In the third quarter of 2017, net sales of EYLEA in the United States increased 12% to $953M from $854M in the third quarter of 2016.
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| [08-November-2017] |
| TARRYTOWN, N.Y., Nov. 8, 2017 /PRNewswire/ --
Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced financial results for the third quarter of 2017 and provided a business update. Financial Highlights ($ in millions, except per share data) Three Months Ended September 30, 2017 2016 % Change ---- ---- -------- EYLEA U.S. net product sales $953 $854 12% Total revenues $1,501 $1,220 23% GAAP net income $388 $265 46% GAAP net income per share - diluted $3.32 $2.27 46% Non-GAAP net income(2) $470 $365 29% Non-GAAP net income per share - diluted(2) $3.99 $3.13 27% “In the third quarter, Regeneron made significant progress with our commercialized medicines, including continued strong global sales for our retinal therapy EYLEA and the completion of enrollment in our Phase 3 PANORAMA study in diabetic retinopathy, which represents an important new potential indication for EYLEA. We also saw robust U.S. launch progress with Dupixent in moderate-to-severe atopic dermatitis, and a favorable U.S. appellate court ruling for Praluent in our ongoing PCSK9 antibody litigation,” said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron. “Looking forward, we anticipate a U.S. regulatory submission for dupilumab in uncontrolled asthma later this year and continue to advance a broad dupilumab development program in other Type 2 allergic diseases. In addition, we are making important strides in our immuno-oncology program and expect to submit our first U.S. regulatory application for cemiplimab, our PD-1 antibody, in advanced cutaneous squamous cell carcinoma in early 2018.” Business Highlights Marketed Product Update EYLEA® (aflibercept) Injection for Intravitreal Injection
Dupixent® (dupilumab) Injection
Praluent® (alirocumab) Injection for the Treatment of Elevated Low-Density Lipoprotein (LDL) Cholesterol
Kevzara® (sarilumab) Injection
Pipeline Progress Regeneron has sixteen product candidates in clinical development, which consist of EYLEA and fully human monoclonal antibodies generated using the Company’s VelocImmune® technology, including six in collaboration with Sanofi. In addition to EYLEA, Dupixent, Praluent, and Kevzara discussed above, updates from the clinical pipeline include: Cemiplimab (REGN2810), an antibody to programmed cell death protein 1 (PD-1), is being studied in patients with cancer.
Fasinumab is an antibody targeting Nerve Growth Factor (NGF). A Phase 3 efficacy study of fasinumab compared to placebo or naproxen in patients with pain due to osteoarthritis of the knee or hip was initiated in the third quarter of 2017. Suptavumab is an antibody to the Respiratory Syncytial Virus-F (RSV-F). In August 2017, the Company reported that a Phase 3 study evaluating suptavumab did not meet its primary endpoint of preventing medically-attended RSV infections in infants. Further clinical development of suptavumab has been discontinued. Select Upcoming 2017 Milestones Programs Milestones -------- ---------- EYLEA • File sBLA with FDA for every 12-week dosing interval in neovascular age-related macular degeneration (wet AMD) --- ----------------------------------------------------- Dupixent • Submit sBLA for asthma in adult/adolescent patients -------- • Initiate Phase 3 studies in younger pediatric patients in atopic dermatitis --- ----------------- Praluent • Complete ODYSSEY OUTCOMES study (with data expected in early 2018) • File sBLA with FDA for use with apheresis --- ----------------------------------------- Cemiplimab (PD-1 Antibody) • Report interim data from pivotal Phase 2 CSCC study ------------------------- --- --------------------------------------------------- Fasinumab (NGF Antibody) • Initiate Phase 3 study in patients with both chronic low back pain and osteoarthritis Nesvacumab/aflibercept • Report top-line data from Phase 2 studies in DME (RUBY) (Ang2 Antibody co-formulated and wet AMD (ONYX) with aflibercept) ---------------- REGN2477 (Activin A • Initiate Phase 2 study in patients with Fibrodysplasia Antibody) Ossificans Progressiva (FOP) -------- --------------------------- Third Quarter 2017 Financial Results Product Revenues: Net product sales were $957 million in the third quarter of 2017, compared to $857 million in the third quarter of 2016. EYLEA net product sales in the United States were $953 million in the third quarter of 2017, compared to $854 million in the third quarter of 2016. Total Revenues: Total revenues, which include product revenues described above, increased by 23% to $1.501 billion in the third quarter of 2017, compared to $1.220 billion in the third quarter of 2016. Total revenues include Sanofi and Bayer collaboration revenues of $482 million in the third quarter of 2017, compared to $336 million in the third quarter of 2016. Sanofi collaboration revenue in the third quarter of 2017 included higher reimbursements by Sanofi in connection with validating the Company’s commercial manufacturing facilities and the recognition of a higher amount of previously deferred revenue from up-front and other payments in connection with the Company’s Antibody Discovery Agreement which will end on December 31, 2017 without any extension. Refer to Table 4 for a summary of collaboration and other revenue. Research and Development (R&D) Expenses: GAAP R&D expenses were $530 million in the third quarter of 2017, compared to $543 million in the third quarter of 2016. The lower R&D expenses in the third quarter of 2017 were principally due to a $25 million up-front payment made in connection with the license and collaboration agreement with Adicet Bio in the third quarter of 2016 and a decrease in clinical manufacturing activities, partly offset by an increase in cemiplimab clinical trial costs. In addition, in the third quarter of 2017, R&D-related non-cash share-based compensation expense was $70 million, compared to $81 million in the third quarter of 2016. Selling, General, and Administrative (SG&A) Expenses: GAAP SG&A expenses were $307 million in the third quarter of 2017, compared to $270 million in the third quarter of 2016. The higher selling, general, and administrative expenses were primarily due to the launches of Dupixent and Kevzara as well as an increase in commercialization-related expenses associated with EYLEA. In the third quarter of 2017, SG&A-related non-cash share-based compensation expense was $48 million, compared to $49 million in the third quarter of 2016. Cost of Collaboration and Contract Manufacturing (COCM): GAAP COCM was $58 million in the third quarter of 2017, compared to $14 million in the third quarter of 2016. The higher COCM costs were primarily due to validation activities at the Company’s Limerick commercial manufacturing facility related to products that are in collaboration with Sanofi. Income Tax Expense: In the third quarter of 2017, GAAP income tax expense was $177 million and the effective tax rate was 31.3%, compared to $101 million and 27.6% in the third quarter of 2016. The effective tax rate for the third quarter of 2017 was positively impacted, compared to the U.S. federal statutory rate, by the tax benefit associated with stock-based compensation, the domestic manufacturing deduction, and the federal tax credit for research activities, partly offset by the negative impact of losses incurred in foreign jurisdictions with rates lower than the federal statutory rate and the non-tax deductible Branded Prescription Drug Fee. GAAP and Non-GAAP Net Income(2): The Company reported GAAP net income of $388 million, or $3.64 per basic share and $3.32 per diluted share, in the third quarter of 2017, compared to GAAP net income of $265 million, or $2.53 per basic share and $2.27 per diluted share, in the third quarter of 2016. The Company reported non-GAAP net income of $470 million, or $4.41 per basic share and $3.99 per diluted share, in the third quarter of 2017, compared to non-GAAP net income of $365 million, or $3.48 per basic share and $3.13 per diluted share, in the third quarter of 2016. A reconciliation of the Company’s GAAP to non-GAAP results is included in Table 3 of this press release. 2017 Financial Guidance(3) The Company’s updated full year 2017 financial guidance consists of the following components: EYLEA U.S. net product sales Approximately 10% growth over 2016 (reaffirmed) ---------------------------- Sanofi reimbursement of Regeneron $350 million - $375 million commercialization-related expenses (previously $370 million - $400 million) ---------------------------------- --------------------------------------- Non-GAAP unreimbursed R&D(2)(4) $885 million - $915 million (previously $925 million - $965 million) Non-GAAP SG&A(2)(4) $1.070 billion - $1.100 billion (previously $1.120 billion - $1.160 billion) Effective tax rate 26% - 29% (previously 27% - 31%) --- Capital expenditures $265 million - $285 million (previously $250 million - $285 million) --- --------------------------------------- (1) Regeneron records net product sales of EYLEA in the United States. Outside the United States, EYLEA net product sales comprise sales by Bayer in countries other than Japan and sales by Santen Pharmaceutical Co., Ltd. in Japan under a co- promotion agreement with an affiliate of Bayer. The Company recognizes its share of the profits (including a percentage on sales in Japan) from EYLEA sales outside the United States within “Bayer collaboration revenue” in its Statements of Operations. (2) This press release uses non-GAAP net income, non-GAAP net income per share, non- GAAP unreimbursed R&D, and non-GAAP SG&A, 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 other items from the related GAAP financial measure. Non-GAAP adjustments also include the income tax effect of reconciling items. 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. 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. 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 Regeneron should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with GAAP. A reconciliation of the Company’s historical GAAP to non-GAAP results is included in Table 3 of this press release. (3) The Company’s 2017 financial guidance does not assume the completion of any significant business development transactions not completed as of the date of this press release. (4) A reconciliation of full year 2017 non-GAAP to GAAP financial guidance is included below: Projected Range (In millions) Low High --- ---- GAAP unreimbursed R&D (5) $1,145 $1,190 R&D: Non-cash share-based compensation expense (260) (275) Non-GAAP unreimbursed R&D $885 $915 ---- ---- GAAP SG&A $1,270 $1,325 SG&A: Non-cash share-based compensation expense (200) (225) Non-GAAP SG&A $1,070 $1,100 ------ ------ (5) Unreimbursed R&D represents R&D expenses reduced by R&D expense reimbursements from the Company’s collaborators and/or customers. Conference Call Information Regeneron will host a conference call and simultaneous webcast to discuss its third quarter 2017 financial and operating results on Wednesday, November 8, 2017, at 8:30 AM. To access this call, dial (800) 708-4539 (U.S.) or (847) 619-6396 (International). A link to the webcast may be accessed from the “Events” page of Regeneron’s website at http://investor.regeneron.com/events.cfm. A replay of the conference call and webcast will be archived on the Company’s website and will be available for 30 days. About Regeneron Pharmaceuticals, Inc. Regeneron is a leading biotechnology company that invents life-transforming medicines for people with serious diseases. Founded and led for nearly 30 years by physician-scientists, Regeneron’s unique ability to repeatedly and consistently translate science into medicine has led to six FDA-approved treatments and over a dozen product candidates in development, all of which were homegrown in Regeneron’s laboratories. Regeneron’s medicines and pipeline are designed to help patients with eye disease, heart disease, allergic and inflammatory diseases, pain, cancer, infectious diseases, and rare diseases. Regeneron is accelerating and improving the traditional drug development process through its proprietary VelociSuite® technologies, including VelociGene® and VelocImmune® to yield optimized fully human antibodies, and ambitious initiatives such as the Regeneron Genetics Center, one of the largest genetics sequencing efforts in the world. For additional information about the Company, please visit www.regeneron.com or follow @Regeneron on Twitter. 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 Regeneron’s products, product candidates, and research and clinical programs now underway or planned; the likelihood and timing of achieving any of the anticipated milestones described in this news release; unforeseen safety issues resulting from the administration of products and product candidates in patients, including serious complications or side effects in connection with the use of Regeneron’s product candidates in clinical trials; the likelihood and timing of possible regulatory approval and commercial launch of Regeneron’s late-stage product candidates and new indications for marketed products, including without limitation EYLEA® (aflibercept) Injection, Dupixent® (dupilumab) Injection, Praluent® (alirocumab) Injection, Kevzara® (sarilumab) Injection, cemiplimab, and fasinumab; the extent to which the results from the research and development programs conducted by Regeneron or its collaborators may be replicated in other studies and lead to therapeutic applications; ongoing regulatory obligations and oversight impacting Regeneron’s marketed products (such as EYLEA, Dupixent, Praluent, and Kevzara), 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 product candidates; competing drugs and product candidates that may be superior to Regeneron’s products and product candidates; uncertainty of market acceptance and commercial success of Regeneron’s products and product candidates and the impact of studies (whether conducted by Regeneron or others and whether mandated or voluntary), on the commercial success of Regeneron’s products and 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 to perform filling, finishing, packaging, labeling, distribution, and other steps related to Regeneron’s products and product candidates; coverage and reimbursement determinations by third-party payers, including Medicare and Medicaid; unanticipated expenses; the costs of developing, producing, and selling products; the ability of Regeneron to meet any of its sales or other financial projections or guidance and changes to the assumptions underlying those projections or guidance, including without limitation those relating to EYLEA U.S. net product sales, Sanofi reimbursement of Regeneron commercialization-related expenses, non-GAAP unreimbursed R&D, non-GAAP SG&A, effective tax rate, and capital expenditures; the potential for any license or collaboration agreement, including Regeneron’s agreements with Sanofi, Bayer, and Teva Pharmaceutical Industries Ltd. (or their respective affiliated companies, as applicable), to be cancelled or terminated without any further product success; and risks associated with intellectual property of other parties and pending or future litigation relating thereto, including without limitation the patent litigation proceedings relating to Praluent, the ultimate outcome of any such litigation proceedings, 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, 2016 and its Form 10-Q for the quarterly period ended September 30, 2017. 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 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 (http://newsroom.regeneron.com) and its Twitter feed (http://twitter.com/regeneron). 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 historical non-GAAP financial measures. Contact Information: Manisha Narasimhan, Ph.D. Hala Mirza Investor Relations Corporate Communications 914-847-5126 914-847-3422 manisha.narasimhan@regeneron.com hala.mirza@regeneron.com
TABLE 1 REGENERON PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) September 30, December 31, 2017 2016 ---- ---- Assets: Cash and marketable securities $2,706,247 $1,902,944 Accounts receivable - trade, net 1,532,693 1,343,368 Accounts receivable from Sanofi and Bayer 438,756 268,252 Inventories 641,588 399,356 Property, plant, and equipment, net 2,274,529 2,083,421 Deferred tax assets 927,023 825,303 Other assets 180,379 150,822 Total assets $8,701,215 $6,973,466 ========== ========== Liabilities and stockholders’ equity: Accounts payable, accrued expenses, and other liabilities $943,985 $980,659 Deferred revenue 1,003,320 1,062,436 Capital and facility lease obligations 702,317 481,126 Stockholders’ equity 6,051,593 4,449,245 Total liabilities and stockholders’ equity $8,701,215 $6,973,466 ========== ==========
TABLE 2 REGENERON PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 ---- ---- ---- ---- Revenues: Net product sales $957,367 $857,468 $2,739,745 $2,475,869 Sanofi collaboration revenue 245,175 144,392 677,670 527,500 Bayer collaboration revenue 236,625 191,298 640,919 562,786 Other revenue 61,506 26,964 231,446 67,445 ------ ------ ------- ------ 1,500,673 1,220,122 4,289,780 3,633,600 --------- --------- --------- --------- Expenses: Research and development 529,749 543,047 1,547,159 1,573,089 Selling, general, and administrative 306,766 270,045 910,520 851,760 Cost of goods sold 46,388 29,901 149,774 150,090 Cost of collaboration and contract manufacturing 57,844 14,327 141,547 74,923 ------ ------ ------- ------ 940,747 857,320 2,749,000 2,649,862 ------- ------- --------- --------- Income from operations 559,926 362,802 1,540,780 983,738 ------- ------- --------- ------- Other income (expense), net 5,679 3,079 (17,036) 4,550 ----- ----- ------- ----- Income before income taxes 565,605 365,881 1,523,744 988,288 Income tax expense (177,288) (101,077) (498,752) (345,881) -------- -------- -------- -------- Net income $388,317 $264,804 $1,024,992 $642,407 ======== ======== ========== ======== Net income per share - basic $3.64 $2.53 $9.66 $6.14 Net income per share - diluted $3.32 $2.27 $8.84 $5.51 Weighted average shares outstanding - basic 106,706 104,833 106,108 104,586 Weighted average shares outstanding - diluted 117,028 116,466 115,994 116,567
TABLE 3 REGENERON PHARMACEUTICALS, INC. RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME (Unaudited) (In thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 ---- ---- ---- ---- GAAP net income $388,317 $264,804 $1,024,992 $642,407 Adjustments: R&D: Non-cash share-based compensation 70,123 80,572 213,174 237,991 expense R&D: Upfront payments related to license and - 25,000 - 100,000 collaboration agreements SG&A: Non-cash share-based compensation 47,672 49,369 146,192 157,181 expense COGS and COCM: Non-cash share-based 7,302 1,438 20,778 10,148 compensation expense Other expense: Loss on extinguishment of debt - - 30,100 466 Income tax effect of reconciling items above (42,958) (56,210) (141,458) (181,558) ------- ------- -------- -------- Non-GAAP net income $470,456 $364,973 $1,293,778 $966,635 ======== ======== ========== ======== Non-GAAP net income per share - basic $4.41 $3.48 $12.19 $9.24 Non-GAAP net income per share - diluted $3.99 $3.13 $11.09 $8.28 Shares used in calculating: Non-GAAP net income per share - basic 106,706 104,833 106,108 104,586 Non-GAAP net income per share - diluted 117,819 116,644 116,616 116,764
TABLE 4 REGENERON PHARMACEUTICALS, INC. COLLABORATION AND OTHER REVENUE (Unaudited) (In thousands) Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 ---- ---- ---- ---- Sanofi collaboration revenue: Reimbursement of Regeneron research and $190,188 $167,615 $609,464 $567,074 development expenses Reimbursement of Regeneron 90,339 64,418 251,002 213,957 commercialization-related expenses Regeneron’s share of losses in connection with (98,315) (112,001) (328,998) (333,530) commercialization of antibodies Other 62,963 24,360 146,202 79,999 Total Sanofi collaboration revenue 245,175 144,392 677,670 527,500 ------- ------- ------- ------- Bayer collaboration revenue: Regeneron’s net profit in connection with 205,367 170,854 571,126 484,181 commercialization of EYLEA outside the United States Reimbursement of Regeneron development 13,378 9,652 26,447 21,351 expenses Other 17,880 10,792 43,346 57,254 Total Bayer collaboration revenue 236,625 191,298 640,919 562,786 ------- ------- ------- ------- Total Sanofi and Bayer collaboration revenue $481,800 $335,690 $1,318,589 $1,090,286 ======== ======== ========== ========== Other revenue: Reimbursement of Regeneron research and $28,537 $3,064 $82,068 $3,064 development expenses - Teva Reimbursement of Regeneron research and 150 933 3,562 1,553 development expenses - other Substantive development milestones - - 55,000 - Other 32,819 22,967 90,816 62,828 Total other revenue $61,506 $26,964 $231,446 $67,445 ======= ======= ======== =======
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Company Codes: NASDAQ-NMS:REGN |
