|
Income tax effect of GAAP to non-GAAP reconciling items |
|
|
3% |
|
|
|
3% |
|
Non-GAAP ETR |
|
|
10% |
|
|
|
12% |
|
(a) |
This press release uses non-GAAP R&D, non-GAAP SG&A,
non-GAAP COGS, non-GAAP gross margin on net product sales, non-GAAP
other operating (income) expense, net, non-GAAP other income
(expense), net, non-GAAP ETR, non-GAAP net income, non-GAAP net
income per share, total revenues excluding Ronapreve, and free cash
flow, which are financial measures that are not calculated in
accordance with U.S. Generally Accepted Accounting Principles
(GAAP). These non-GAAP financial measures are computed by excluding
certain non-cash and/or other items from the related GAAP financial
measure. The Company also includes a non-GAAP adjustment for the
estimated income tax effect of reconciling items. A reconciliation
of the Company's GAAP to non-GAAP results is included in Table 3 of
this press release.The Company makes such adjustments for items the
Company does not view as useful in evaluating its operating
performance. For example, adjustments may be made for items that
fluctuate from period to period based on factors that are not
within the Company's control (such as the Company's stock price on
the dates share-based grants are issued or changes in the fair
value of the Company's investments in equity securities) or items
that are not associated with normal, recurring operations (such as
acquisition and integration costs). Management uses these non-GAAP
measures for planning, budgeting, forecasting, assessing historical
performance, and making financial and operational decisions, and
also provides forecasts to investors on this basis. With respect to
free cash flows, the Company believes that this non-GAAP measure
provides a further measure of the Company's ability to generate
cash flows from its operations. Additionally, such non-GAAP
measures provide investors with an enhanced understanding of the
financial performance of the Company's core business operations.
However, there are limitations in the use of these and other
non-GAAP financial measures as they exclude certain expenses that
are recurring in nature. Furthermore, the Company's non-GAAP
financial measures may not be comparable with non-GAAP information
provided by other companies. Any non-GAAP financial measure
presented by the Company should be considered supplemental to, and
not a substitute for, measures of financial performance prepared in
accordance with GAAP. |
|
|
(b) |
The casirivimab and imdevimab antibody cocktail for COVID-19 is
known as REGEN-COV in the United States and Ronapreve in other
countries. Roche records net product sales of Ronapreve outside the
United States. |
|
|
(c) |
The Company's 2024 financial guidance does not assume the
completion of any business development transactions not completed
as of the date of this press release. |
|
|
(d) |
Gross margin on net product sales represents gross profit expressed
as a percentage of total net product sales recorded by the Company.
Gross profit is calculated as net product sales less cost of goods
sold. |
|
|
(e) |
Corresponding reimbursements from collaborators and others for
manufacturing of commercial supplies is recorded within
revenues. |
|
|
Conference Call
Information
Regeneron will host a conference call and simultaneous webcast
to discuss its first quarter 2024 financial and operating results
on Thursday, May 2, 2024, at 8:30 AM Eastern Time.
Participants may access the conference call live via webcast, or
register in advance and participate via telephone, on the
"Investors and Media" page of Regeneron's website at
www.regeneron.com. Upon registration, all telephone participants
will receive a confirmation email detailing how to join the
conference call, including the dial-in number along with a unique
passcode and registrant ID that can be used to access the call. A
replay of the conference call and webcast will be archived on the
Company's website for at least 30 days.
About Regeneron Pharmaceuticals, Inc.
Regeneron is a leading biotechnology company that invents,
develops, and commercializes life-transforming medicines for people
with serious diseases. Founded and led by
physician-scientists, Regeneron's unique ability to repeatedly and
consistently translate science into medicine has led to numerous
approved treatments and product candidates in development, most of
which were homegrown in Regeneron's laboratories. Regeneron's
medicines and pipeline are designed to help patients with eye
diseases, allergic and inflammatory diseases, cancer,
cardiovascular and metabolic diseases, neurological diseases,
hematologic conditions, infectious diseases, and rare diseases.
Regeneron pushes the boundaries of scientific discovery and
accelerates drug development using its proprietary technologies,
such as VelociSuite®, which produces optimized fully human
antibodies and new classes of bispecific antibodies. Regeneron is
shaping the next frontier of medicine with data-powered insights
from the Regeneron Genetics Center® and pioneering genetic medicine
platforms, enabling Regeneron to identify innovative targets and
complementary approaches to potentially treat or cure diseases.
For more information, please visit www.regeneron.com or follow
Regeneron on LinkedIn, Instagram, Facebook, or X.
Forward-Looking Statements and Use of
Digital Media
This press release includes forward-looking statements that
involve risks and uncertainties relating to future events and the
future performance of Regeneron Pharmaceuticals, Inc. ("Regeneron"
or the "Company"), and actual events or results may differ
materially from these forward-looking statements. Words such
as "anticipate," "expect," "intend," "plan," "believe," "seek,"
"estimate," variations of such words, and similar expressions are
intended to identify such forward-looking statements, although not
all forward-looking statements contain these identifying
words. These statements concern, and these risks and
uncertainties include, among others, the nature, timing, and
possible success and therapeutic applications of products marketed
or otherwise commercialized by Regeneron and/or its collaborators
or licensees (collectively, "Regeneron's Products") and product
candidates being developed by Regeneron and/or its collaborators or
licensees (collectively, "Regeneron's Product Candidates") and
research and clinical programs now underway or planned, including
without limitation EYLEA® HD (aflibercept) Injection 8 mg,
EYLEA® (aflibercept) Injection,
Dupixent® (dupilumab), Libtayo®
(cemiplimab), Praluent® (alirocumab),
Kevzara® (sarilumab), Evkeeza®
(evinacumab), Veopoz® (pozelimab), odronextamab,
itepekimab, fianlimab, garetosmab, linvoseltamab,
REGN5713-5714-5715, NTLA-2001, Regeneron's other oncology programs
(including its costimulatory bispecific portfolio), Regeneron's and
its collaborators' earlier-stage programs, and the use of human
genetics in Regeneron's research programs; the likelihood and
timing of achieving any of the anticipated milestones described in
this press release; safety issues resulting from the administration
of Regeneron's Products and Regeneron's Product Candidates in
patients, including serious complications or side effects in
connection with the use of Regeneron’s Products and Regeneron's
Product Candidates in clinical trials; the likelihood, timing, and
scope of possible regulatory approval and commercial launch of
Regeneron's Product Candidates and new indications for Regeneron's
Products, including those listed above and/or otherwise discussed
in this press release; the extent to which the results from the
research and development programs conducted by Regeneron and/or its
collaborators may be replicated in other studies and/or lead to
advancement of product candidates to clinical trials, therapeutic
applications, or regulatory approval; ongoing regulatory
obligations and oversight impacting Regeneron's Products, research
and clinical programs, and business, including those relating to
patient privacy; determinations by regulatory and administrative
governmental authorities which may delay or restrict Regeneron's
ability to continue to develop or commercialize Regeneron's
Products and Regeneron's Product Candidates; competing drugs and
product candidates that may be superior to, or more cost effective
than, Regeneron's Products and Regeneron's Product Candidates;
uncertainty of the utilization, market acceptance, and commercial
success of Regeneron's Products and Regeneron's Product Candidates
and the impact of studies (whether conducted by Regeneron or others
and whether mandated or voluntary) or recommendations and
guidelines from governmental authorities and other third parties on
the commercial success of Regeneron's Products and Regeneron's
Product Candidates; the ability of Regeneron to manufacture and
manage supply chains for multiple products and product candidates;
the ability of Regeneron’s collaborators, suppliers, or other third
parties (as applicable) to perform manufacturing, filling,
finishing, packaging, labeling, distribution, and other steps
related to Regeneron’s Products and Regeneron's Product Candidates;
the availability and extent of reimbursement of Regeneron’s
Products from third-party payers, including private payer
healthcare and insurance programs, health maintenance
organizations, pharmacy benefit management companies, and
government programs such as Medicare and Medicaid; coverage and
reimbursement determinations by such payers and new policies and
procedures adopted by such payers; unanticipated expenses; the
costs of developing, producing, and selling products; the ability
of Regeneron to meet any of its financial projections or guidance
and changes to the assumptions underlying those projections or
guidance, including GAAP and non-GAAP R&D, GAAP and non-GAAP
SG&A, GAAP and non-GAAP gross margin on net product sales,
COCM, capital expenditures, and GAAP and non-GAAP ETR; the
potential for any license or collaboration agreement, including
Regeneron's agreements with Sanofi and Bayer (or their respective
affiliated companies, as applicable), to be cancelled or
terminated; the impact of public health outbreaks, epidemics, or
pandemics (such as the COVID-19 pandemic) on Regeneron's business;
and risks associated with intellectual property of other parties
and pending or future litigation relating thereto (including
without limitation the patent litigation and other related
proceedings relating to EYLEA), other litigation and other
proceedings and government investigations relating to the Company
and/or its operations (including the pending civil proceedings
initiated or joined by the U.S. Department of Justice and the U.S.
Attorney's Office for the District of Massachusetts), the ultimate
outcome of any such proceedings and investigations, and the impact
any of the foregoing may have on Regeneron’s business, prospects,
operating results, and financial condition. A more complete
description of these and other material risks can be found in
Regeneron's filings with the U.S. Securities and Exchange
Commission, including its Form 10-K for the fiscal year ended
December 31, 2023 and its Form 10-Q for the quarterly period ended
March 31, 2024. Any forward-looking statements are made based on
management's current beliefs and judgment, and the reader is
cautioned not to rely on any forward-looking statements made by
Regeneron. Regeneron does not undertake any obligation to update
(publicly or otherwise) any forward-looking statement, including
without limitation any financial projection or guidance, whether as
a result of new information, future events, or otherwise.
Regeneron uses its media and investor relations website and
social media outlets to publish important information about the
Company, including information that may be deemed material to
investors. Financial and other information about Regeneron is
routinely posted and is accessible on Regeneron's media and
investor relations website (https://investor.regeneron.com) and its
LinkedIn page
(https://www.linkedin.com/company/regeneron-pharmaceuticals).
Non-GAAP Financial Measures
This press release and/or the financial results attached to this
press release include amounts that are considered "non-GAAP
financial measures" under SEC rules. As required, Regeneron has
provided reconciliations of such non-GAAP financial measures.
|
Contact Information: |
|
|
|
|
|
|
|
Ryan Crowe |
|
Christina Chan |
|
Investor Relations |
|
Corporate Affairs |
|
914-847-8790 |
|
914-847-8827 |
|
ryan.crowe@regeneron.com |
|
christina.chan@regeneron.com |
|
|
|
|
TABLE 1
REGENERON PHARMACEUTICALS, INC.CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)(In
millions) |
|
|
|
March 31, |
|
December 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Assets: |
|
|
|
|
Cash and marketable securities |
|
$ |
17,498.3 |
|
|
$ |
16,241.3 |
|
Accounts receivable, net |
|
|
5,222.2 |
|
|
|
5,667.3 |
|
Inventories |
|
|
2,714.9 |
|
|
|
2,580.5 |
|
Property, plant, and equipment, net |
|
|
4,225.5 |
|
|
|
4,146.4 |
|
Intangible assets, net |
|
|
1,058.7 |
|
|
|
1,038.6 |
|
Deferred tax assets |
|
|
2,764.9 |
|
|
|
2,575.4 |
|
Other assets |
|
|
885.1 |
|
|
|
830.7 |
|
Total assets |
|
$ |
34,369.6 |
|
|
$ |
33,080.2 |
|
|
|
|
|
|
Liabilities and stockholders'
equity: |
|
|
|
|
Accounts payable, accrued expenses, and other liabilities |
|
$ |
3,972.7 |
|
|
$ |
3,818.6 |
|
Finance lease liabilities |
|
|
720.0 |
|
|
|
720.0 |
|
Deferred revenue |
|
|
702.5 |
|
|
|
585.6 |
|
Long-term debt |
|
|
1,983.3 |
|
|
|
1,982.9 |
|
Stockholders' equity |
|
|
26,991.1 |
|
|
|
25,973.1 |
|
Total liabilities and
stockholders' equity |
|
$ |
34,369.6 |
|
|
$ |
33,080.2 |
|
TABLE 2
REGENERON PHARMACEUTICALS, INC.CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)(In millions, except per share
data) |
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Revenues: |
|
|
|
|
Net product sales |
|
$ |
1,761.3 |
|
|
$ |
1,668.0 |
|
Collaboration revenue |
|
|
1,266.8 |
|
|
|
1,378.1 |
|
Other revenue |
|
|
116.9 |
|
|
|
116.0 |
|
|
|
|
3,145.0 |
|
|
|
3,162.1 |
|
Expenses: |
|
|
|
|
Research and development |
|
|
1,248.4 |
|
|
|
1,101.2 |
|
Acquired in-process research and development |
|
|
7.1 |
|
|
|
56.1 |
|
Selling, general, and administrative |
|
|
689.0 |
|
|
|
601.1 |
|
Cost of goods sold |
|
|
240.4 |
|
|
|
208.4 |
|
Cost of collaboration and contract manufacturing |
|
|
193.4 |
|
|
|
249.1 |
|
Other operating expense (income), net |
|
|
15.3 |
|
|
|
(0.5 |
) |
|
|
|
2,393.6 |
|
|
|
2,215.4 |
|
|
|
|
|
|
Income from operations |
|
|
751.4 |
|
|
|
946.7 |
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
Other (expense) income, net |
|
|
(34.6 |
) |
|
|
(70.7 |
) |
Interest expense |
|
|
(16.1 |
) |
|
|
(18.0 |
) |
|
|
|
(50.7 |
) |
|
|
(88.7 |
) |
|
|
|
|
|
Income before income
taxes |
|
|
700.7 |
|
|
|
858.0 |
|
|
|
|
|
|
Income tax (benefit)
expense |
|
|
(21.3 |
) |
|
|
40.2 |
|
|
|
|
|
|
Net income |
|
$ |
722.0 |
|
|
$ |
817.8 |
|
|
|
|
|
|
Net income per share -
basic |
|
$ |
6.70 |
|
|
$ |
7.64 |
|
Net income per share -
diluted |
|
$ |
6.27 |
|
|
$ |
7.17 |
|
|
|
|
|
|
Weighted average shares
outstanding - basic |
|
|
107.8 |
|
|
|
107.1 |
|
Weighted average shares
outstanding - diluted |
|
|
115.1 |
|
|
|
114.0 |
|
TABLE 3
REGENERON PHARMACEUTICALS,
INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
INFORMATION (Unaudited)(In millions, except per
share data) |
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
GAAP R&D |
|
$ |
1,248.4 |
|
|
$ |
1,101.2 |
|
Stock-based compensation expense |
|
|
123.0 |
|
|
|
139.5 |
|
Acquisition and integration costs |
|
|
3.8 |
|
|
|
1.6 |
|
Non-GAAP R&D |
|
$ |
1,121.6 |
|
|
$ |
960.1 |
|
|
|
|
|
|
GAAP SG&A |
|
$ |
689.0 |
|
|
$ |
601.1 |
|
Stock-based compensation expense |
|
|
86.2 |
|
|
|
76.8 |
|
Acquisition and integration costs |
|
|
18.8 |
|
|
|
9.6 |
|
Non-GAAP SG&A |
|
$ |
584.0 |
|
|
$ |
514.7 |
|
|
|
|
|
|
GAAP COGS |
|
$ |
240.4 |
|
|
$ |
208.4 |
|
Stock-based compensation expense |
|
|
20.9 |
|
|
|
22.4 |
|
Acquisition and integration costs |
|
|
0.4 |
|
|
|
— |
|
Intangible asset amortization expense |
|
|
23.2 |
|
|
|
18.5 |
|
Non-GAAP COGS |
|
$ |
195.9 |
|
|
$ |
167.5 |
|
|
|
|
|
|
GAAP other operating expense
(income), net |
|
$ |
15.3 |
|
|
$ |
(0.5 |
) |
Change in fair value of contingent consideration |
|
|
15.3 |
|
|
|
— |
|
Non-GAAP other operating
expense (income), net |
|
$ |
— |
|
|
$ |
(0.5 |
) |
|
|
|
|
|
GAAP other income (expense),
net |
|
$ |
(50.7 |
) |
|
$ |
(88.7 |
) |
Losses on investments, net |
|
|
196.1 |
|
|
|
166.6 |
|
Non-GAAP other income
(expense), net |
|
$ |
145.4 |
|
|
$ |
77.9 |
|
|
|
|
|
|
GAAP net income |
|
$ |
722.0 |
|
|
$ |
817.8 |
|
Total of GAAP to non-GAAP reconciling items above |
|
|
487.7 |
|
|
|
435.0 |
|
Income tax effect of GAAP to non-GAAP reconciling items |
|
|
(93.8 |
) |
|
|
(85.3 |
) |
Non-GAAP net income |
|
$ |
1,115.9 |
|
|
$ |
1,167.5 |
|
|
|
|
|
|
Non-GAAP net income per share
- basic |
|
$ |
10.35 |
|
|
$ |
10.90 |
|
Non-GAAP net income per share
- diluted |
|
$ |
9.55 |
|
|
$ |
10.09 |
|
|
|
|
|
|
Shares used in
calculating: |
|
|
|
|
Non-GAAP net income per share
- basic |
|
|
107.8 |
|
|
|
107.1 |
|
Non-GAAP net income per share
- diluted |
|
|
116.8 |
|
|
|
115.7 |
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(Unaudited) (continued) |
|
|
|
Three Months Ended March 31, |
|
|
2024 |
|
2023 |
Revenue reconciliation: |
|
|
|
|
Total revenues |
|
$ |
3,145.0 |
|
|
$ |
3,162.1 |
|
Global gross profit payment from Roche in connection with sales of
Ronapreve |
|
|
0.5 |
|
|
|
222.2 |
|
Total revenues excluding
Ronapreve |
|
$ |
3,144.5 |
|
|
$ |
2,939.9 |
|
|
|
|
|
|
Effective tax rate
reconciliation: |
|
|
|
|
GAAP ETR |
|
|
(3.0% |
) |
|
|
4.7% |
|
Income tax effect of GAAP to non-GAAP reconciling items |
|
|
9.1% |
|
|
|
5.0% |
|
Non-GAAP ETR |
|
|
6.1% |
|
|
|
9.7% |
|
|
|
|
|
|
Free cash flow
reconciliation: |
|
|
|
|
Net cash provided by operating
activities |
|
$ |
1,512.5 |
|
|
$ |
1,367.6 |
|
Capital expenditures |
|
|
(133.9 |
) |
|
|
(178.2 |
) |
Free cash flow |
|
$ |
1,378.6 |
|
|
$ |
1,189.4 |
|
TABLE 4
REGENERON PHARMACEUTICALS,
INC.COLLABORATION REVENUE
(Unaudited)(In millions) |
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Sanofi collaboration
revenue: |
|
|
|
|
Regeneron's share of profits in connection with commercialization
of antibodies |
|
$ |
804.0 |
|
|
$ |
636.5 |
|
Reimbursement for manufacturing of commercial supplies |
|
|
105.8 |
|
|
|
161.9 |
|
Total Sanofi collaboration
revenue |
|
|
909.8 |
|
|
|
798.4 |
|
|
|
|
|
|
Bayer collaboration
revenue: |
|
|
|
|
Regeneron's share of profits in connection with commercialization
of EYLEA 8 mg and EYLEA outside the United States |
|
|
333.9 |
|
|
|
331.6 |
|
Reimbursement for manufacturing of ex-U.S. commercial supplies |
|
|
22.1 |
|
|
|
25.3 |
|
Total Bayer collaboration
revenue |
|
|
356.0 |
|
|
|
356.9 |
|
|
|
|
|
|
Other collaboration
revenue: |
|
|
|
|
Global gross profit payment from Roche in connection with sales of
Ronapreve |
|
|
0.5 |
|
|
|
222.2 |
|
Other |
|
|
0.5 |
|
|
|
0.6 |
|
|
|
|
|
|
Total collaboration
revenue |
|
$ |
1,266.8 |
|
|
$ |
1,378.1 |
|
TABLE 5
REGENERON PHARMACEUTICALS, INC.NET PRODUCT
SALES OF REGENERON-DISCOVERED PRODUCTS
(Unaudited)(In millions) |
|
|
|
Three Months Ended March 31, |
|
|
|
|
2024 |
|
2023 |
|
% Change |
|
|
U.S. |
|
ROW(g) |
|
Total |
|
U.S. |
|
ROW |
|
Total |
|
(Total Sales) |
EYLEA HD and EYLEA(a) |
|
$ |
1,401.6 |
|
|
$ |
849.4 |
|
|
$ |
2,251.0 |
|
|
$ |
1,433.8 |
|
|
$ |
847.1 |
|
|
$ |
2,280.9 |
|
|
(1 |
%) |
Dupixent(b) |
|
$ |
2,218.0 |
|
|
$ |
858.8 |
|
|
$ |
3,076.8 |
|
|
$ |
1,898.1 |
|
|
$ |
586.9 |
|
|
$ |
2,485.0 |
|
|
24 |
% |
Libtayo(c) |
|
$ |
159.2 |
|
|
$ |
104.7 |
|
|
$ |
263.9 |
|
|
$ |
109.7 |
|
|
$ |
72.9 |
|
|
$ |
182.6 |
|
|
45 |
% |
Praluent(d) |
|
$ |
70.0 |
|
|
$ |
131.3 |
|
|
$ |
201.3 |
|
|
$ |
40.2 |
|
|
$ |
105.7 |
|
|
$ |
145.9 |
|
|
38 |
% |
Kevzara(b) |
|
$ |
50.0 |
|
|
$ |
44.1 |
|
|
$ |
94.1 |
|
|
$ |
39.2 |
|
|
$ |
39.3 |
|
|
$ |
78.5 |
|
|
20 |
% |
REGEN-COV(e) |
|
$ |
— |
|
|
$ |
1.2 |
|
|
$ |
1.2 |
|
|
$ |
— |
|
|
$ |
613.2 |
|
|
$ |
613.2 |
|
|
(100 |
%) |
Other products(f) |
|
$ |
25.3 |
|
|
$ |
17.7 |
|
|
$ |
43.0 |
|
|
$ |
18.1 |
|
|
$ |
16.5 |
|
|
$ |
34.6 |
|
|
24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Regeneron records net product sales of EYLEA HD and EYLEA in
the United States, and Bayer records net product sales outside the
United States. The Company records its share of profits in
connection with sales outside the United States. |
(b) Sanofi records global net product sales of Dupixent and
Kevzara, and the Company records its share of profits in connection
with global sales of such products. |
(c) Effective July 1, 2022, the Company began recording net product
sales of Libtayo outside the United States and pays Sanofi a
royalty on global sales. Included in this line item for the first
quarter of 2023 is approximately $6 million of net product sales
recorded by Sanofi in connection with sales in certain markets
outside the United States (Sanofi recorded net product sales in
such markets during a transition period). |
(d) Regeneron records net product sales of Praluent in the United
States. Sanofi records net product sales of Praluent outside the
United States and pays the Company a royalty on such sales. |
(e) Roche records net product sales outside the United States and
the parties share gross profits from sales based on a pre-specified
formula. |
(f) Included in this line item are products which are sold by the
Company and others. Refer to "First Quarter 2024 Financial Results"
section above for a complete listing of net product sales recorded
by the Company. Not included in this line item are net product
sales of ARCALYST®, which are recorded by Kiniksa; net product
sales of ARCALYST were $71 million for the fourth quarter of
2023. |
(g) Rest of world (ROW) |
Regeneron Pharmaceuticals (NASDAQ:REGN)
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