TARRYTOWN, N.Y., Aug. 01, 2024 (GLOBE NEWSWIRE) — Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced financial results for the second quarter of 2024 and provided a business update.
“Regeneron had a strong quarter, with total revenue up 12% driven by notable growth for EYLEA HD, Dupixent, and Libtayo,” said Leonard S. Schleifer, M.D., Ph.D., Board co-Chair, President and Chief Executive Officer of Regeneron. “Importantly, Dupixent was granted its first regulatory approval for COPD by the European Commission, with FDA action anticipated in the third quarter, presenting an opportunity to help even more patients around the globe. As always, we remain focused on driving forward our diverse clinical pipeline, progressing late-stage trials for Dupixent in chronic spontaneous urticaria and other dermatologic indications; itepekimab, our IL-33 antibody in COPD; fianlimab, our LAG-3 antibody in metastatic melanoma; and Libtayo in adjuvant cutaneous squamous cell carcinoma. Finally, we were excited to advance several promising earlier-stage programs, including various antibody and GLP-1 combinations for obesity and our gene therapy DB-OTO for genetic hearing loss.”
| Financial Highlights
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| ($ in millions, except per share data) | Q2 2024 | Q2 2023 | % Change | ||||||
| Total revenues | $ | 3,547 | $ | 3,158 | 12 | % | |||
| GAAP net income | $ | 1,432 | $ | 968 | 48 | % | |||
| GAAP net income per share – diluted | $ | 12.41 | $ | 8.50 | 46 | % | |||
| Non-GAAP net income(a) | $ | 1,351 | $ | 1,182 | 14 | % | |||
| Non-GAAP net income per share – diluted(a) | $ | 11.56 | $ | 10.24 | 13 | % | |||
“Our second quarter financial performance reflects continued strong momentum across our business, highlighted by double-digit revenue and earnings growth,” said Christopher Fenimore, Senior Vice President, Finance and Chief Financial Officer of Regeneron. “In the second half of the year, we look forward to advancing our pipeline with several important clinical data readouts as well as continued commercial execution and prudent capital deployment to drive long-term value creation.”
Business Highlights
Key Pipeline Progress
Regeneron 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 June 2024, a supplemental Biologics License Application (sBLA) with two-year data for wet age-related macular degeneration (wAMD) and diabetic macular edema (DME) was submitted to the U.S. Food and Drug Administration (FDA).
Dupixent (dupilumab)
- In May 2024, after requesting additional efficacy analyses, the FDA extended by three months the target action date of its priority review of the sBLA for Dupixent as an add-on maintenance treatment in certain adult patients with uncontrolled COPD, with a revised target action date of September 27, 2024. Regeneron and Sanofi remain confident that the additional analyses strongly support the approval of Dupixent in COPD with evidence of type 2 inflammation, and are committed to working with the FDA to bring Dupixent to patients living with uncontrolled COPD as quickly as possible.
- In June 2024, the European Commission (EC) approved Dupixent as an add-on maintenance treatment for adults with uncontrolled COPD characterized by raised blood eosinophils. The EC is the first regulatory authority in the world to have approved Dupixent for COPD patients. Additional submissions are under review with other regulatory authorities outside the United States, including in China and Japan.
- The Company and Sanofi presented at the 2024 American Thoracic Society International Conference positive data from the NOTUS Phase 3 trial evaluating Dupixent as an add-on maintenance treatment in adults with uncontrolled COPD on maximal standard-of-care inhaled therapy (nearly all on triple therapy) and evidence of type 2 inflammation. The NOTUS trial confirmed the positive results demonstrated in the Phase 3 BOREAS trial. The data from the NOTUS trial were also published in the New England Journal of Medicine (NEJM).
- The FDA accepted for priority review the sBLA for Dupixent as an add-on maintenance treatment for adolescents aged 12 to 17 years with inadequately controlled chronic rhinosinusitis with nasal polyposis (CRSwNP), with a target action date of September 15, 2024.
- The NEJM published results from a positive Phase 3 trial for Dupixent in children aged 1 to 11 years with eosinophilic esophagitis (EoE). The trial showed a greater proportion of those receiving weight-tiered higher dose Dupixent experienced significant improvements in many key disease measures of EoE, compared to placebo at week 16.
Oncology Programs
- The European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion recommending conditional marketing authorization of odronextamab, a bispecific antibody targeting CD20 and CD3, to treat adults with relapsed/refractory (R/R) follicular lymphoma (FL) or R/R diffuse large B-cell lymphoma (DLBCL), after two or more lines of systemic therapy. The EC is expected to announce a final decision in the coming months.
- In June 2024, the 14-month median follow-up data from the pivotal Phase 1/2 trial of linvoseltamab, a bispecific antibody targeting BCMA and CD3, in patients with R/R multiple myeloma were presented at the European Hematology Association (EHA) Congress 2024 and published in the Journal of Clinical Oncology. These longer-term results show a deepening of responses following the 11-month median follow-up data previously presented in April 2024.
- A Phase 2 study for fianlimab, an antibody to LAG-3, in combination with Libtayo (cemiplimab) for perioperative non-small cell lung cancer (NSCLC) was initiated. A Phase 2/3 study for fianlimab, in combination with Libtayo, for perioperative melanoma was also initiated.
- The Company announced positive updated results from an ongoing Phase 1/2 trial evaluating REGN7075, a costimulatory bispecific antibody targeting EGFR and CD28, in combination with Libtayo in patients with advanced solid tumors. Data from the dose-escalation portion of the trial showed the investigational combination led to anti-tumor responses in certain patients with microsatellite stable colorectal cancer. The results were shared during an oral presentation at the American Society of Clinical Oncology (ASCO) 2024 Annual Meeting.
Other Programs
- In June 2024, the FDA approved Kevzara® (sarilumab) for the treatment of patients weighing 63 kg or greater with active polyarticular juvenile idiopathic arthritis (pJIA), a form of arthritis that impacts multiple joints at a time.
- A Phase 2 study in obesity was initiated for trevogrumab, an antibody to myostatin (GDF8), in combination with semaglutide with and without garetosmab, an antibody to Activin A.
- A Phase 2 study for REGN7508, an antibody to Factor XI, was initiated in patients with thrombosis.
- The Company presented updated data from the Phase 1/2 trial of DB-OTO, an AAV-based gene therapy, at the American Society of Gene and Cell Therapy (ASGCT) annual conference and announced that DB-OTO improved hearing to normal levels in one child and that initial hearing improvements were observed in a second child. In addition, the FDA recently granted DB-OTO Regenerative Medicine Advanced Therapy (RMAT) designation for the treatment of congenital auditory neuropathy secondary to biallelic mutations of the otoferlin gene.
| Second Quarter 2024 Financial Results
Revenues
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| ($ in millions) | Q2 2024 | Q2 2023 | % Change | |||||||
| Net product sales: | ||||||||||
| EYLEA HD – U.S. | $ | 304 | $ | — | * | |||||
| EYLEA – U.S. | 1,231 | 1,500 | (18 | %) | ||||||
| Total EYLEA HD and EYLEA – U.S. | 1,535 | 1,500 | 2 | % | ||||||
| Libtayo – Global | 297 | 210 | 41 | % | ||||||
| Praluent – U.S. | 56 | 41 | 37 | % | ||||||
| Evkeeza®– U.S. | 31 | 19 | 63 | % | ||||||
| Inmazeb®– Global | — | 2 | (100 | %) | ||||||
| Total net product sales | 1,919 | 1,772 | 8 | % | ||||||
| Collaboration revenue: | ||||||||||
| Sanofi | 1,146 | 944 | 21 | % | ||||||
| Bayer | 375 | 377 | (1 | %) | ||||||
| Other | 3 | (4 | ) | * | ||||||
| Other revenue | 104 | 69 | 51 | % | ||||||
| Total revenues | $ | 3,547 | $ | 3,158 | 12 | % | ||||
| * Percentage not meaningful | ||||||||||
Total EYLEA HD and EYLEA net product sales in the U.S. increased 2% in the second quarter of 2024 compared to the second quarter of 2023. EYLEA HD was approved by the FDA in August 2023 and EYLEA HD net product sales in the second quarter of 2024 were driven by the transition of patients from other anti-VEGF products, including EYLEA, to EYLEA HD, as well as new patients naïve to anti-VEGF therapy. Net product sales of EYLEA decreased in the second quarter of 2024, compared to the second quarter of 2023, primarily due to (i) the aforementioned approval and transition of certain patients to EYLEA HD, and (ii) other market dynamics that resulted in lower volumes and a lower net selling price.
Sanofi collaboration revenue increased in the second quarter of 2024, compared to the second quarter of 2023, due to the Company’s share of profits from commercialization of antibodies, which were $988 million in the second quarter of 2024, compared to $751 million in the second quarter of 2023. The change in the Company’s share of profits from commercialization of antibodies was driven by higher profits associated with an increase in Dupixent sales.
Refer to Table 4 for a summary of collaboration revenue.
| Operating Expenses |
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| GAAP | % Change |
Non-GAAP(a) | % Change |
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| ($ in millions) | Q2 2024 | Q2 2023 | Q2 2024 | Q2 2023 | |||||||||||||||
| Research and development (R&D) | $ | 1,200 | $ | 1,085 | 11 | % | $ | 1,072 | $ | 974 | 10 | % | |||||||
| Acquired in-process research and development (IPR&D) |
$ | 24 | $ | — | ** | * | * | n/a | |||||||||||
| Selling, general, and administrative (SG&A) |
$ | 759 | $ | 652 | 16 | % | $ | 667 | $ | 562 | 19 | % | |||||||
| Cost of goods sold (COGS) | $ | 258 | $ | 192 | 34 | % | $ | 214 | $ | 163 | 31 | % | |||||||
| Cost of collaboration and contract manufacturing (COCM) |
$ | 222 | $ | 213 | 4 | % | * | * | 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 second quarter of 2024, compared to the second 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 the second quarter of 2024 included up-front payments, as well as a premium on equity securities purchased, in connection with collaboration and licensing agreements.
- GAAP and non-GAAP SG&A expenses increased in the second quarter of 2024, compared to the second 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 partly related to the Company’s international commercial expansion.
- GAAP and non-GAAP COGS increased in the second quarter of 2024, compared to the second quarter of 2023, primarily due to higher start-up costs for the Company’s Rensselaer, New York fill/finish facility.
- GAAP other operating expense (income), net, for the second 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 gains on equity securities of $393 million in the second quarter of 2024, compared to $31 million of net unrealized losses in the second quarter of 2023. GAAP and Non-GAAP other income (expense) also included interest income of $179 million in the second quarter of 2024, compared to $118 million in the second quarter of 2023.
In the second quarter of 2024, the Company’s GAAP effective tax rate (ETR) was 12.0%, compared to 10.6% in the second quarter of 2023. The GAAP ETR increased in the second quarter of 2024, compared to the second quarter of 2023, due to the remeasurement of existing uncertain tax positions, offset by a higher benefit from stock-based compensation. In the second quarter of 2024, the non-GAAP ETR was 10.8%, compared to 12.2% in the second quarter of 2023.
GAAP net income per diluted share was $12.41 in the second quarter of 2024, compared to $8.50 in the second quarter of 2023. Non-GAAP net income per diluted share was $11.56 in the second quarter of 2024, compared to $10.24 in the second quarter of 2023. A reconciliation of the Company’s GAAP to non-GAAP results is included in Table 3 of this press release.
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. During the second quarter of 2024, the Company repurchased shares of its common stock and recorded the cost of the shares, or $601 million, as Treasury Stock. As of June 30, 2024, an aggregate of $3.6 billion remained available for share repurchases under the Company’s share repurchase programs.
2024 Financial Guidance(c)
The Company’s full year 2024 financial guidance consists of the following components:
| 2024 Guidance | ||||
| Prior | Updated | |||
| GAAP R&D | $4.920–$5.170 billion | $5.020–$5.170 billion | ||
| Non-GAAP R&D(a) | $4.400–$4.600 billion | $4.500–$4.600 billion | ||
| GAAP SG&A | $2.940–$3.090 billion | $2.920–$3.060 billion | ||
| Non-GAAP SG&A(a) | $2.550–$2.650 billion | Unchanged | ||
| GAAP gross margin on net product sales(d) | 86%–88% | Approximately 86% | ||
| Non-GAAP gross margin on net product sales(a)(d) | 89%–91% | Approximately 89% | ||
| COCM(e)* | $850–$910 million | Unchanged | ||
| Capital expenditures* | $780–$880 million | $750–$820 million | ||
| GAAP effective tax rate | 7%–9% | 8%–9% | ||
| Non-GAAP effective tax rate(a) | 10%–12% | 10%–11% | ||
| * GAAP and non-GAAP amounts are equivalent as no non-GAAP adjustments have been or are expected to be recorded. | ||||
A reconciliation of full year 2024 GAAP to non-GAAP financial guidance is included below:
| Projected Range | ||||||||
| ($ in millions) | Low | High | ||||||
| GAAP R&D | $ | 5,020 | $ | 5,170 | ||||
| Stock-based compensation expense | 510 | 540 | ||||||
| Acquisition and integration costs | 10 | 30 | ||||||
| Non-GAAP R&D | $ | 4,500 | $ | 4,600 | ||||
| GAAP SG&A | $ | 2,920 | $ | 3,060 | ||||
| Stock-based compensation expense | 330 | 350 | ||||||
| Acquisition and integration costs | 40 | 60 | ||||||
| Non-GAAP SG&A | $ | 2,550 | $ | 2,650 | ||||
| GAAP gross margin on net product sales | Approximately 86% | Approximately 86% | ||||||
| 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 | Approximately 89% | Approximately 89% | ||||||
| GAAP ETR | 8 | % | 9 | % | ||||
| Income tax effect of GAAP to non-GAAP reconciling items |
2 | % | 2 | % | ||||
| Non-GAAP ETR | 10 | % | 11 | % | ||||
| (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™(b), 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. |
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.
