REGENERON PHARMACEUTICALS, INC. 
This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties relating to future events and the future performance ofRegeneron Pharmaceuticals, Inc. (where applicable, together with its subsidiaries, "Regeneron," "Company," "we," "us," and "our"), 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 impact of SARS-CoV-2 (the virus that has caused the COVID-19 pandemic) on Regeneron's business and its employees, collaborators, and suppliers and other third parties on which Regeneron relies, Regeneron's and its collaborators' ability to continue to conduct research and clinical programs, Regeneron's ability to manage its supply chain, net product sales of products marketed or otherwise commercialized by Regeneron and/or its collaborators or licensees (collectively, "Regeneron's Products"), and the global economy; the nature, timing, and possible success and therapeutic applications of 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® (aflibercept) Injection, Dupixent® (dupilumab) Injection, Libtayo® (cemiplimab) Injection, Praluent® (alirocumab) Injection, Kevzara® (sarilumab) Injection, Evkeeza® (evinacumab), Inmazeb® (atoltivimab, maftivimab, and odesivimab-ebgn), REGEN-COV® (casirivimab and imdevimab), aflibercept 8 mg, fasinumab, pozelimab, odronextamab, itepekimab, fianlimab, REGN5458, REGN5713-5714-5715, REGN1908-1909, 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 our anticipated development milestones referenced in this report; 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 our late-stage product candidates and new indications for Regeneron's Products, including without limitation those listed above; the extent to which the results from the research and development programs conducted by us and/or our 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 our 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; our ability to manufacture and manage supply chains for multiple products and product candidates; the ability of our 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 payors, including private payor 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 payors and new policies and procedures adopted by such payors; unanticipated expenses; the costs of developing, producing, and selling products; our ability to meet any of our financial projections or guidance, including without limitation capital expenditures, and changes to the assumptions underlying those projections or guidance; the potential for any license or collaboration agreement, including our agreements with Sanofi, Bayer, and Teva Pharmaceutical Industries Ltd. (or their respective affiliated companies, as applicable), as well as Regeneron's agreement with Roche relating to the casirivimab and imdevimab antibody cocktail (known as REGEN-COV inthe United States and Ronapreve™ in other countries), to be cancelled or terminated; the likelihood that any planned or future acquisitions, business combinations, or other related transactions, such as Regeneron's planned acquisition of Checkmate Pharmaceuticals, Inc. discussed in this report, will close within the expected time period or at all and whether and to what extent Regeneron will realize any anticipated benefits of any such transaction; 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, Dupixent, Praluent, and REGEN-COV described further in Note 13 to our Condensed Consolidated Financial Statements included in this report), other litigation and other proceedings and government investigations relating to the Company and/or its operations (including without limitation those described in Note 13 to our Condensed Consolidated Financial Statements included in this report), the ultimate outcome of any such proceedings and investigations, and the impact any of the foregoing may have on our business, prospects, operating results, and financial condition. These statements are made based on management's current beliefs and judgment, and the reader is cautioned not to rely on any such statements. In evaluating such statements, shareholders and potential investors 23 --------------------------------------------------------------------------------
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should specifically consider the various factors identified under Part II, Item 1A. "Risk Factors," which could cause actual events and results to differ materially from those indicated by such forward-looking statements. We do not undertake any obligation to update (publicly or otherwise) any forward-looking statement, whether as a result of new information, future events, or otherwise.
Overview
Regeneron Pharmaceuticals, Inc. is a fully integrated biotechnology company that invents, develops, manufactures, and commercializes medicines for people with serious diseases. Our products and product candidates in development are designed to help patients with eye diseases, allergic and inflammatory diseases, cancer, cardiovascular and metabolic diseases, pain, hematologic conditions, infectious diseases, and rare diseases. Our core business strategy is to maintain a strong foundation in basic scientific research and discovery-enabling technologies, and to build on that foundation with our clinical development, manufacturing, and commercial capabilities. Our objective is to continue to be an integrated, multi-product biotechnology company that provides patients and medical professionals with important medicines for preventing and treating human diseases.
Selected financial information is summarized as follows:
Three Months Ended
March 31,
(In millions, except per share data) 2022 2021
Revenues $ 2,965.1 $ 2,528.7
Net income $ 973.5 $ 1,115.2
Net income per share - diluted $ 8.61 $ 10.09
For purposes of this report, references to our products encompass products
marketed or otherwise commercialized by us and/or our collaborators or licensees
and references to our product candidates encompass product candidates in
development by us and/or our collaborators or licensees (in the case of
collaborated or licensed products or product candidates under the terms of the
applicable collaboration or license agreements), unless otherwise stated or
required by the context.
Products
Products that have received marketing approval are summarized in the table
below.
Territory
Product Disease U.S. EU Japan ROW(d)
EYLEA (aflibercept) - Neovascular age-related macular a a a a
Injection(a) degeneration ("wet AMD")
- Diabetic macular edema ("DME") a a a a
- Macular edema following retinal a a a a
vein occlusion ("RVO"), which
includes macular edema following
central retinal vein occlusion
("CRVO") and macular edema
following branch retinal vein
occlusion ("BRVO")
- Myopic choroidal neovascularization a a a
("mCNV")
- Diabetic retinopathy a
- Neovascular glaucoma ("NVG") a
Dupixent (dupilumab) - Atopic dermatitis (in adults and a a a a
Injection(b) adolescents)
- Atopic dermatitis (in pediatrics a a a
6-11 years of age)
- Asthma (in adults and adolescents) a a a a
- Asthma (in pediatrics 6-11 years of a a
age)
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Territory
Product (continued) Disease U.S. EU Japan ROW(d)
Dupixent (dupilumab) - Chronic rhinosinusitis with nasal a a a a
Injection(b) (continued) polyposis ("CRSwNP")
Libtayo (cemiplimab) - Metastatic or locally advanced a a a
Injection(b) first-line non-small cell lung cancer
("NSCLC")
- Metastatic or locally advanced basal a a a
cell carcinoma ("BCC")
- Metastatic or locally advanced a a a
cutaneous squamous cell carcinoma
("CSCC")
- Metastatic or recurrent second-line a
cervical cancer
Praluent (alirocumab) - LDL-lowering in heterozygous familial a a a
Injection(c) hypercholesterolemia ("HeFH") or
clinical atherosclerotic
cardiovascular disease ("ASCVD")
- Cardiovascular risk reduction in a a a
patients with established
cardiovascular disease
- Homozygous familial a
hypercholesterolemia ("HoFH")
REGEN-COV(e) - COVID-19 a a aKevzara (sarilumab) Solution for - Rheumatoid arthritis ("RA")
a a a a
Subcutaneous Injection(b)
Evkeeza (evinacumab) - HoFH (in adults and adolescents) a a
Injection(f)
Inmazeb (atoltivimab, - Infection caused by Zaire ebolavirus a
maftivimab, and odesivimab-ebgn)
Injection
ARCALYST® (rilonacept) Injection - Cryopyrin-associated periodic a
for Subcutaneous Use(g) syndromes ("CAPS"), including
familial cold auto-inflammatory
syndrome ("FCAS") and Muckle-Wells
syndrome ("MWS") (in adults and
adolescents)
- Deficiency of interleukin-1 receptor a
antagonist ("DIRA") (in adults and
pediatrics)
- Recurrent pericarditis (in adults and a
adolescents)
ZALTRAP® (ziv-aflibercept) - Metastatic colorectal cancer ("mCRC") a a a a
Injection for Intravenous
Infusion(h)
Note: Refer to "Net Product Sales of Regeneron-Discovered Products" section below for information regarding whether net product sales for a
particular product are recorded by us or others. In addition, unless otherwise noted, products in the table above are approved for use in
adults in the above-referenced diseases.
(a) In collaboration with Bayer outside the United States
(b) In collaboration with Sanofi
(c) The Company is solely responsible for the development and commercialization of Praluent in the United States , and Sanofi is solely
responsible for the development and commercialization of Praluent outside of the United States .
(d) Rest of world ("ROW"). A checkmark in this column indicates that the product has received marketing approval in at least one country
outside of the United States , European Union ("EU"), or Japan .
(e) Known as REGEN-COV in the United States and Ronapreve in other countries
(f) In January 2022 , the Company entered into a license and collaboration agreement for Ultragenyx to develop and commercialize Evkeeza
outside of the United States .
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(g) Kiniksa is solely responsible for the development and commercialization of ARCALYST. (h) Sanofi is solely responsible for the development and commercialization of ZALTRAP.
REGEN-COV - Emergency and Temporary Use Authorizations
REGEN-COV has not been approved by theU.S. Food and Drug Administration ("FDA"), but is currently authorized under an Emergency Use Authorization ("EUA") for use in certain post-exposure prophylaxis settings and as a treatment for people with mild to moderate COVID-19 who are at high risk of serious consequences from COVID-19. The EUA is temporary and does not replace a formal Biologics License Application ("BLA") submission review and approval process. This use is authorized only for the duration of the declaration that circumstances exist justifying the authorization of the emergency use, unless terminated or revoked sooner. Based on laboratory data that showed markedly decreased binding to the Omicron spike protein, REGEN-COV is highly unlikely to be active against the Omicron-lineage variants. InJanuary 2022 , the FDA revised the EUA for REGEN-COV to exclude its use in geographic regions where, based on available information including variant susceptibility and regional variant frequency, infection or exposure is likely due to a variant such as an Omicron-lineage variant that is not susceptible to the treatment. With this EUA revision, REGEN-COV is not currently authorized for use in anyU.S. states, territories, or jurisdictions, since Omicron-lineage variants are currently dominant acrossthe United States . If, in the future, patients in certain geographic regions are likely to be infected or exposed to a variant that is susceptible to REGEN-COV, then the limitation on use may be revised in these areas.
Emergency or temporary pandemic use authorizations are also currently in place
in numerous other countries outside
Net Product Sales of Regeneron-Discovered Products
Three Months Ended
March 31,
2022 2021 % Change
(In millions) U.S. ROW Total U.S. ROW Total (Total Sales)
EYLEA(a) $ 1,517.6 $ 868.5 $ 2,386.1 $ 1,347.0 $ 811.2 * $ 2,158.2 11 %
Dupixent(b) $ 1,325.6 $ 484.8 $ 1,810.4 $ 961.5 $ 301.4 $ 1,262.9 43 %
Libtayo(c) $ 78.9 $ 45.8 $ 124.7 $ 69.1 $ 31.7 $ 100.8 24 %
Praluent(d) $ 33.6 $ 77.8 $ 111.4 $ 43.3 $ 61.3 $ 104.6 7 %
REGEN-COV(e) $ - $ 635.6 $ 635.6 $ 262.2 $ 176.6 $ 438.8 45 %
Kevzara(b) $ 57.0 $ 49.4 $ 106.4 $ 30.7 $ 38.4 $ 69.1 54 %
Other products(f) $ 9.9 $ 20.4 $ 30.3 $ 4.1 $ 23.0 $ 27.1 12 %
* Effective January 1, 2022 , the Company and Bayer commenced sharing equally in profits and losses based on sales from Bayer to its distributor in Japan .
Previously, the Company received from Bayer a tiered percentage of sales based on sales by Bayer's distributor in Japan . Consequently, the prior year net
product sales amount has been revised for comparability purposes.
(a) Regeneron records net product sales of EYLEA in the United States . Bayer records net product sales of EYLEA outside the United States . The Company
records its share of profits/losses in connection with sales of EYLEA outside the United States .
(b) Sanofi records global net product sales of Dupixent and Kevzara. The Company records its share of profits/losses in connection with global sales of
Dupixent and Kevzara.
(c) Regeneron records net product sales of Libtayo in the United States and Sanofi records net product sales of Libtayo outside the United States . The
parties equally share profits/losses in connection with global sales of Libtayo.
(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) Regeneron records net product sales of REGEN-COV in connection with its agreements with the U.S. government. Roche records net product sales of the
antibody cocktail outside the United States and the parties share gross profits from global 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 "Results of Operations - Revenues" below for a complete
listing of net product sales recorded by the Company. In addition, not included in this line item are net product sales of ARCALYST subsequent to the
first quarter of 2021, which are recorded by Kiniksa; net product sales of ARCALYST were $18.7 million for the fourth quarter of 2021.
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Programs in Clinical Development
Product candidates in clinical development, which are being developed by us and/or our collaborators, are summarized in the table below.
There are numerous uncertainties associated with drug development, including uncertainties related to safety and efficacy data from each phase of drug development (including any post-approval studies), uncertainties related to the enrollment and performance of clinical trials, changes in regulatory requirements, changes to drug pricing and reimbursement regulations and requirements, and changes in the competitive landscape affecting a product candidate. The planning, execution, and results of our clinical programs are significant factors that can affect our operating and financial results.
Refer to Part II, Item 1A. "Risk Factors" for a description of risks and uncertainties that may affect our clinical programs. Any of such risks and uncertainties may, among other matters, negatively impact the development timelines set forth in the table below.
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Select Upcoming
Clinical Program Phase 1 Phase 2 Phase 3 Regulatory Review(h) 2022 Events to Date Milestones
Ophthalmology
EYLEA (aflibercept)(a) -Retinopathy of -ROP (EU and Japan) -Report results from
prematurity Phase 3 study in ROP
("ROP")(c) -Every-16-weeks (second half 2022)
dosing regimen in
patients with -FDA decision on
non-proliferative supplemental BLA
diabetic retinopathy ("sBLA") for
("NPDR") every-16-weeks dosing
regimen in patients
with NPDR (first half
2023)
Aflibercept 8 mg(a) -Wet AMD -Reported detailed -Report results from
results from Phase 2 Phase 3 studies in wet
-DME trial in wet AMD AMD and DME (second
half 2022)
Immunology & Inflammation
Dupixent (dupilumab)(b) -Peanut allergy -Atopic dermatitis in -Atopic dermatitis in -Approved by European -FDA decision on sBLA Antibody to IL-4R alpha
pediatrics (6 pediatrics (6 Commission ("EC") for (target action date of
subunit -Grass allergy months-5 years of months-5 years of severe asthma in June 9, 2022) and EC
age) (Phase 2/3)(d) age) (U.S. and EU) pediatrics (6-11 years decision on regulatory
of age) submission (first half
-Eosinophilic -EoE in adults and 2023) for atopic
esophagitis adolescents (U.S. and -Reportedthat second dermatitis in pediatric
("EoE")(c) in EU) Phase 3 trial in patients (6 months-5
adults(d), prurigonodularis met years of age)
adolescents(d), and -Prurigo nodularis its primary and key
pediatrics (U.S. and EU) secondary endpoints -Submit regulatory
application in Japan
-Chronic obstructive -Stoppedone of the for atopic dermatitis
pulmonary disease Phase 3
trials in CSU in pediatric and
("COPD") (in patients adolescent patients (6
refractory to months-14 years of age)
-Bullous pemphigoid omalizumab) due to (second half 2022)
(Phase 2/3)(c) futility, based on
pre-specified interim -FDA decision on sBLA
-Chronic spontaneous analysis (target action date of
urticaria ("CSU") August 3, 2022 ) and EC
decision on regulatory
-Prurigo nodularis submission (first half
2023) for EoE in adults
-Allergic and adolescents
bronchopulmonary
aspergillosis -Report results from
("ABPA") Phase 3 study for EoE
in pediatrics
(mid-2022)
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Regulatory Select Upcoming
Clinical Program (continued) Phase 1 Phase 2 Phase 3 Review(h) 2022 Events to Date Milestones
Dupixent (dupilumab)(b) -Chronic inducible -Report initial results
(continued) urticaria - cold from Phase 3 study in
COPD (first half 2023)
-Chronic
rhinosinusitis without -FDA decision on sBLA
nasal polyposis (fourth quarter
2022/first quarter
-Allergic fungal 2023) and EC decision
rhinosinusitis on regulatory
submission (first half
-Chronic pruritis of 2023) for prurigo
unknown origin nodularis
-Report results from
Phase 3 study in
chronic inducible
urticaria - cold
(second half 2022)
-Report results from
Phase 2 study in peanut
allergy (second half
2022)
Kevzara (sarilumab)(b) -Polyarticular-course
Antibody to IL-6R juvenile idiopathic
arthritis ("pcJIA")
-Systemic juvenile
idiopathic arthritis
("sJIA")
Itepekimab(b) (REGN3500) -COPD
Antibody to IL-33
REGN1908-1909(f) -Cat allergy
Multi-antibody therapy to Fel
d 1
REGN5713-5714-5715 -Birch allergy
Multi-antibody therapy to Bet
v 1
Solid Organ Oncology
Libtayo (cemiplimab)(b)(g) -Metastatic or locally -First-line NSCLC, -Second-line -Voluntarily withdrew -FDA decision on sBLA
Antibody to PD-1 advanced CSCC(d) chemotherapy cervical cancer sBLA for cervical cancer (target action date of
combination (EU and Japan ) due to inability to align September 19, 2022 ) and
-Neoadjuvant CSCC with FDA on certain EC decision on
-Second-line cervical post-marketing studies regulatory submission
cancer(e) for NSCLC, chemotherapy
combination (second
-Adjuvant CSCC half 2022)
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Clinical Program Regulatory
(continued) Phase 1 Phase 2 Phase 3 Review(h) 2022 Events to Date Select Upcoming Milestones
Libtayo (cemiplimab)(b)(g) -Second-line -First-line NSCLC, -EC decision on regulatory
(continued) cervical cancer, chemotherapy submission for cervical
ISA101b combination combination (U.S. cancer (second half 2022)
and EU)
REGN4018(f) -Platinum-resistant -Report results from Phase
Bispecific antibody ovarian cancer 1 study in
targeting MUC16 and CD3 platinum-resistant ovarian
cancer (second half 2022)
REGN5668 -Platinum-resistant
Bispecific antibody ovarian cancer
targeting MUC16 and CD28
REGN5678 -Prostate cancer -Report results from Phase
Bispecific antibody 1 study in prostate cancer
targeting PSMA and CD28 (second half 2022)
REGN4336 -Prostate cancer
Bispecific antibody
targeting PSMA and CD3
REGN5093 -MET-altered advanced -Report results from Phase
Bispecific antibody NSCLC 1 study in MET-altered
targeting two distinct MET advanced NSCLC (second half
epitopes 2022)
REGN5093-M114 -MET overexpressing
Bispecific antibody-drug advanced cancer
conjugate targeting two
distinct MET epitopes
Fianlimab(f) -Solid tumors and -First-line -Initiate Phase 3 study in
(REGN3767) advanced hematologic metastatic melanoma first-line adjuvant
Antibody to LAG-3 malignancies melanoma (second half 2022)
REGN6569 -Solid tumors
Antibody to GITR
REGN7075 -Solid tumors
Bispecific antibody
targeting EGFR and CD28
Hematology
Odronextamab (REGN1979) -Certain B-cell -B-cell non-Hodgkin -Report additional results
Bispecific antibody malignancies(c)(o) lymphoma from potentially pivotal
targeting CD20 and CD3 ("B-NHL")(o) Phase 2 study in B-NHL and
(potentially submit BLA (second half
pivotal study) 2022)
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Clinical Program Select Upcoming
(continued) Phase 1 Phase 2 Phase 3 Regulatory Review(h) 2022 Events to Date Milestones
Odronextamab (REGN1979) -Initiate Phase 3
(continued) program (second half
2022)
REGN5458(f) -Multiple myeloma -Complete enrollment in
Bispecific antibody (potentially pivotal potentially pivotal
targeting BCMA and CD3 study) Phase 2 study in
multiple myeloma
(second half 2022)
-Report results from
potentially pivotal
Phase 2 study in
multiple myeloma (2023)
-Expand into earlier
lines of therapy for
multiple myeloma (first
half 2022)
REGN5459(f) -Transplant
Bispecific antibody desensitization in
targeting BCMA and CD3 patients with
chronic kidney
disease
Pozelimab(f) (REGN3918) -CD55-deficient -Myasthenia gravis, -Submit BLA for
Antibody to C5; studied protein-losing cemdisiran CD55-deficient
as monotherapy and in enteropathy, combination(m) protein-losing
combination with monotherapy(c) enteropathy,
cemdisiran (potentially pivotal -Paroxysmal nocturnal monotherapy (second
study) hemoglobinuria ("PNH"), half 2022)
cemdisiran
combination(c)(m)
Cemdisiran(m) -Immunoglobulin A
siRNA therapeutic nephropathy
targeting C5
REGN7257 -Aplastic anemia
Antibody to IL2Rg
NTLA-2001(l) -Transthyretin -Reported updated
TTR gene knockout using ("ATTR") positive interim
CRISPR/Cas9 amyloidosis(c) data from Phase 1
trial in ATTR
REGN9933 -Thrombosis
Antibody to Factor XI
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Clinical Program (continued) Phase 1 Phase 2 Phase 3 Regulatory Review(h) 2022 Events to Date Select Upcoming Milestones
General Medicine
REGEN-COV (casirivimab and -COVID-19 treatment in -COVID-19 treatment -Submitted additional -FDA decision on BLA imdevimab)(e)(j)(k)
hospitalized patients of non-hospitalized data to the FDA from (target action date of
Multi-antibody therapy to patients and pre-and prophylaxis trial;July 13, 2022 ) for SARS-CoV-2 virus -COVID-19 prevention post-exposure considered Major COVID-19 treatment of prophylaxis (U.S. ) Amendment to the BLA and non-hospitalized patients target action date and prevention -COVID-19 treatment extended by three months of hospitalized -EC decision on regulatory patients (EU) -FDA revised EUA to submission for COVID-19 exclude use in treatment of hospitalized geographic regions where patients (second half infection or exposure is 2022) likely due to a variant that is not susceptible to the treatment "Next Generation" Covid -Healthy volunteers
Antibodies
Antibodies to SARS-CoV-2 variants
Praluent (alirocumab) -HeFH in pediatrics
Antibody to PCSK9
Fasinumab(i)(f) (REGN475) -Osteoarthritis pain of the -Continue discussions with
Antibody to NGF knee or hip(e) regulatory authorities and
determine next steps for
the program (mid-2022)
Evkeeza (evinacumab)(f)(n) -Acute pancreatitis
Antibody to ANGPTL3 prevention
Garetosmab(f) (REGN2477) -Fibrodysplasia -Initiate Phase 3 study in
Antibody to Activin A ossificans progressiva FOP (second half 2022)
("FOP")(c)(d)(e)
REGN4461(f) -Generalized
Agonist antibody to leptin lipodystrophy(e)
receptor ("LEPR")
-Partial lipodystrophy
REGN5381/REGN9035 -Heart failure
Agonist antibody to NPR1 /reversal
agent to REGN5381
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Clinical Program
(continued) Phase 1 Phase 2 Phase 3 Regulatory Review(h) 2022 Events to Date Select Upcoming Milestones
ALN-HSD(m) -Nonalcoholic
RNAi therapeutic steatohepatitis
targeting HSD17B13 ("NASH")
ALN-APP(m) -Early-onset Alzheimer's
RNAi therapeutic disease
targeting APP
Note 1: For purposes of the table above, a program is classified in Phase 1, 2, or 3 clinical
development after recruitment for the corresponding study or studies has commenced.
Note 2: We have discontinued further clinical development of REGN6490, an antibody to IL-36R,
which was previously being studied in palmo-plantar pustulosis.
(a) In collaboration with Bayer outside the United States
(b) In collaboration with Sanofi
(c) FDA granted orphan drug designation
(d) FDA granted Breakthrough Therapy designation
(e) FDA granted Fast Track designation
(f) Sanofi did not opt-in to or elected not to continue to co-develop the product candidate.
Under the terms of our agreement, Sanofi is entitled to receive royalties on sales of the
product, if any.
(g) Studied as monotherapy and in combination with other antibodies and treatments
(h) Information in this column relates to U.S. , EU, and Japan regulatory submissions only
(i) In collaboration with Teva and Mitsubishi Tanabe Pharma
(j) Certain trials conducted with the National Institute of Allergy and Infectious Diseases
("NIAID"), part of the National Institutes of Health ("NIH")
(k) In collaboration with Roche outside the United States
(l) In collaboration with Intellia
(m) In collaboration with Alnylam
(n) In collaboration with Ultragenyx outside the United States
(o) FDA granted Fast Track designation for follicular lymphoma and diffuse large B-cell
lymphoma
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Additional Information - Clinical Development Programs
REGEN-COV (casirivimab and imdevimab)
InApril 2022 , the Company announced that the FDA extended by three months (with a new target action date ofJuly 13, 2022 ) its review of the BLA for REGEN-COV to treat COVID-19 in non-hospitalized patients and as prophylaxis in certain individuals. The extension is due to ongoing discussions with the FDA relating to pre-exposure prophylactic use, for which the Company has submitted additional data from its completed prophylaxis trial that the FDA has accepted for review.
Agreements Related to COVID-19
In the first quarter of 2020, the Company announced an expansion of its Other Transaction Agreement with theBiomedical Advanced Research Development Authority ("BARDA"), pursuant to which theU.S. Department of Health and Human Services ("HHS") was obligated to fund certain of our costs incurred for research and development activities related to COVID-19 treatments. InJuly 2020 , the Company entered into an agreement with entities acting at the direction of BARDA and theU.S. Department of Defense to manufacture and deliver filled and finished drug product of REGEN-COV to theU.S. government. The agreement, as subsequently amended, provided for payments to the Company of up to$465.9 million in the aggregate for bulk manufacturing of the drug substance, as well as fill/finish, storage, and other activities. InJanuary 2021 , the Company announced an agreement with an entity acting on behalf of theU.S. Department of Defense and HHS to manufacture and deliver additional filled and finished drug product of REGEN-COV to theU.S. government. Pursuant to the agreement, theU.S. government was obligated to purchase 1.25 million doses of drug product, resulting in payments to the Company of$2.625 billion . InSeptember 2021 , the Company announced an amendment to itsJanuary 2021 agreement to supply theU.S. government with an additional 1.4 million doses of REGEN-COV. Pursuant to the agreement, theU.S. government was obligated to purchase all filled and finished doses of such additional drug product delivered byJanuary 31, 2022 , resulting in payments to the Company of$2.940 billion in the aggregate. Additionally, Roche supplied a portion of the doses to Regeneron to fulfill our agreement with theU.S. government (see "Roche" section below for further details regarding our collaboration agreement with Roche).
As of
Roche
In 2020, we entered into a collaboration agreement with Roche to develop,
manufacture, and distribute the casirivimab and imdevimab antibody cocktail
(known as REGEN-COV in
Under the terms of the agreement, each party is obligated to dedicate a certain amount of manufacturing capacity to casirivimab and imdevimab each year. We distribute the product inthe United States and Roche distributes the product outside ofthe United States . The parties share gross profits from worldwide sales based on a pre-specified formula, depending on the amount of manufactured product supplied by each party to the market.
Collaboration, License, and Other Agreements
Sanofi
Antibody
We are collaborating with Sanofi on the global development and commercialization of Dupixent, Kevzara, and itepekimab (the "Antibody Collaboration"). Under the terms of the Antibody License and Collaboration Agreement, Sanofi is generally responsible for funding 80%-100% of agreed-upon development costs. We are obligated to reimburse Sanofi for 30%-50% of worldwide development expenses that were funded by Sanofi based on our share of collaboration profits from commercialization of collaboration products. However, we are only required to apply 10% of our share of the profits from the Antibody Collaboration in any calendar quarter to reimburse Sanofi for these development costs.
Under our collaboration agreement, Sanofi records product sales for
commercialized products, and Regeneron has the right to co-commercialize such
products on a country-by-country basis. We co-commercialize Dupixent in
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profits and losses from sales withinthe United States . We and Sanofi share profits outsidethe United States on a sliding scale based on sales starting at 65% (Sanofi)/35% (us) and ending at 55% (Sanofi)/45% (us), and share losses outsidethe United States at 55% (Sanofi)/45% (us). In addition to profit and loss sharing, we are entitled to receive sales milestone payments from Sanofi. In each of the years ended 2020 and 2021, the Company earned a$50.0 million sales-based milestone from Sanofi, upon aggregate annual sales of antibodies outsidethe United States (including Praluent) exceeding$1.0 billion and$1.5 billion , respectively, on a rolling twelve-month basis, and, in first quarter of 2022, the Company earned the next$50.0 million sales-based milestone upon aggregate sales of antibodies outsidethe United States exceeding$2.0 billion . We are entitled to receive up to an aggregate of$100.0 million in additional sales milestone payments from Sanofi, which includes the next sales milestone payment of$50.0 million that would be earned when such sales outsidethe United States exceed$2.5 billion on a rolling twelve-month basis.
Immuno-Oncology
We are collaborating with Sanofi on the development and commercialization of antibody-based cancer treatments in the field of immuno-oncology (the "IO Collaboration"). We are obligated to reimburse Sanofi for half of the development costs they funded that are attributable to clinical development of antibody product candidates under the Amended and Restated Immuno-oncology Discovery and Development Agreement from our share of profits from commercialized IO Collaboration products. Under the terms of the IO License and Collaboration Agreement, the parties are co-developing and co-commercializing Libtayo. We have principal control over the development of Libtayo, and the parties share equally, on an ongoing basis, development and commercialization expenses for Libtayo. With regard to Libtayo, we lead commercialization activities inthe United States , while Sanofi leads commercialization activities outside ofthe United States and the parties equally share profits from worldwide sales. Sanofi has exercised its option to co-commercialize Libtayo inthe United States . We will be entitled to a milestone payment of$375.0 million in the event that global sales of Libtayo equal or exceed$2.0 billion in any consecutive twelve-month period. Bayer We and Bayer are parties to a license and collaboration agreement for the global development and commercialization of EYLEA and aflibercept 8 mg outsidethe United States . All agreed-upon development expenses incurred by the Company and Bayer are shared equally. Bayer markets EYLEA outsidethe United States , and the companies share equally in profits and losses from such sales. InJapan , we were entitled to receive a tiered percentage of between 33.5% and 40.0% of EYLEA net sales through 2021, and, effectiveJanuary 1, 2022 , the companies share equally in profits and losses from sales. We are obligated to reimburse Bayer for 50% of the development costs that it has incurred under the agreement from our share of the collaboration profits. The reimbursement payment in any quarter will equal 5% of the then outstanding repayment obligation, but never more than our share of the collaboration profits in the quarter unless we elect to reimburse Bayer at a faster rate.
Within
Teva
We and Teva are parties to a collaboration agreement to develop and commercialize fasinumab globally, excluding certain Asian countries that are subject to our collaboration agreement withMitsubishi Tanabe Pharma Corporation ("MTPC"). In connection with the agreement, Teva made a$250.0 million non-refundable up-front payment. We lead global development activities, and the parties share equally, on an ongoing basis, development costs under a global development plan. As ofMarch 31, 2022 , we had received an aggregate$120.0 million of development milestones from Teva, and we are entitled to receive up to an aggregate of$340.0 million in additional development milestones and up to an aggregate of$1.890 billion in contingent payments upon achievement of specified annual net sales amounts. We are responsible for the manufacture and supply of fasinumab globally. Withinthe United States , we will lead commercialization activities, and the parties will share equally in any profits or losses in connection with commercialization of fasinumab. In the territory outside ofthe United States , Teva will lead commercialization activities and we will supply product to Teva at a tiered purchase price, which is calculated as a percentage of net sales of the product (subject to adjustment in certain circumstances).
Alnylam
In 2018, we and Alnylam Pharmaceuticals, Inc. entered into a collaboration to
discover RNA interference ("RNAi") therapeutics for NASH and potentially other
related diseases, as well as to research, co-develop and commercialize any
therapeutic product candidates that emerge from these discovery efforts
(including ALN-HSD, which is currently in clinical
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development). ALN-HSD is being co-developed with Alnylam with terms generally
consistent with the form of a Co-Commercialization Collaboration Agreement in
connection with the 2019 collaboration agreement as described below. Alnylam is
conducting the Phase 1 clinical trial for ALN-HSD and Regeneron will be the lead
party for all future development.
In 2019, we and Alnylam entered into a global, strategic collaboration to
discover, develop, and commercialize RNAi therapeutics for a broad range of
diseases by addressing therapeutic disease targets expressed in the eye and
central nervous system ("CNS"), in addition to a select number of targets
expressed in the liver. Under the terms of the agreement, we made an up-front
payment of $400.0 million to Alnylam. For each program, we will provide Alnylam
with a specified amount of funding at program initiation and at lead candidate
designation, and Alnylam is eligible to receive up to an aggregate of $200.0
million in clinical proof-of-principle milestones for eye and CNS programs.
Following designation of a lead candidate, the parties may further advance such
lead candidate under either a co-commercialization collaboration agreement
structure (under which the parties are advancing ALN-APP, which is currently in
clinical development) or a license agreement.
In addition, during 2019, the parties entered into a Co-Commercialization
Collaboration Agreement for a silencing RNA ("siRNA") therapeutic targeting the
C5 component of the human complement pathway being developed by Alnylam, with
Alnylam as the lead party, and a License Agreement for a combination product
consisting of cemdisiran and pozelimab, with us as the licensee. Under the C5
siRNA Co-Commercialization Collaboration agreement, the parties share costs
equally and will split profits (if commercialized); and under the License
Agreement, the licensee is responsible for its own costs and expenses. The C5
siRNA License Agreement contains a flat low double-digit royalty payable to
Alnylam on our potential future net sales of the combination product only
subject to customary reductions, as well as up to $325.0 million in sales
milestones.
Intellia
In 2016, we entered into a license and collaboration agreement with Intellia Therapeutics, Inc. to advance CRISPR/Cas9 gene-editing technology for in vivo therapeutic development. NTLA-2001, which is in clinical development, is subject to a co-development and co-commercialization arrangement pursuant to which Intellia will lead development and commercialization activities and the parties share an agreed-upon percentage of development expenses and profits (if commercialized). In 2020, we expanded our existing collaboration with Intellia to provide us with rights to develop products for additional in vivo CRISPR/Cas9-based therapeutic targets and for the companies to jointly develop potential products for the treatment of hemophilia A and B, with Regeneron leading development and commercialization activities. In addition, we also received non-exclusive rights to independently develop and commercialize ex vivo gene edited products. In connection with the 2020 agreement, we made a$70.0 million up-front payment and purchased shares of Intellia common stock for an aggregate purchase price of$30.0 million . BARDA We and BARDA are parties to agreements pursuant to which HHS provided certain funding to develop, test, and manufacture a treatment for Ebola virus infection. InJuly 2020 , HHS exercised its option under an existing agreement to provide up to$344.6 million of additional funding for the manufacture and supply of Inmazeb. We expect to deliver a pre-specified number of Inmazeb treatment doses over the course of approximately six years.
See "Agreements Related to COVID-19 -
Kiniksa
Pursuant to a 2017 license agreement, we granted Kiniksa Pharmaceuticals, Ltd. the right to develop and commercialize certain new indications for ARCALYST. During the first quarter of 2021, Kiniksa received marketing approval inthe United States for a new indication of ARCALYST, recurrent pericarditis. The quarterly period endedMarch 31, 2021 was the last quarter for which the Company recorded net product sales of ARCALYST. Following this approval, Kiniksa is solely responsible for theU.S. development and commercialization of ARCALYST in all approved indications, and Regeneron will continue to supply clinical and commercial product to Kiniksa. Kiniksa will pay Regeneron 50% of its profits from sales of ARCALYST and the parties will not share in any losses incurred by Kiniksa in connection with commercialization of ARCALYST. Ultragenyx InJanuary 2022 we entered into a license and collaboration agreement for Ultragenyx Pharmaceutical Inc. to develop and commercialize Evkeeza in countries outside ofthe United States . In connection with the agreement, Ultragenyx made a$30.0 million non-refundable up-front payment to the Company. Ultragenyx will share in certain costs for global trials led by the 36 --------------------------------------------------------------------------------
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Company and also have the right to continue to clinically develop Evkeeza in countries outside of theU.S. We will supply commercial product to Ultragenyx at a tiered purchase price, which is calculated as a percentage of net sales of the product (subject to adjustment in certain circumstances), and are eligible to receive additional regulatory and sales milestone payments.
We have also granted Ultragenyx an exclusive option to negotiate a separate
agreement to collaborate on the development and commercialization of garetosmab
outside of
Checkmate
InApril 2022 , we entered into an Agreement and Plan of Merger (the "Merger Agreement") to acquire Checkmate Pharmaceuticals, Inc. at a total equity value of approximately$250 million . OnMay 2, 2022 , we commenced a tender offer to acquire any and all outstanding shares of common stock of Checkmate at a price of$10.50 per share, to be paid to each shareholder tendering Checkmate shares in cash, without interest, subject to reduction for any applicable withholding taxes. The consummation of the tender offer is subject to certain conditions, including the tender of at least a majority of the outstanding shares of Checkmate common stock, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. If the tender offer is successfully consummated, we will acquire all shares not acquired in the tender offer through a merger that does not require the vote of Checkmate shareholders. The transaction is expected to close in mid-2022.
General
Our ability to generate profits and to generate positive cash flow from operations over the next several years depends significantly on the continued success in commercializing EYLEA and Dupixent. We expect to continue to incur substantial expenses related to our research and development activities, a portion of which we expect to be reimbursed by our collaborators. Also, our research and development activities outside our collaborations, the costs of which are not reimbursed, are expected to expand and require additional resources. We also expect to incur substantial costs related to the commercialization of our marketed products. Our financial results may fluctuate from quarter to quarter and will depend on, among other factors, the net sales of our products; the scope and progress of our research and development efforts; the timing of certain expenses; the continuation of our collaborations, in particular with Sanofi and Bayer, including our share of collaboration profits or losses from sales of commercialized products and the amount of reimbursement of our research and development expenses that we receive from collaborators; and the amount of income tax expense we incur, which is partly dependent on the profits or losses we earn in each of the countries in which we operate. We cannot predict whether or when new products or new indications for marketed products will receive regulatory approval or, if any such approval is received, whether we will be able to successfully commercialize such product(s) and whether or when they may become profitable.
Corporate Information
We were incorporated in theState of New York in 1988 and publicly listed in 1991. Our principal executive offices are located at777 Old Saw Mill River Road ,Tarrytown, New York 10591, and our telephone number at that address is (914) 847-7000. We make available free of charge on or through our Internet website (http://www.regeneron.com) our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable, amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such material with, or furnish it to, theSecurities and Exchange Commission ("SEC"). Investors and other interested parties should note that we use our media and investor relations website (http://newsroom.regeneron.com) and our social media channels to publish important information about Regeneron, including information that may be deemed material to investors. We encourage investors and other interested parties to review the information we may publish through our media and investor relations website and the social media channels listed on our media and investor relations website, in addition to ourSEC filings, press releases, conference calls, and webcasts.
The information contained on our websites and social media channels is not included as a part of, or incorporated by reference into, this report.
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Results of Operations
Three Months Ended
Net Income
Three Months Ended
March 31,
(In millions, except per share data) 2022 2021
Revenues $ 2,965.1 $ 2,528.7
Operating expenses 1,706.6 1,416.0
Income from operations 1,258.5 1,112.7
Other income (expense) (197.4) 140.3
Income before income taxes 1,061.1 1,253.0
Income tax expense 87.6 137.8
Net income $ 973.5 $ 1,115.2
Net income per share - diluted $ 8.61 $ 10.09
Revenues
Three Months Ended
March 31,
(In millions) 2022 2021 $ Change
Net product sales in the United States :
EYLEA $ 1,517.6 $ 1,347.0 $ 170.6
Libtayo 78.9 69.1 9.8
Praluent 33.6 43.3 (9.7)
REGEN-COV - 262.2 (262.2)
Evkeeza 8.5 0.5 8.0
ARCALYST - * 2.2 *
Collaboration revenue:
Sanofi 630.9 364.8 266.1
Bayer 385.3 322.8 62.5
Roche 216.3 66.8 149.5
Other revenue 94.0 50.0 44.0
Total revenues $ 2,965.1 $ 2,528.7 $ 436.4 * Effective
Net Product Sales
Net product sales of EYLEA inthe United States increased for the three months endedMarch 31, 2022 , compared to the same period in 2021, due to higher sales volume. During the three months endedMarch 31, 2021 , we recorded net product sales of REGEN-COV in connection with our agreements with theU.S. government. As ofDecember 31, 2021 , the Company had completed its final deliveries of drug product under its agreements with theU.S. government; as a result, there were no net product sales of REGEN-COV inthe United States recorded during the three months endedMarch 31, 2022 . Refer to "Agreements Related to COVID-19 -U.S. Government " section above for further details. 38 --------------------------------------------------------------------------------
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Collaboration Revenue
Sanofi Collaboration Revenue
Three Months Ended
March 31,
(In millions) 2022 2021
Antibody:
Regeneron's share of profits in connection with
commercialization of antibodies $ 415.3 $ 260.6
Sales-based milestone earned 50.0 -
Reimbursement for manufacturing of commercial supplies(a) 160.8 105.6
Total Antibody 626.1 366.2
Regeneron's share of profits (losses) in connection with
commercialization of Libtayo outside
2.8 (6.1)
Reimbursement for manufacturing of ex-
2.0 4.7
Total Immuno-oncology 4.8 (1.4)
Total Sanofi collaboration revenue $ 630.9 $ 364.8 (a) Corresponding costs incurred by us in connection with such production is recorded within Cost of collaboration and contract manufacturing
Antibody
Global net product sales of Dupixent and Kevzara are recorded by Sanofi. Sanofi provides us with an estimate of our share of the profits or losses from commercialization of antibodies for the most recent fiscal quarter; these estimates are reconciled to actual results in the subsequent fiscal quarter, and our portion of the profits or losses is adjusted accordingly, as necessary. The increase in our share of profits in connection with commercialization of antibodies during the three months endedMarch 31, 2022 , compared to the same period of 2021, was driven by higher Dupixent profits.
Regeneron's share of profits in connection with the commercialization of Dupixent and Kevzara is summarized below:
Three Months Ended
March 31,
(In millions) 2022 2021
Dupixent and Kevzara net product sales $ 1,916.8 $ 1,332.0
Regeneron's share of collaboration profits $ 462.2 $ 289.9
Reimbursement of development expenses incurred by Sanofi in accordance with Regeneron's payment obligation
(46.9) (29.3)
Regeneron's share of profits in connection with commercialization of antibodies
$ 415.3 $ 260.6
Regeneron's share of collaboration profits as a percentage of Dupixent and Kevzara net product sales
22% 20%
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During the three months endedMarch 31, 2022 , the Company earned a$50.0 million sales-based milestone from Sanofi, upon aggregate annual sales of antibodies outsidethe United States (including Praluent) exceeding$2.0 billion on a rolling twelve-month basis. Bayer Collaboration Revenue Three Months Ended March 31, (In millions) 2022 2021 Regeneron's share of profits in connection with commercialization of EYLEA outside the United States$ 338.4 $ 308.9
Reimbursement for manufacturing of ex-
25.0 13.9
One-time payment in connection with change in Japan arrangement 21.9 -
Total Bayer collaboration revenue $ 385.3 $ 322.8 (a) Corresponding costs incurred by us in connection with such production is recorded within Cost of collaboration and contract manufacturing
Bayer records net product sales of EYLEA outsidethe United States . Bayer provides us with an estimate of our share of the profits from commercialization of EYLEA outsidethe United States for the most recent fiscal quarter; these estimates are reconciled to actual results in the subsequent fiscal quarter, and our portion of the profit is adjusted accordingly, as necessary.
Regeneron's share of profits in connection with commercialization of EYLEA
outside
Three Months Ended
March 31,
(In millions) 2022 2021
EYLEA net product sales outside the United States $
868.5 $ 811.2*
Regeneron's share of collaboration profit from sales outside
$ 353.4 $ 323.7
Reimbursement of development expenses incurred by Bayer in accordance with Regeneron's payment obligation
(15.0) (14.8)
Regeneron's share of profits in connection with
commercialization of EYLEA outside the United States $ 338.4 $ 308.9
Regeneron's share of profits as a percentage of EYLEA net
product sales outside
39% 38%
* Effective January 1, 2022 , the Company and Bayer commenced sharing equally in profits and losses based on
sales from Bayer to its distributor in Japan . Previously, the Company received from Bayer a tiered percentage
of sales based on sales by Bayer's distributor in Japan . Consequently, the prior year net product sales
amount has been revised for comparability purposes.
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Roche Collaboration Revenue
As described above under "Agreements Related to COVID-19 - Roche", Roche distributes and records net product sales of Ronapreve outsidethe United States , and the parties share gross profits from worldwide sales, depending on the amount of manufactured product supplied by each party to the market. Each quarter, a single payment is due from one party to the other to true-up the global gross profits between the parties. If Regeneron is to receive a true-up payment from Roche, such amount will be recorded to Collaboration revenue. If Regeneron is to make a true-up payment to Roche, such amount will be recorded to Cost of goods sold. During the three months endedMarch 31, 2022 and 2021, the Company recorded, within collaboration revenue,$216.3 million and$66.8 million of payments, respectively, from Roche in connection with this agreement. Roche provides us with an estimate of its gross profits for the most recent fiscal quarter; these estimates are reconciled to actual results in the subsequent fiscal quarter, and the true-up of global gross profits is adjusted accordingly, as necessary.
Other Revenue
Other revenue during the three months ended
Expenses
Three Months Ended
March 31,
(In millions, except headcount data) 2022 2021 Change
Research and development(a) $ 843.8 $ 742.9 $ 100.9
Acquired in-process research and development 28.1 - 28.1
Selling, general, and administrative(a) 450.0 405.6 44.4
Cost of goods sold(b) 207.3 183.2 24.1
Cost of collaboration and contract manufacturing(c) 197.6 124.8 72.8
Other operating (income) expense, net (20.2) (40.5) 20.3
Total operating expenses $ 1,706.6 $ 1,416.0 $ 290.6
Average headcount 10,492 9,447 1,045
(a) Includes costs incurred as well as cost reimbursements from collaborators who are not deemed to be our
customers
(b) Cost of goods sold primarily includes costs in connection with producing commercial supplies for products
that are sold by Regeneron in the United States (i.e., for which we record net product sales), any royalties we
are obligated to pay on such sales, and amounts we are obligated to pay to collaborators for their share of
gross profits.
(c) Cost of collaboration and contract manufacturing includes costs we incur in connection with producing
commercial drug supplies for collaborators and others.
Operating expenses for the three months ended
Research and Development Expenses
The following table summarizes our estimates of direct research and development
expenses by clinical development program and other significant categories of
research and development expenses. Direct research and development expenses are
comprised primarily of costs paid to third parties for clinical and product
development activities, including costs related to preclinical research
activities, clinical trials, and the portion of research and development
expenses incurred by our collaborators that we are obligated to reimburse.
Indirect research and development expenses have not been allocated directly to
each program, and primarily consist of costs to compensate personnel, overhead
and infrastructure costs to maintain our facilities, and other costs related to
activities that benefit multiple projects. Clinical manufacturing costs
primarily consist of costs to manufacture bulk drug product for clinical
development purposes as well as related external drug filling, packaging, and
labeling costs. Clinical manufacturing costs also includes pre-launch commercial
supplies which did not meet the criteria to be capitalized as inventory. The
table below also includes reimbursements of research and development expenses by
collaborators, as when we are entitled to reimbursement of all or a portion of
such expenses that we incur under a collaboration, we record those reimbursable
amounts in the period in which such costs are incurred.
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Three Months Ended
March 31,
(In millions) 2022 2021* $ Change
Direct research and development expenses:
Libtayo (cemiplimab) $ 38.6 $ 39.8 $ (1.2)
Dupixent (dupilumab) 32.1 27.4 4.7
EYLEA 24.4 28.1 (3.7)
REGEN-COV 2.7 208.8 (206.1)
Other product candidates in clinical development
and other research programs 97.9 116.0 (18.1)
Total direct research and development expenses 195.7 420.1 (224.4)
Indirect research and development expenses:
Payroll and benefits 283.8 233.0 50.8
Lab supplies and other research and development
costs 38.0 33.4 4.6
Occupancy and other operating costs 120.3 95.1 25.2
Total indirect research and development expenses 442.1 361.5 80.6
Clinical manufacturing costs 271.7 133.7 138.0
Reimbursement of research and development
expenses by collaborators (65.7) (172.4) 106.7
Total research and development expenses $ 843.8 * Certain prior year amounts have been reclassified to conform to the current year's presentation
Reimbursement of research and development expenses by collaborators included reimbursements from Roche related to REGEN-COV of$86.8 million for the three months endedMarch 31, 2021 . For the three months endedMarch 31, 2022 , reimbursements from Roche related to REGEN-COV were not material. Research and development expenses included stock-based compensation expense of$92.4 million and$69.7 million for the three months endedMarch 31, 2022 and 2021, respectively. There are numerous uncertainties associated with drug development, including uncertainties related to safety and efficacy data from each phase of drug development, uncertainties related to the enrollment and performance of clinical trials, changes in regulatory requirements, changes in the competitive landscape affecting a product candidate, and other risks and uncertainties described in Part II, Item 1A. "Risk Factors". There is also variability in the duration and costs necessary to develop a pharmaceutical product, potential opportunities and/or uncertainties related to future indications to be studied, and the estimated cost and scope of the projects. The lengthy process of seeking FDA and other applicable approvals, and subsequent compliance with applicable statutes and regulations, require the expenditure of substantial resources. Any failure by us to obtain, or delay in obtaining, regulatory approvals could materially adversely affect our business. We are unable to reasonably estimate if our product candidates in clinical development will generate material product revenues and net cash inflows.
Acquired IPR&D for the three months ended
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased for the three months endedMarch 31, 2022 , compared to the same period in 2021, primarily due to higher headcount and headcount-related costs and an increase in commercialization-related expenses for EYLEA. Selling, general, and administrative expenses also included stock-based compensation expense of$60.7 million and$50.8 million for the three months endedMarch 31, 2022 and 2021, respectively. 42
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Cost of Goods Sold
Cost of goods sold increased for the three months endedMarch 31, 2022 , compared to the same period in 2021, primarily due to$58.0 million of costs related to REGEN-COV, including inventory write-offs and reserves, partly offset by lower REGEN-COV manufacturing costs since there were no net product sales inthe United States for the three months endedMarch 31, 2022 .
Cost of Collaboration and Contract Manufacturing
Cost of collaboration and contract manufacturing increased for the three months endedMarch 31, 2022 , compared to the same period in 2021, primarily due to the recognition of manufacturing costs associated with higher sales of Dupixent and an increase in shipments of commercial supplies of Praluent for Sanofi outsidethe United States .
Other Operating (Income) Expense
Other operating expense (income), net, includes recognition of a portion of amounts previously deferred in connection with up-front and development milestone payments, as applicable, received in connection with our Sanofi immuno-oncology, Teva, and MTPC collaborative arrangements.
Other Income (Expense)
Other income (expense) was($197.4) million and$140.3 million for the three months endedMarch 31, 2022 and 2021, respectively. This change was primarily driven by the recognition of net unrealized losses on equity securities of$211.2 million for the three months endedMarch 31, 2022 compared to$143.9 million of net unrealized gains for the same period in 2021. Income Taxes Three Months Ended March 31, (In millions, except effective tax rate) 2022 2021 Income tax expense $ 87.6$ 137.8 Effective tax rate 8.3 % 11.0 % Our effective tax rate for the three months endedMarch 31, 2022 was positively impacted, compared to theU.S. federal statutory rate, primarily by income earned in foreign jurisdictions with tax rates lower than theU.S. federal statutory rate and stock-based compensation. Our effective tax rate for the three months endedMarch 31, 2021 was positively impacted, compared to theU.S. federal statutory rate, primarily by the reversal of liabilities related to uncertain tax positions, stock-based compensation, income earned in foreign jurisdictions with tax rates lower than theU.S. federal statutory rate, and federal tax credits for research activities. 43 --------------------------------------------------------------------------------
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Liquidity and Capital Resources
Our financial condition is summarized as follows:
March 31, December 31,
(In millions) 2022 2021 $ Change
Financial assets:
Cash and cash equivalents $ 3,345.7 $ 2,885.6 $ 460.1
Marketable securities - current 3,704.9 2,809.1 895.8
Marketable securities - noncurrent 7,084.0 6,838.0 246.0
$ 14,134.6 $
12,532.7
Borrowings and finance lease liabilities: Long-term debt$ 1,980.4 $ 1,980.0 $ 0.4 Finance lease liabilities $ 720.0$ 719.7 * $ 0.3 Working capital: Current assets$ 14,306.0 $ 14,014.9 $ 291.1 Current liabilities 3,007.6 3,932.5 * (924.9)$ 11,298.4 $ 10,082.4 $ 1,216.0
* Includes
As of
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