Q3 2019 Earnings Call

Thank you for halting further Regeneron Pharmaceuticals third quarter 2019 earnings Conference call. This conference call will begin in approximately two minutes. That's again, thank you for your patience.

Operator: Thank you for holding for the Regeneron Pharmaceuticals 3rd Quarter 2019 Earnings Conference Call. This conference call will begin in approximately two minutes. Again, thank you for your patience. Thanks for watching!

Good morning, welcome to the Regeneron Pharmaceuticals third quarter 2019 earnings Conference call. My name is Sheryl and I won't be your operator for today's call. At this time all participants are enough listen only mode. Later, we will conduct a question and answer session. During the question answer session. If you.

Operator: Good morning and welcome to the Regeneron Pharmaceuticals 3rd Quarter 2019 Earnings Conference Call. My name is Cheryl and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press star, then 1 on your touchtone phone. Please note that this conference call is being recorded. I will now turn the call over to Justin Holko, sir, you may begin.

Ever question. Please press Star then one on your Touchtone phone.

Please note that this conference call is being recorded I would now I'll turn the call arbitrary just didn't holdco, Sir you may begin.

Thank you Sheryl good morning, good afternoon, and good evening, everyone listening around the world. Thank you for your interest in Regeneron Pharmaceuticals, and welcome to the third quarter 2019 conference call. An archive of this webcast will be available on our website.

Justin Holko: Thank you Cheryl. Good morning, good afternoon, and good evening to everyone listening around the world. Thank you for your interest in Regeneron Pharmaceuticals and welcome to the third quarter 2019 conference call. An archive of this webcast will be available on our website. Joining me today on the call are Dr. Leonard Schleifer, Founder, President, and Chief Executive Officer, Dr. George Yancopoulos, Founding Scientist, President, and Chief Scientific Officer, Marion McCourt, Senior Vice President and Head of Commercial, and Bob Landry, Executive Vice President and Chief Financial Officer. After our prepared remarks, we will open the call for Q&A. I would also like to remind you that remarks made on this call today include four looking statements about Regeneron. Such statements may include, but are not limited to, those related to Regeneron and its products and business, financial forecast and guidance, development programs and related anticipated milestones, collaborations, finances, regulatory matters, payer coverage and reimbursement issues, intellectual property, pending litigation, and competition.

Joining me today on the call are Dr., Leonard Schleifer, founder President and Chief Executive Officer, Dr., George Yancopoulos founding scientist, President and Chief Scientific Officer, Merian Mccourt Senior Vice President and head of commercial and Bob Landry Executive Vice President and Chief Financial Officer.

After our prepared remarks, well open the call for QNX.

I would also like to remind you that remarks made on this call. Today include forward looking statements about regeneron.

Such statements May include but are not limited to those related to regeneron and its products in business financial forecast some guidance development programs and related anticipated milestones.

Aberrations finances regulatory matters payer coverage and reimbursement issues intellectual property pending litigation and competition.

Justin Holko: This statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement. A more complete description of these and other material risks can be found in Regeneron's filings with the United States Securities and Exchange Commission, including its Form 10-Q for the quarterly period ended September 30, 2019, which has been filed with the SEC today. Regeneron does not undertake any obligation to update publicly any forward-looking statements whether as a result of new information future events or otherwise, In addition, please note that GAAP and non-GAAP measures will be discussed on today's call. Information regarding our use of non-GAAP financial measures and a reconciliation of those measures to GAAP is available in our financial results press release, which can be accessed on our website. Once our call concludes, Bob Landry and the IR team will be available to answer further questions. With that, let me turn the call over to our President and Chief Executive Officer, Dr. Len Schleifer.

These forward looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected and that statement.

More complete description of these and other material risks can be found in Regenerons filings with the United States Securities and Exchange Commission, including its Form 10-Q , four the quarterly period ended September Thirtyth 2019, which has been filed with the FCC today.

Regeneron does not undertake any obligation to update publicly any forward looking statements whether as a result of new information future events or otherwise. In addition, please note that GAAP and non-GAAP measures will be discussed on todays call information regarding our use of non-GAAP financial measures and a reconciliation of.

Those measures to GAAP is available in our financial results press release, which can be accessed on our web site.

Since our call concludes Bob Landry in the IR team will be available to answer further questions with that let me turn the call over to our President and Chief Executive Officer, Dr. lunch Lifer [noise].

Leonard S. Schleifer: Thanks Justin, thanks to everyone who is joining the call today. We had another great quarter marked by continued execution to deliver double digit top and bottom line growth while making progress with our innovative R&D engine. ILEA global net sales grew 14% to $1.9 billion, including U.S. ILEA net sales growth of 16% to $1.2 billion. We continue to build on our leadership position in retinal diseases with market share gains across wet age related macular degeneration and diabetic eye diseases. Dupixent continued to deliver strong growth while transforming the lives of thousands of patients around the world suffering from a number of type 2 inflammatory diseases. Global net sales of Dupixent are now annualizing at more than $2.5 billion, launches in atopic dermatitis, asthma, and chronic rhinosinusitis with nasal polyps are generating broad-based growth for this important brand.

Thanks, Justin Thanks to everyone who's joining the call today, we had another great quarter marked by continued execution to deliver double digit top and bottom line growth, while making progress with innovative R&D engine.

Hi, Lee at Global net sales grew 14% to 1.9 billion, including U.S. I lead net sales growth of 16% to 1.2 billion. We continued to build on our leadership position in retinal diseases with market share gains across wet age related macular did.

Generation and diabetic eye diseases.

Dupixent continued to deliver strong growth, while transforming the lives of thousands of patients around the world suffering from a number of type two inflammatory diseases.

Global net sales of Dupixent are now annualizing at more than two and a half billion.

Launches in a atopic dermatitis asthma and chronic rhinosinusitis would nasal polyps by generating broad based growth for this important Brett we still in the early days of Dupixent as approvals around the world continue and our enthusiasm continues to increase.

Leonard S. Schleifer: We're still in the early days of Dupixen as approvals around the world continue and our enthusiasm continues to increase. And the strength of the performance of Dupixent, we generated improved profitability for our own, for our antibody collaboration with Sanofi. We expect profits to continue to increase, further diversifying our earnings base, driven by growth in Dupixent, as well as effective cost management across the collaboration. Importantly, our efforts in oncology are bearing fruit in the form of global launches of Libtio, our anti-PD-1 therapy in cutaneous squamous cell carcinoma, as well as new data from Libtio in lung cancer and our portfolio of innovative biospecific antibodies, including our BCMA antibody in multiple myeloma. We aim to be a leader in immuno-oncology by bringing important new treatments to patients with both blood and solid tumor cancer. Beyond oncology, we have novel programs that have generated significant late-stage results that we intend to file with regulators, such as evanacumab and homozygous familial hypercholesterolemia. Similarly, results from the Palm Study in the Democratic Republic of Congo demonstrated that our antibody combination was superior to the standard of care in preventing death from Ebola in the recent outbreak.

And the strength of the performance of Dupixent, we generated improved profitability for our own Fry antibody collaboration with Sanofi, We expect profits due to continued to increase further diversifying earnings base driven by growth in Dupixent as well as effective cost management across the collaboration.

Importantly, our efforts in oncology are bearing fruit in the form of global launches of live tie up our anti PD one therapy in cutaneous squamous cell carcinoma, as well as new data from the live tie in lung cancer and our portfolio of innovative by specific antibodies include.

In our B C M a antibody in multiple myeloma.

We aim to be a leader in immuno oncology by bringing important new treatments to patients with blood and solid tumor cancers.

Beyond oncology, we have novel programs that have generated significant late stage results that we intend to file with regulators such as had been accu mapping homozygous familial hypercholesterolemia [noise].

Similarly results from the Palm study and the Democratic Republic of condo demonstrated that our antibody combination with superior to the standard of care and preventing got from a bolus in the recent outbreak. We expect further pipeline read outs by the end of year as George will speak to in a few moments.

Leonard S. Schleifer: We expect further pipeline readouts by the end of the year, as George will speak to in a few moments. Taken together, we continue to demonstrate that Regeneron has the talent and track record to tackle some of the world's most scientifically challenging health issues while creating long-term value for shareholders. We continue to execute on our strategy and as a result are in a strong financial position. We think carefully about our capital and how to deploy it strategically. As such, we will continue to invest in R&D as we have shown that those investments have generated significant value for shareholders and for patients. Business development efforts will continue as we seek the best science and capabilities to pair with our own innovation. Beyond R&D, and based upon our confidence in the business to deliver value, both in the short and longer term, we are initiating a $1 billion stock buyback program. These are exciting times for Regeneron. We have strong momentum as we head into the end of the year and into 2020. Now I'll turn the call over to George.

Taken together, we can we continue to demonstrate that regeneron has the talent and track record to tackle some of the world's most scientifically challenging health issues, while creating long term value for shareholders.

We continue to execute on our strategy and it was so and as a result, I mean, its strong financial position.

We think carefully about how cat about capital and how to deploy it strategically.

As such we will continue to invest in R&D as we've shown that those investments have generated significant value for shareholders and for patients.

Business development efforts will continue as we seek the best science and capabilities to pair with our own innovations.

Beyond R&D and based upon a confidence in the business due to deliver value both in the short and longer term, we are initiating a $1 billion stock buyback program.

These are exciting times regeneron, we have strong momentum as we head into the ended the year and into 2020 now I'll turn the call over to John .

George D. Yancopoulos: Thanks, Alain. I will begin with Dupic's. There is nothing more gratifying than hearing directly from so many individuals, about how it depicts and changed their lives after years of suffering from diseases such as asthma, atopic dermatitis, and nasal polyposis. Just last week, a co-worker shared her story, how she was dreading her fourth surgery for nasal polyposis, and instead convinced her doctor to try to pick... Not only did her nasal polyposis vanish without surgery, but her comorbid asthma also dramatically improved. Such stories reflect the science behind DUPIC's, Many patients suffer from a body-wide hyperactivation of the type 2 immune pathway, which manifests in disease at many different sites, including the lungs, skin, upper respiratory system and even GI tract. Dupixen can be life-changing as it can reverse the systemic type 2 hyperactivity, thus simultaneously treating multiply apparent distinct disease entities. The other remarkable aspect of Dupixent is its safety profile. Since type 2 hyperactivity is often counterproductive, dupixent is not immunosuppressive. Across all of our studies, we have not seen increases in serious infections.

[noise] Thanks Len.

I will begin with Dupixent.

There was nothing more gratifying then hearing directly from so many individuals about how to pick some change their lives after years of suffering from diseases, such as asthma, hey, topic dermatitis and nasal polyposis, just last week a co worker shared her story, how she was driving her fourth surgery.

Nasal polyposis, and instead convince or doctor to try to pyxis not only get her nasal polyposis vanish without surgery, but her co morbid asthma also dramatically improved.

Such stories reflect the science behind Dupixent.

Many patients suffer from a body why hyper activation of the type to mean pathway, which manifesting disease at many different sites, including the lungs skin upper respiratory system and even G. I track.

Dupixent can be life changing as it can reverse the systemic type two hikes group hyperactivity.

Simultaneously treating multiply the apparent distinct disease entities.

The other remarkable aspect of Dupixent is it safety profile since type two hyper activity is often counterproductive dupixent is not immuno suppressive.

Across all of our studies, we have not seen increases in serious infections in fact.

George D. Yancopoulos: In fact, In our AD studies, where people are prone to skin infections, we actually have seen a numeric decrease. Dupik's an opportunity is growing in several ways, by expanding to new territories, to younger age groups, and to new type 2 diseases. For example, the nasal polyposis indication was recently approved by the European Commission. We are submitting for atopic dermatitis in the pediatric population later this year and we are enrolling phase 3 studies in eosinophilic esophagitis and chronic obstructive pulmonary disease. In addition, there are numerous ongoing or soon-to-be-initiated trials in additional type 2 diseases, including bolus pemphigoid, prurigo nodularis, chronic spontaneous urticaria, hand and foot atopic dermatitis, alopecia areata, and allergic bronchopulmonary aspergillosis. We're also very excited about the potential of Dupixent to accelerate and enhance allergen desensitization.

In our E D studies, where people are prone to skin infections, we actually have seen in numeric decrease infections.

The depicts an opportunity is growing in several ways by expanding to new territories to younger age groups and two new type two diseases. For example, the nasal polyposis indication was recently approved by the European Commission.

We're submitting freight topic dermatitis and the pediatric population later this year and we enrolling phase three studies eosinophilic esophagitis in chronic obstructive pulmonary disease. In addition, there are numerous ongoing or seem to be initiated trials in additional type two diseases, including bullous Pemphigoid Perrigo notch alaris chronic spontaneous.

For a carrier hands and put a topic dermatitis, LPG ariad and allergic bronco pulmonary aspergillosis.

We're also very excited about the potential dupixent to accelerate and enhance Allergan desensitization.

George D. Yancopoulos: Our combination trial with Immunotherapy for Grass Allergy will be presented at a future medical conference. And data in combination with AMUNES AR101 for Peanut Allergy are planned for late next, Related Georgia PIXEN efforts, we are expecting readout of our interleukin 33 antibody Regeneron 3500, in Atopic Dermatitis and COPD over the coming years. As you know, depiction is currently approved for uncontrolled moderate to severe asthma and atopic dermatitis and is not approved in earlier stages of these.

Our combination trial with immunotherapy progress LNG will be presented at a future medical conference and date in combination with Aimmune here why don't want for peanut allergy a planned for late next year.

Ladies Georgia picks and efforts, we're expecting read out of our interleukin 33 antibody Regeneron 3500.

In a topic I'm retired isn't C O Pee dee over the coming year.

As you know Dupixent is currently approved for uncontrolled moderate to severe asthma nay top dermatitis and there's not approved an earlier stages of these disease, however, because of its efficacy and safety profile, including the lack of immunosuppression. We believe dupixent can have an important benefit earlier in these diseases, where biologics have thus not.

George D. Yancopoulos: However, because of its efficacy and safety profile, including the lack of immunosuppression, we believe Dupixan can have an important benefit earlier in these diseases, where biologics have thus far not been utilized, and we are considering studying Dupixan in patients with these earlier stages of disease. Now we'll turn to our immuno-oncology. First, I want to remind you how challenging it is to create best-in-class biologics, and how often failure is still the rule. The foundation for Regeneron's success over the years has been our technology platform, that we have repeatedly used to produce first-in-class or best-in-class biologic, Whether ILEA for eye diseases, PRALIEN for heart disease, DUPICTION for allergic type 2 diseases, or the recent stunning success with our Ebola antibody cocktail. I need not remind you that in all of these settings, there were very few, if any, successful competitors.

Thus far not been utilized and we are considering studying dupixent in patients with these earlier stages of disease.

Now I will turn to our immuno oncology efforts first I want to remind you how challenging it is to create best in class Biologicals and how often failure is still the rule the foundation for Regeneron success over the years has been our technology platforms.

Yeah, we have repeatedly used to produce first in class or best in class Biologicals, whether I leave for eye diseases, probably in for heart disease Dupixent for allergic type two diseases, where the recent stunning success with our a bowl antibody cocktail.

I need not remind you that in all of these settings. There were very few if any successful competitors instead numerous competitors, including some of the biggest biopharma companies in the world sales.

George D. Yancopoulos: Instead, numerous competitors, including some of the biggest biopharma companies in the world, failed. And now we feel that we can create similar advantage by bringing our next generation technologies to immuno-oncology. Arguably, the biggest advance in this field has been PD-1 blockade. But even here, most efforts to develop PD-1 or PD-L1 blockers have not produced best-in-class results, with Merck's Pembrolizumab being a clear outlier. Moreover, even with this best-in-class PD-1 blocker, most cancers do not respond. And for those that do, only a fraction of the patients have satisfactory responses. We are very far from curing cancer in general. This is why we feel that, with our technological advantages, we can make a major contribution.

And now we feel that we can create seymour advantage by bringing our next generation technologies to immuno oncology.

Arguably the big is advancing this field has been PD one blockade.

But even here most efforts to develop PD, one or PDL, one blockers have not produced best in class results with Merck's capitalism, Matt being clear outlier.

Moreover, even with this best in class PD, one blocker, most cancers do not respond and for those that do only a fraction of the patients have satisfactory responses.

We are very far from curing cancer in general.

This is why we feel that with our technological advances advantages, we can make a major contribution.

George D. Yancopoulos: First of all, we believe we can use our Velocimune Humab mouse, the widely acknowledged gold standard for making fully human antibodies, to make best-in-class checkpoint blockers, such as for PD-1. Moreover, we have developed a next generation of Velocimune mouse that, when combined with our recently described VelociBi platform, can produce the most natural antibody-like bi-specifics more rapidly and routinely than other approaches. Our bi-specifics naturally have long half-lives without complex engineering, without mutations and can be delivered like normal antibodies without requiring constant infusion.

First of all we believe we can use our velocimmune Humana mouse widely acknowledged gold standard for making fully human antibodies to me best in class checkpoint blockers, such as for PD one.

Moreover, we have developed a next generation Velocimmune mouse that when combined with our recently described velocity by platform can produce the most natural antibody like bi specifics more rapidly and routinely then other approaches.

Our bi specifics naturally have long half life without complex engineering.

[noise] without mutations and can be delivered like normally antibodies without requiring constant fusion. This has allowed us to emerge as a leader in the so called Cdthree by specific space in which a bi specific can be used to link the killer T cell to tumor targets. Moreover, we have the invented what we believe is the next important clay.

George D. Yancopoulos: This has allowed us to emerge as a leader in the so-called CD3 bispecific space in which a bispecific can be used to link a killer T cell to a tumor target. Moreover, we have invented what we believe is the next important class of bispecifics, which we call co-stimulatory or co-stim-bispecific, that can synergize with both our PD-1 antibody and with our CD3 bispecific. We believe that progress in cancer will require amplifying and deepening the responses in settings where PD-1 antibody is already active, as well as activating responses where PD-1 has little or no activity, such as in prostate, pancreatic, colorectal, and other settings. We hope that our bi-specifics will demonstrate such synergies together, as well as with our PD-1 antibodies. We have already begun establishing the individual efficacy profiles of our three classes of immuno-oncology agents.

Yes, the bi specifics, which we call costimulatory or coast in bi specifics that can synergize with both our PD, one antibody and with our Cdthree bi specifics, we believe that progress in cancer will require amplifying and deepening the responses in setting where PD. One antibody is already active as well as activating response.

This is where PD, one has little or no activity, such and such as in prostate pancreatic colorectal another setting we hope that our bison VIX will demonstrate such synergies together as well as with our PD one antibody.

We have already begun establishing the individual efficacy profiles of our three classes of immuno oncology agents.

George D. Yancopoulos: In terms of our PD-1 antibody, Liptio, we defied expectations by identifying an important new cancer setting where PD-1 therapy had not previously been characterized, despite the broad efforts in the field. We obtained rapid approval in cutaneous squamous cell carcinoma, or CSCC, based on some of the best response rates yet described for a PD-1 blocker in a solid tumor setting, approaching 50% in late-stage metastatic and locally advanced CSCC. While others have subsequently explored their PD-1 therapies in this setting, Liptar remains the first and only approved therapeutic in advanced CSCC, and based on cross-study comparisons, has an outstanding efficacy profile. We believe non-melanoma skin cancers represent an important, previously untapped opportunity, and we are working to expand our leading position in this space. A registrational study in adjuvant CSCC is already ongoing.

In terms of our PD, one antibody lip tile, we defied expectations by identifying important new cancer, setting where PD one therapy had not previously been characterized despite the broad efforts in the field, we obtain rapid approval in cutaneous squamous cell carcinoma work see FCC based on some of the best research.

Bonds rates, yet described for PD, one block rental solid tumor setting approaching 50% in late stage metastatic and locally advanced the FCC.

While others have subsequently explored beer PD one therapy is in this setting the tie remains the first and only approved therapeutic in advance the FCC and based on cross study comparisons has an outstanding efficacy profile.

We believe nonmelanoma skin cancers represent an important previously untapped opportunity and we're working to expand our leading position in this space a registrational study and as you didn't see FCC is already ongoing in addition, Dr. Neal gross MD Anderson recently presented exciting early results with lift.

George D. Yancopoulos: In addition, Dr. Neil Gross of MD Anderson recently presented exciting early results with Liptio in neoadjuvant CSCC, with 70% response rates and 55% complete pathological responses. And we are now planning a larger neoadjuvant study. We're also looking forward to a potentially pivotal date in the first half of 2020 from another important common skin cancer where PD-1 therapies have not been extensively characterized. That is, basal cell carcinoma.

Tile in Neoadjuvant see FCC.

With 70% response rates in 55% complete pathlogic responses and we're now planning a larger Neoadjuvant study.

So looking forward to potentially pivotal data in the first half a 2020 for another it from another important common skin cancer, where PD one therapies have not been extensively characterize that is basal cell carcinoma. Finally for skin cancers. We're also exploring live tile in melanoma in various combination studies intended to show increased benefit.

George D. Yancopoulos: Finally, for skin cancers, we are also exploring Liptio and Melanoma in various combination studies intended to show increased benefit over PD-1 therapy alone. Beyond skin cancers, we are working to establish Liptio as a therapeutic in non-small cell lung cancer, the largest current PD-1 opportunity. Along these lines, earlier today we provided an update on our lung study with Liptio monotherapy in high PD-L1 expressions. This 700 patient study is now over 90% enrolled, based on an early interim analysis of overall survival in about one-third of anticipated events. The IDMC recommended continuing the trial as planned.

Over PD one therapy alone.

Beyond skin cancers, we are working to establish reptile was the therapeutic in non small cell lung cancer largest current PD one opportunity along these lines earlier today, we provided an update on our lung study with live tile monotherapy in high PDL. One expresses this 700 patient study is now over 90%.

Enrolled.

Based on an early interim analysis of overall survival in about one third of anticipated Vince.

The Idmc recommended continuing the trials plant.

George D. Yancopoulos: We also announce that in the first 361 randomized patients, the confirmed objective response rate, as determined by the investigators, is currently 42% for Liptio versus 22% for chemotherapy. These objective response findings, while not sufficient for regulatory approval in this setting, support our hope that Lipton may prove an important therapeutic in non-small cell lung cancer. The next event-driven interim analysis for overall survival is anticipated in 2020. In terms of our other important Phase III study in lung cancer, which is comparing leptile with chemotherapy versus chemotherapy alone, we expect full enrollment, in the second half of next year. As with our PD-1 antibody, we are also establishing the efficacy and safety profile as by specifics, first as single agents. Starting with our CD3 class of bispecifics, we have already reported that Regeneron 1979, our CD20 by CD3 bispecific demonstrated impressive single-agent response rates in late-stage lymphoma patients, including in those that have failed CAR T-Therapy. At the European Hematology Association meeting, based on a small number of patients, we reported 93% objective response rates with 71%.., complete responses in late-stage follicular lymphoma and reported 57% response rates in late-stage that fused large B-cell lymphoma patients, including two responses in four patients that had failed CAR-T therapy.

We also announced it in the first 361 randomized patients to confirmed objective response rate as determined by the investigators is currently 42% for live tires versus 22% for chemotherapy.

These objective response findings well not sufficient for regulatory approval in this setting support our hope that live Tom a proven important therapeutic in non small cell lung cancer.

The next event driven interim analysis for overall survival is anticipated in 2020 in terms of other important phase in terms of our other important phase three study in lung cancer, which is comparing the tie with chemotherapy versus chemotherapy alone we expect full enrollment.

In the second half of next year.

As with our PD one antibody, we're also establishing the efficacy and safety profile as by Sussex first as single agents.

Starting with our Cdthree classify specific we've already important that regeneron 1979, or cdtwenty by Cdthree bikes Hasidic demonstrated impressive single agent response rates in late stage lymphoma patients, including those that have failed car T therapy.

At the European Hematology Association meeting based on a small number of patients we reported 93% objective response rates with 71%.

Complete responses in late stage split lymphoma, and reported 57% response rates in late stage.

Diffuse large b cell lymphoma patients, including two responses in for patients that had failed car T therapy.

George D. Yancopoulos: While the ASH abstracts that we'll be posting tomorrow will only include older data, our presentation at ASH will include additional patients and longer duration of follow-up with about 20 patients at effective dose levels for each of follicular lymphoma and DLBCL. We have already initiated a potentially pivotal Phase 2 study which intends to enroll independent arms with different subtypes of non-Hodgkin lymphoma. In terms of our BCMA by CD3 bi-specific, based on early single-agent proof-of-concept data that we will present at ASH, we are encouraged about the potential of this treatment for multiple myeloma. Remind you that the ASH abstract, posting tomorrow, will also reflect older data, including only our first dosing level with the BCMA bi-specific. We look forward to updating.

Well the ash abstracts that will be posting tomorrow will only include all the data our presentation at Ash will include additional patients and long duration to follow up with about 20 patients had effective dose levels for each of Follicular lymphoma and deal Bcl, we have already initiated a potentially pivotal phase two study which intends to.

Pendant arms with different sub types of non Hodgkin lymphoma.

In terms of RBC M.A. by Cdthree by specific based on early single agent proof of concept data that we will present at ash. We are encouraged about the potential of this treatment for multiple myeloma remind you that the abstracts the ash abstract posting tomorrow, we'll also reflect all the data including only our.

First dosing level with the BC made by specific we look forward to updating.

These results with promising new data from our second dosing cohort at Ash.

George D. Yancopoulos: These results with promising new data from our second dosing cohort at AFT. Finally, our third CD3 bi-specific, MUX16 bi-CD3, continues in a trial as a single agent, and will shortly start a combination phase with liptyle. In terms of the first example of our entirely novel class of so-called CO-STEM bispecifics, our PCMA bis CD28 bispecific, we have begun dosing patients in recently initiated combinations with Liptile. In this prostate cancer setting, which is normally not responsive to PD-1, we hope that our PCMA bis CD28 bispecific can trigger responses as it has in preclinical studies. In summary, we are very excited that the initial entries for our three different classes of immuno-oncology therapeutics are establishing their individual potentials, and we are entering into the next stage, exploring combinations. In terms of combinations, we are not limiting ourselves to our internal portfolio.

Finally, our 33 by specific much 16 by Cdthree continues in a trial as a single agent and will show up shortly start a combination phase with lip tile.

In terms of the first example of in our entirely novel class of so called coast in bi specifics are PCM made by Cdtwenty cdtwenty by specific we have begun dosing patients in recently initiated combinations with tile in this prostate cancer setting which is normally not responses.

The PD one we hope that our PCM a by CD 20 Bucks is that it can trigger responses as it has in preclinical studies.

In summary, we're very excited that the initial entries for three different classes of immuno oncology therapeutics are establishing their individual potentials and yet we are entering into the next stage exploring combinations in terms of combinations, we're not limiting ourselves to our internal portfolio, our external immuno oncology collaborations for onto.

George D. Yancopoulos: Our external immuno-oncology collaborations fall into two broad categories. Cell Therapy, including CAR-T's and other approaches, and vaccine-like approaches. Once again, these all have the potential of being explored individually, but also in combination with our PD-1 and other checkpoint inhibitors, as well as with our two classes of bispecific. Altogether, we believe we are making significant progress on our strategy to become a leader in the immuno-oncology space. I would like to finish, with brief discussions updating our ophthalmology efforts and also briefly touch on our rare disease portfolio. For ILEA, we are planning registrational clinical programs in wet AMD and DME evaluating a novel and higher dose formulation, of 8 mg in 12-week and 16-week regimen. The Phase II trial in wet AMD is underway.

Approved two broad categories.

Cell therapy, including car Ts and other approaches and vaccine like approaches once again. These all have the potential of being sport individually, but also in combination with our PD, one and other checkpoint inhibitors as well as with our two classes of by specifics.

Altogether, we believe we're making significant progress on our strategy, becoming a leader in immuno oncology space.

I'd like to finish.

With brief discussions updating our ophthalmology efforts and also briefly touch on a rare disease portfolio Fry Leah we're planning registrational clinical programs in wet AMD DMD any valuating, a novel and higher dose formulation.

Of eight milligrams, an eight week in sorry in 12 week in 16 week regimens. The phase two trial in wet AMD is under way beyond daily and we're continuing preclinical development of a new VEGF block.

George D. Yancopoulos: Beyond ILEA, we are continuing preclinical development of a new VEGF block. Gene Therapy, and other novel approaches, including with our El Nilem Collaborative. We have also made substantial progress in our rare disease portfolio. In mid-2020, we are planning a regulatory submission for evanocumab in homozygous familial hypercholesterolemia, based on Phase III data showing nearly 50% LDL reduction in patients already treated with statins and PCSK9. By the end of 2019, we're also expecting a readout of giratosumab for fibrodysplasia ostrogans progressive. And we are becoming increasingly excited about our C-5 program. Let me remind you, we set a very high bar for entry into existing markets with novel agents. In the case of C-5, our goal was to achieve convenient self-administration with a subcutaneous dosage form, as well as more complete blockade of inappropriate complimentary activations.

Gene therapy, and other novel approaches, including with our El Nio them collaborators.

We've also made substantial progress in our rare disease portfolio in mid 2020, we're planning a regulatory submission for ever document in homozygous familial hypercholesterolemia based on phase three data showing nearly 50% LDL reduction in patients already treated with status and pcsknines by the end of 2019, we're also expecting arena.

Your Tulsa map for fiber dysplasia Ossificans progressiva.

And we are becoming increasingly excited about our C program. Let me remind you we set a very high bar for entry into existing markets with novel agents in the cases C. Five our goal was to achieve convenient self administration with a subcutaneous dosage form as well as more complete blockade of inappropriate.

Complement activation.

We are encouraged by our progress towards these goals and plan to present, our first data for our C antibody ppas element in PAREXEL nocturnal hemoglobin urea patients at a future Medical conference. We're also exploring options for combination with some different a novel ESI ornate developed by our a Muslim collaborators.

George D. Yancopoulos: We are encouraged by our progress towards these goals and plan to present our first data for a C5 antibody, pozolimab, in paroxysmal nocturnal hemoglobinuria patients at a future medical conference. We're also exploring options for combination with Simdicerin, a novel sRNA developed by our Allylum Collaborative. In closing, this is a very interesting time to be at Regeneron. Now we'll turn the call over to Marion.

In closing is a very interesting time to be at Regeneron now, we'll turn the call over to Mary.

Thank you George we continue to execute wellness third quarter led by our core idea and just Texan businesses as well as promising tile market introduction.

Marion McCourt: Thank you, George. We continue to execute well in the third quarter, led by our core ALEA and Dupixent businesses, as well as promising Libtayo market introduction. Starting with ILEA, global net product sales grew 14% year-over-year to $1.9 billion. In the U.S., net product sales grew to $1.2 billion. This represents 16% year-over-year growth.

Starting with idea electronic sales grew 14% year over year to 1.9 billion.

Net product sales grew to 1.2 billion. This represents 16% year over year gross a combination of overall market growth and share gains drove strong third quarter performance Avandia.

Marion McCourt: A combination of overall market growth and share gains drove strong third-quarter performance of ILEA. Growth in the overall market continues at a mid-to-high single-digit range, underpinned by the aging population and increase in diabetes prevalence. ILEA's share of the branded market also increased to 73% of net product sales for the quarter, driven by physician preference for ILEA. We continue to invest in ILEA to advance our market-leading position across all indications. Let me take a moment to remind you of select strategic commercial initiatives to enhance our market-leading position in WET-AMD and further penetrate diabetic eye disease, where there is significant growth opportunity. In WET-AMD, we are growing our position by focusing on ILEA's rapid and sustained outcomes to improve and protect vision.

Growth in the overall market continues at a mid to high single digit range underpinned by the aging population and increase in diabetes prevalence.

He is share of the branded market also increased to 73% of net product sales for the quarter driven by physician preference friendlier, we continue to invest an idea to advance our market leading position across all indications, let me take a moment to remind you of select strategic commercial initiatives to enhance our market leading position.

Andy and further penetrate diabetic eye disease, where there were significant growth opportunity and what Andy we're growing our position by focusing on only is rapid and sustained outcomes gems and protect vision wet AMD. Currently represents just under 60% Avandia business and idea continues to grow.

Marion McCourt: WET-AMD currently represents just under 60% of ILEA business, and ILEA continues to grow in this patient group. In diabetic eye disease, our expanded field team is making tremendous strides. Our strategy is to increase diagnosis and treatment rates by educating healthcare professionals, consumer awareness, and applying technologies to support diagnosis. With approximately 15% of the market receiving an anti-VEGF treatment, there's an important opportunity to help patients preserve and improve their vision. Our growth in DME indicates our strategy is delivering results. Our diabetic retinopathy launch is off to an encouraging start, with ILEA use increasing in both proliferative disease and severe non-proliferative disease. We anticipate ILEA use to increase as retina specialists see the benefits of actively treating these patients. Finally, we plan to launch the ILEA pre-filled syringe before the end of this year.

In this patient grip.

Diabetic eye disease, our expanded field team is making tremendous strides our strategies to increase diagnosis and treatment rates by educating healthcare professionals consumer awareness and applying technologies to support diagnosis with approximately 15% of the market receiving an anti that just treatment. There is an important opportunity.

To help patients preserved and improve the vision.

Growth in DMD indicates our strategy is delivering results.

Diabetic retinopathy launches often encouraging start with.

Increasing in both I wondered if disease engineered non proliferative disease, we anticipate on Leah used to increase as retina specialists the benefits of actively treating these patients.

Finally, we plan to launch the alia pre filled syringe before the end of this year taken together alia has compelling efficacy and safety reston indications dosing flexibility and clinical and real world experience.

Marion McCourt: Taken together, ILEA has compelling efficacy and safety, breath vindications, dosing flexibility, and clinical and real-world experience. Turning to oncology, we're commercializing Liptio with Sanofi. Global nut sales of Liptio were $52 million, including $4 million from our recent ex-US market launches that began this quarter.

Turning to oncology, where commercializing the tie with Sanofi well the net sales were.

Were 52 million, including 4 million from our recent ex us market launches I began this quarter in the U.S.. We continue to establish the time as a standard of care across all lines of therapy for advanced cutaneous squamous cell carcinoma, Rcs cc, let tie this now the number one systemic see FCC treatment.

Marion McCourt: In the US, we continue to establish Liptio as the standard of care across all lines of therapy for advanced cutaneous squamous cell carcinoma, or CSCC. Liptio is now the number one systemic CSCC treatment in terms of total patients. It is outperforming chemotherapy and has made rapid share gains within the anti-PD1 class, where Liptio has 80% share in new patients. We expect growth to continue based on demographics, enhancements in patient identification, and referrals. In addition, recent updates to the National Comprehensive Cancer Network, or NCCN guidelines, list Liptio as the preferred single-agent systemic option. Liptio is the only CSCC anti-PD1 treatment with a 2A recommendation. Ex-U.S. launches and CSCC are currently underway in multiple markets, including Germany, the U.K. and Brazil. While early, we are seeing encouraging progress on access and reimbursement, as well as prescribing trends and physician interest. Moving to Praluent, in the second quarter, global net sales were $70 million. We are working diligently with our collaborator Sanofi to address brand profitability. Turning to Kevzara, in the third quarter, global net sales were $55 million.

In terms of total patients.

For for mentioned with CRB and his need rabbit share gains within the anti PD one class when the tile has 80% share and new patient.

We expect runs to continue based on demographics enhancements in patient identification and referrals. In addition, recent updates to the national comprehensive cancer network NCCN guidelines lift slipped Kyle as the preferred single agent systemic option Mattel is the only see SCC anti PD one.

Treatment with H a recommendation.

She was lunches and Cc are currently underway in multiple markets, including Germany, the UK in Brazil.

Currently we are seeing encouraging progress on access and reimbursement as well this prescribing trends and physician interest moving polyone and the second quarter Global net sales were 70 million.

Working diligently with our collaborator Sanofi to address brand profitability, turning chicken sarra in the third quarter global net sales for 55 million.

Marion McCourt: In the U.S., we see steady growth as Kevzara continues to make headway in the IL-6 subcutaneous class with 48% share of new-to-brand prescriptions and 30% share of total prescriptions. Now for Dupixent, which is transforming the lives of patients suffering from many type 2 inflammatory diseases. Global net product sales in the third quarter were $633 million.

Asked me steady growth as concerned continues to make headway in the iOS, except cutaneous class with 48% share of new to brand prescriptions and 30% share of total prescriptions now for detection, which is transforming the lives of patients suffering from many tied to inflammatory diseases.

Mobile net product sales in the third quarter were 633 million in the U.S. net product sales reached five ALLETE million, representing 131% year over year gross.

Marion McCourt: In the US, net product sales reached $508 million, representing 131% year-over-year growth. Total prescriptions in the US grew approximately 21% compared to the second quarter. We continue to see strong prescribing trends across all approved indications. Weekly new-to-brand prescriptions for the third quarter averaged approximately 1,350 patients per week, up from 1,200 in the prior quarter.

Total prescriptions in the U.S. grew approximately 21% compared to the second quarter. We continue to see strong prescribing trends across all approved indications weekly new to brand prescriptions for the third quarter averaged approximately 1350 patients per week up from 1200 in the prior.

Quarter.

In a topic dermatologist picks and continues to outpace other biologic launches in dermatology for adults. We are pleased to see an increased number of patients with moderate disease being prescribed dupixent earlier in the treatment paradigm and ahead of immuno suppressive therapy, we see ample opportunity in atopic dermatitis has approximately 20% of adult.

Marion McCourt: In atopic dermatitis, Dupixent continues to outpace other biologic launches in dermatology. For adults, we are pleased to see an increased number of patients with moderate disease being prescribed Dupixent earlier in the treatment paradigm and ahead of immunosuppressant therapy. We see ample opportunity in atopic dermatitis as approximately 20% of adult patients with the greatest need have used Dupixent. Additionally, our ongoing launch in adolescents continues to contribute meaningfully to the brand.

Patients with a greatest need have used to pick since additionally, ongoing launch in adolescence continues to contribute meaningfully to the brand as a reminder to picks in is the first my luck.

Marion McCourt: As a reminder, Dupixent is the first biologic approved for atopic dermatitis in adolescents, many of whom remained uncontrolled using topical therapies. This launch has been aided by physician experience with the efficacy and safety in adults. An asthma, Dupixent is positioned to capitalize on the significant market opportunity. Approximately 75% of Dupixent asthma patients are new to biologics, demonstrating our ability to grow this market. Prescribing trends are accelerating among both allergists and pulmonologists. With only 15% of eligible patients being treated with a biologic, there's significant opportunity to educate patients about Dupixent. As a result, last month we initiated our Asthma Direct-to-Consumer TV campaign.

Atopic dermatitis and adolescence, many of whom remained uncontrolled isn't topical therapies.

Launch has been aided by physician experience with the efficacy and safety in adults.

In asthma. It takes in his position to capitalize on the significant market opportunity approximately 75%. It just takes in asthma patients are new to biologics demonstrating our ability to grow this market prescribing trends are accelerating among both allergies and pulmonologists with only 15% availability.

Patients being treated with a biologic there's significant opportunity to educate patients about exit as a result last month, we initiated our asthma direct to consumer TV campaign.

Finally, our lunch in chronic rhinosinusitis with nasal polyps is going extremely well encouragingly patients are being initiated onto picks it regardless of prior surgery.

Marion McCourt: Finally, our launch in chronic rhinosinusitis with nasal polyps is going extremely well. Encouragingly, patients are being initiated on Dupixent regardless of prior surgery. As a reminder, in the U.S., up to 90,000 adults with this disease are considered uncontrolled despite prior surgery or systemic corticosteroid use. About 55,000 patients have had prior surgery. While early in the launch, we believe this will be a meaningful growth opportunity for Dupixent. We have an unprecedented opportunity with Dupixent in type 2 inflammatory diseases. The number of physicians prescribing is growing, and with more than 100,000 patients globally treated with Dupixent, the outlook remains exceedingly positive. In closing, the commercial organization delivered a solid performance in the third quarter. We have the right strategy, and we are executing to deliver short and long-term growth. Now, I'll turn the call over to Bob.

Andrew in the U.S. 90000 adults with this disease are considered and control despite prior surgery or systemic corticosteroid use about 55000 patients have had prior surgery well early in the launch we believe this will be a meaningful growth opportunity for depicts since we have an unprecedented Africa.

Except in type two inflammatory diseases.

Physicians prescribing is growing.

More than 100000 patients globally treating with Dupixent.

Remained exceedingly positive in closing the commercial organization delivered solid performance in the third quarter, we have the right strategy and we are executing to deliver short and long term growth now I'll turn the call over to Bob Thanks Marion.

Robert E. Landry: Thanks, Marion. For the third quarter 2019, Regeneron delivered double-digit growth on the top and bottom lines driven by strong performance from both ILEA and Dupixent and increased profitability within the Sanofi Alliance. Total revenues for Regeneron grew 23% year-over-year to $2.05 billion, driven by continued growth of our core brands, Ilea and Pixen. Non-GAAP diluted net income per share grew 14% year-over-year to $6.67 on non-GAAP net income of $762 million. Since Marion discussed our ILEA results in the U.S., I will start with our Bayer and Sanofi collaboration.

For the third quarter 2019, Regeneron delivered double digit growth on the top and bottom lines driven by strong performance from both I lead out into picks and an increased profitability within the Sanofi Alliance.

Total revenues for Regeneron grew 23% year over year to 2.5 billion driven by continued growth of our core brands highly and picks and non-GAAP diluted net income per share grew 14% year over year $6.67 on non-GAAP net income of 762 million.

Since marine discussed our idly on results in the U.S. I will start with our Bayer and Sanofi collaborations.

Starting with the Bayer collaboration X U.S. slightly a net product sales, which are reported to us by there were 730 million, representing a 12% reported and a 14% constant currency basis increase year over year total Bayer collaboration revenue for the third quarter 2019 grew 15% Euro.

Robert E. Landry: Starting with the Bayer collaboration, ex-U.S. ILEA net product sales, which are reported to us by Bayer, were $730 million, representing a 12% reported and a 14% constant currency basis increase year over year. Total Bayer collaboration revenue for the third quarter of 2019 grew 15% year over year to $303 million, of which $275 million was derived from our share of net profits from ILEA sales outside the U.S. Total Sanofi collaboration revenue was $404 million, up 58% year-over-year, as commercial profitability improved sharply. For the third quarter of 2019, Regeneron recognized a profit of $94 million in connection with the commercialization of non-IO antibodies, compared to a loss of $39 million in the prior year period, and a profit of $39 million in the second quarter of this year. As we head into the end of the year and into 2020, we expect continued improved profitability driven by strong, depicting net sales growth, continued cost containment on Pralulin and Kevzar, and improvements in our operating leverage. Turning now to expenses.

Year to 303 million of which 275 million was derived from our share net profits from wailea sales outside the U.S.

Total Sanofi collaboration revenue was 404 million up 58% year over year as commercial profitability improved sharply for the third quarter 2019, Regeneron recognize the profit of 94 million in connection with the commercialization of non ideal antibodies compared to a loss of 39 million.

In the prior year period in a profit a 39 million in the second quarter of this year.

Both the year over year in sequential increase was driven by higher to pick some profits as we head into the ended the year and into 2020. We expect continued improved profitability driven by strong Dupixent net sales growth continued cost containment on probably lending kevzara and improvements in our operating leverage turning.

Now to expenses non-GAAP R&D expenses were 603 million for the third quarter 2019, compared to 497 million for the third quarter 2018, an increase of 22%, we're continuing to invest in our pipeline in research capabilities, which is critical to the long term success of the business.

Our oncology pipeline continues to forge ahead, and we are advancing several wholly owned molecules into clinical development with more to come. In addition, we're funding external partnership obligations as jointly developed molecules are rapidly advancing.

Robert E. Landry: Non-GAP R&D expenses were $603 million for the third quarter of 2019, compared to $497 million for the third quarter of 2018, an increase of 22%. We are continuing to invest in our pipeline in research capabilities, which is critical to the long-term success of the... Our oncology pipeline continues to forge ahead, and we are advancing several wholly owned molecules into clinical development with more to come. In addition, we are funding external partnership obligations as jointly developed molecules are rapidly advancing.

While we are not yet giving guidance for 2020, we anticipate non-GAAP R&D expenses to increase.

Our non-GAAP unreimbursed R&D expense, which is calculated as the total non-GAAP R&D expense less R&D reimbursements from our collaborators was 441 million for third quarter 2019, compared to 311 million for the third quarter 2018.

Based on the current forecast for the remainder of the year, we're tightening our previous full year 2019 guidance for non-GAAP Unreimbursed R&D to one point 60 to 1.71 billion next non-GAAP SGN expense was 379 million for the third quarter 2019, a 16% year over increase.

Robert E. Landry: While we are not yet giving guidance for 2020, we anticipate non-GAAP R&D expenses to increase. Our non-GAAP unreimbursed R&D expense, which is calculated as the total non-GAAP R&D expense less R&D reimbursements from our collaborators, was $441 million for third quarter 2019 compared to $311 million for the third quarter 2018. Based on the current forecast for the remainder of the year, we are tightening our previous full year 2019 guidance for non-GAAP unreimbursed R&D to $1.68 to $1.71 billion. Next, non-GAAP SG&E expense was $379 million for the third quarter of 2019, a 16% year-over-increase. Driven by higher headcount and related costs and launch-related expenses for U.S. Liptio and for new indications for ILEA and DEPIX. We are tightening our previous full-year 2019 guidance for non-GAP-S DNA to 1.55 to 1.58 billion.

[noise] driven by higher head count in related costs and launch related expenses for us look tile in for new indications for idea into picks and we're tightening our previous full year 2019 guidance for non-GAAP SGN, a to 1.55 to 1.58 billion.

Sanofi reimbursement of Regeneron commercialization related expenses line items found within Sanofi collaboration revenue was 115 billion for the third quarter 2019 based on spending trends and cost containment efforts related to probably Lin Kevzara, we were lowering and tightening or previous full year 2019 guidance for Sanofi reimbursement.

Regeneron commercialization related expenses for 9500 10 million.

In the third quarter 2019, combined non-GAAP cost of goods sold in cost of collaboration and contract manufacturing were 210 million compared to 102 million in the third quarter 2018, the year over year increase in cost of goods sold was primarily due to the company's obligation to pay Sanofi its share of little us gross profits.

Robert E. Landry: Sanofi reimbursement of Regeneron commercialization-related expenses, line items found within Sanofi collaboration revenue, was $115 million for the third quarter of 2019. Based on spending trends and cost containment efforts related to Praline and Kevzar, we are lowering and tightening our previous full year 2019 guidance for Sanofi reimbursement of Regeneron commercialization-related expenses to $490 to $510 million. In the third quarter of 2019, combined non-GAAP cost of goods sold and cost of collaboration and contract manufacturing were $210 million, compared to $102 million in the third quarter of 2018. The year-over-year increase in cost of goods sold was primarily due to the company's obligation to pay Sanofi its share of Liptio U.S. gross profits, lower fixed cost absorption, and higher inventory reserves and write-offs. The year-over-year increase in cost of collaboration and contract manufacturing was primarily due to recognition of manufacturing costs associated with higher sales of Dupixent.

Lower fixed cost absorption and higher inventory reserves and write off the year over year increase in cost of collaboration and contract manufacturing was primarily due to recognition of manufacturing costs associated with higher sales of Dupixent.

Turning now to taxes.

The third quarter 2019, our GAAP effective tax rate was 12.9% compared to 6.5% for the third quarter of 2018 based on our actual results to date in forecast for the remainder of the year, we're raising our full year 2019, GAAP effective tax rate guidance to 12% to 14%.

We continue to expect our full year 2019, non-GAAP tax rate to be higher than our full year 2019, GAAP effective tax rate.

Turning next to our cash flow and balance sheet year to date, we've generated 1.35 billion in free cash flow to defined as net cash provided by operating activities less capital expenditures. We ended the third quarter of 2019 with cash and marketable securities of nearly 6 billion.

Earlier today, we announced a billion dollar share repurchase program without announcement, let me take a moment to discuss our capital allocation priorities.

Robert E. Landry: Turning now to tax. For the third quarter of 2019, our GAAP effective tax rate was 12.9% compared to 6.5% for the third quarter of 2018. Based on our actual results to date, in forecast for the remainder of the year, we are raising our full year 2019 GAAP effective tax rate guidance to 12 to 14. We continue to expect our full year 2019 non-GAAP tax rate to be higher than our full year 2019 GAAP effect.

In terms of capital deployment investing in our internal research capabilities and advancing our pipeline remains our top priority as evidenced by our productivity in the high returns we generated historically on our R&D. These investments are critical for our business and shareholders second we seek to complement our internal efforts with external.

Strategic partnerships and collaborations over the last 18 months, we funded in excess of 900 million an equity in upfront payments comprising more than five new strategic opportunities in the areas of our in a high therapeutics Oncolytic viruses in car T therapies. Following these R&D investments we assess it.

Robert E. Landry: We're turning next to our cash flow and balance sheet. Year-to-date, we've generated $1.35 billion in free cash flow defined as net cash provided by operating activities less capital expenditures. We ended the third quarter of 2019 with cash and marketable securities of nearly $6 billion. Earlier today, we announced the billion-dollar share repurchase program. With that announcement, let me take a moment to discuss our capital allocation priority. In terms of capital and deployment, investing in our internal research capabilities and advancing our pipeline remains our top priority. As evident by our productivity and the high returns we've generated historically on our R&D, these investments are critical for our business and shareholders. Second, we seek to complement our internal efforts with external strategic partnerships and collaborations.

Additional strategic uses of our cash our overall business is growing with increasingly diversified revenue and cash flow streams, coupled with the strength of our balance sheet in our confidence in the long term outlook for the business, we view share buybacks at current trading levels as an efficient use of capital in conclusion, we're very pleased with our financial risk.

Some performance this quarter with continued execution on our R&D in commercial strategies, we are positioned for long term growth with that I'd like to turn the call back to Justin.

Hey, Bob Cheryl that concludes our prepared remarks, we'd now like to open the call for QNX.

Thank you will now begin the question and answers fashion.

I would like to ask a question. Please press Star then the number one on your Touchtone phone.

Robert E. Landry: Over the last 18 months, we've funded in excess of $900 million in equity and upfront payments, comprising more than five new strategic opportunities in the areas of RNAi therapeutics, oncolytic viruses, and CAR-T therapy. Following these R&D investments, we assess additional strategic uses of our cash. Our overall business is growing with increasingly diversified revenue and cash flow streams, coupled with the strength of our balance sheet and our confidence in the long-term outlook for the business. We view share buybacks at current trading levels as an efficient use of capital. In conclusion, we are very pleased with our financial results and performance this quarter. With continued execution on R&D and commercial strategies, we are positioned for long-term growth.

Are you seeing speakerphone, please pick up your handset before pressing any numbers once again, if he would like to ask your question. Please press Star then the number one on your Touchtone phone [noise].

Our first question comes from Chris Raymond from Piper Jaffray. Your line is now open.

Hey, Thanks for taking the question so just maybe.

Maybe a question on the idea franchise and maybe just from a from a high level perspective, you guys had been frame in your next generation efforts in a pretty similar way I think for a few quarters now.

And so the high dose formulations in the clinic, now, which I think as new.

But your your your discussion on the other mechanisms still seem to be framed in the same way that you had the last few quarters and so I guess the question is I'm wondering if you can talk about where when we might see something from these novel mechanisms in the clinic and maybe talk about these efforts in the context of VIP runway you have with.

Justin Holko: With that, I'd like to turn the call back to Justice. Thank you, Bob. Cheryl, that concludes our prepared remarks. We'd now like to open the call for Q&A.

Operator: Thank you. We will now begin the question-and-answer session. If you would like to ask a question, please press star, then the number 1 on your touch-tone phone. If you are using a speakerphone, please take up your handset before pressing any numbers. Once again, if you would like to ask a question, please press star, then the number 1 on your touch-tone phone. Our first question comes from Chris Raymond from Piper Jaffray, your line is now open. Hey, thanks for taking the question. So just, um, maybe a question on the ILEA franchise, and maybe just from from a high

And then maybe a second part of the question can you describe more tactically any any continued impact from the supply hiccups of component of Aston.

In the quarter. Thank you.

So marrying it will take any comments about the vast and supply issues.

Let me just say that I'm not going to comment on it on our patent situation here I can say when think the shoes that are.

Our data exclusivity runs as some ways into the 2024, so we have a reasonable runway there.

Leonard S. Schleifer: So, from a clinical perspective, you guys have been framing your next generation efforts in a pretty similar way, I think, for a few quarters now. And so the high-dose formulations in the clinic now, which I think is new, but your discussion on the other mechanisms still seem to be framed in the same way that you had the last few quarters. The question is, I'm wondering if you can talk about when we might see something from these novel mechanisms in the clinic, and maybe talk about these efforts in the context of the IP runway you have with ILEA. And then maybe a second part of the question, can you describe more tactically any continued impact from the supply hiccups of compounds of Aston? Order. Thank you.

In terms of timing, obviously working hard we 10, Chris not to predict when things will finally go into the clinic.

But as soon as they do we will let you know audit work on it and the one that we mentioned the high dose new formulation is now underway in our phase two program a maryann you want to comment on the invest in situation Shirlon and just to comment on in third quarter. There were some temporary.

Right spot shortages of Avastin in select geographies.

They need given some modest benefits while the you mentioned the same in the second quarter and the one thing I can add is that we are hearing that patients that are started on a vast excuse me started on alia because of the shortages continue on I leave therapy. So we'll continue to monitor the such.

Leonard S. Schleifer: So Marion will take any comments about the Vaston supply issues. Let me just say that I'm not going to comment on our patent situation here. I can say one thing for sure is that our date exclusivity runs some ways into 2024, so we have a reasonable runway there. In terms of timing, obviously we're working hard. We tend, Chris, not to predict when things will finally go into the clinic, but as soon as they do, we will let you know, or we're hard at work at it. And the one that we mentioned, the high-dose new formulation, is now underway in our phase two program. Marion, you want to comment on the Vaston situation?

Relation which is episodic.

Worse in many instances are related to ongoing issues with the compounding in quality concerns.

Thank you.

Next question. Please Cheryl our next question comes from Ronny Gal from Bernstein. Your line is now open.

Hi, Thank you for taking my question Congrats on that you actually really nice quarter.

If you don't mind first on the CD three Cdtwenty George It looks like you might have actually got here with Roche can you comment a little bit by Youre.

Marion McCourt: And just to comment, in the third quarter, there were some temporary spot shortages of Avastin in select geographies, so they may have given some modest benefit to ILEA. We mentioned the same in the second quarter, and the one thing I can add is that we are hearing that patients that are started on ILEA because of these shortages do continue on ILEA therapy. So we'll continue to monitor the situation, which is episodic, and of course in many instances related to ongoing issues with compounding and quality concerns.

Kind of how you differentiate your thought wheel program for the most good problem that they both program.

And I am going straight into first line with us or is this still thinking it's been a bit in relapsed or will that setting for the next set of trial and if you can remind us whether the partnership with.

I don't think isn't the rights to enter this program or is it still at your control and given your now and I can excess cash situation you have more choice about what's going to do it.

Leonard S. Schleifer: Thank you.

Operator: Next question, please, Cheryl.

Well now I'll start at the back because it's the easiest he is a wholly owned program that we control and nobody has an option on it number one.

George D. Yancopoulos: Our next question comes from Ronnie Gell from Bernstein. Your line is now open. Thank you for taking my question, and congratulations on a really nice quarter. A couple if you don't mind.

Number two in terms of the comparisons with Roche I mean, obviously these are cross trial comparisons, but we're very encouraged with how our data looks and how we both have Oh, we have a chance to have best in class potential.

George D. Yancopoulos: First on the CD3, CD20, George, it looks like you might have actually caught here with Roche. Can you comment a little bit about how you differentiate your program from the Mofflin program, the legal program? And are you going straight into first line with us, or are you still thinking it's going to be in a relapse setting for the next set of trials? And if you can remind us whether the partnership with Sanofi gives them the right to enter this program, or is it still at your control and given you now an excess cash situation, you have more choice about what you're going to do with this?

One of the most important things we believe about not only just program, but our immuno oncology franchise in general is that we have we believe a unparalled opportunity to generate synergistic therapeutics that can work very powerfully together. So we are certainly.

Going to be exploring our cdtwenty by Cdthree in combination.

With our PD, one antibody lipton, which were very.

Very interested in but also we have an assortment of additional bi specifics in the settings, where one might need.

George D. Yancopoulos: Well, May, I'll start at the back because it's the easiest. This is a wholly owned program that we control, and nobody has an option on it, number one. Number two, in terms of the comparisons with Roche, I mean, obviously, these are cross-trial comparisons, but we're very encouraged with how our data looks and how we both have a chance to have best-in-class potential. One of the most important things we believe about not only this program but our immuno-oncology franchise in general is that we have, we believe, an unparalleled opportunity to generate Synergistic Therapeutics that can work very powerfully together. So we are certainly going to be exploring our CD20 by CD3 in combination with our PD1 antibody, Liptio, which we're very interested in.

Additional efficacy, we believe that we can add to it and we certainly shown that and demonstrated that in preclinical models.

So we think that that's what really differentiates us is that we really have a lot of tools in our tool kits a lot of possibilities for combining a lot of things with synergistic capabilities together.

In addition, the fact that each one of our individually agents, we believe that based on.

The emerging data has a chance to be best in class and we're moving very aggressively into a near term pivotal approvable trials.

And we'll be moving into earlier stages as well.

Certainly.

And just to Echo as George said.

We feel good about opposition, but if we don't take Oh rose slightly their phone rule Roche Genentech, a formidable competitor with lots of experience in the Cdtwentys space, but they may have historical approaches.

George D. Yancopoulos: But also, we have an assortment of additional bi-specifics in the settings where one might need additional efficacy. We believe that we can add to it, and we've certainly shown that and demonstrated that in preclinical models. So, we think that that's what really differentiates us, is that we really have a lot of tools in our toolkits, a lot of possibilities for combining a lot of things with synergistic capabilities together, in addition to the fact that each one of our individual agents, we believe that based on the emerging data, has a chance to be best in class, and we're moving very aggressively into near-term, pivotal, approvable trials, and we'll be moving into earlier stages as well.

It may be might be disruptive will buy new a agents and combinations.

Thanks question. Please.

Our next question comes from Geoff Meacham from Bank of America out your line is now open.

Hey, guys. Thanks for the question.

Just have a couple for for Bob wanted to ask about to commercialization related expenses.

Is this just lower reimbursable expenses to regeneron or is it related to say dupi profitability or is this sort of them should be looked at as the next phase of the JV expense base overall.

And then for George obviously, you've got live Tyo, Chemo combo is going and see Tulay for commerce going but how much of a priority is it to test.

Leonard S. Schleifer: I think, Flynn, just to echo what George said, we feel good about our position, but we don't take Roche lightly. They're a formidable, Roche Genentech are a formidable competitor with lots of experience in the CD20 space, but they may have historical approaches that maybe might be disruptible by new agents and combinations.

More novel mechanisms with with PD, one just given recent data from easy and in Bristol.

Thank you.

Jeff I'll start [noise].

Well certainly you know with the launch of Dupixent in the new indications I mean, we're moving full speed ahead with regards to that and we've been talking about profiling and Kevin is our cost containment for last couple of quarters.

Operator: Next question please.

Robert E. Landry: Our next question comes from Jeff Meacham from Bank of America. Your line is now open.

I would say in the third quarter your meaning you know we meaningfully saw what we were have been working on with our Sanofi counterparts in terms of trying to rein in a little bit with regards to the amount of opex associated with probably letting Cubs arc.

George D. Yancopoulos: Hey guys, thanks for the question. Just have a couple for for Bob wanted to ask about the commercialization related expenses. Was this just lower reimbursable expenses to Regeneron or is it related to say DUPI profitability or is this sort of should be looked at as the next phase of the JV expense base overall? And then for George, obviously, you've got Libtio chemocombos going and CTLA-4 combos going, but how much of a priority is it to test? More novel mechanisms with PD-1, just given recent data from AZ and Bristol. Thank you.

Okay and.

So certainly.

We are.

Following closely the PD one field as you said it is evolving our goal as it's been from the beginning is to have a foundational PD one therapeutic that is at least competitive if not best in class and so we're very excited for example, about some of the data that we reported.

Robert E. Landry: Jeff, I'll start. Well, certainly, you know, with the launch of Depixent and the new indications, I mean, we're moving full speed ahead with regards to that. And, you know, we've been talking about Pralulin and Kevzar cost containment for the last couple of quarters. I would say in the third quarter, you know, we meaningfully saw what we have been working on with our Sanofi counterparts in terms of trying to rein in a little bit with regards to the amount of OPEX associated with Praline and Kevzar.

On today in terms of.

The response rates in our first line monotherapy lung cancer study, but once again. The story is as you said that we think that we have and enormous opportunity of combining with our novel sets of reagents some of which are already in combinations in the clinic not only with the entire.

In a checkpoint inhibitors.

But also with our entire assortment of bi specifics so as I already mentioned, we're exploring combinations with the bi specifics of the CD three class that are in the clinic already but we've already initiated our second class abide by six these co stimulatory by specific which have the opportunity to add.

George D. Yancopoulos: Okay, and, um... So certainly, we're. Following closely the PD-1 field, as you said, it is evolving. Our goal, as it's been from the beginning, is to have a foundational PD-1 therapeutic that is at least competitive, if not best in class. And so we're very excited, for example, about some of the data that we reported on today in terms of the response rates in our first-line monotherapy lung cancer study. But once again, the story is, as you said, that we think that we have an enormous opportunity of combining with our novel sets of reagents, some of which are already in combinations in the clinic, not only with the entire assortment of checkpoint inhibitors, but also with our entire assortment of bispecifics.

Activate PD one responsiveness in tumors that are not normally responsive to PD one.

So not only can enhance responsiveness in tumors that are responding to some degree ready, but they can actually in gallery sponsoring. This note that don't in preclinical models and we hope that that pertains. Obviously in clinic. This creates we think.

A great way of extending the benefit that immuno oncology has already provided by taking a deeper.

In cancers that are responsible also opening up cancers that have respond to date. So I do want it just emphasize again why do we have visibility because we have a unique platform for making these bi specifics as far as I'm aware, we're the only platform that couples a.

George D. Yancopoulos: So as I already mentioned, we're exploring combinations with the bispecifics of the CD-3 class that are in the clinic already. But we've already initiated our second class of bispecifics, these co-stimulatory bispecifics, which have the opportunity to activate PD-1 responsiveness in tumors that are not normally responsive to PD-1. So not only can they enhance responsiveness in tumors that are responding to some degree already, but they can actually endow responsiveness in those that don't in preclinical models. And we hope that that pertains, obviously, in the clinic. This creates, we think, a great way of extending the benefit that immuno-oncology has already provided by taking it deeper in cancers that are already responsive, but also opening up cancers that haven't responded to date. So I do want to just emphasize again, why do we have this ability?

Essentially a nationally derive by specific antibodies using a genetically humanize mouse together with this velocity by platform that we recently announced to rapidly routinely make natural by specific Sip behave just like normally antibody you don't have to given by.

Constant infusion you don't have to introduce Linkers, you don't have to make mutations in there. So they have longer half life because they they look in their manufactured in fact, just like regular antibodies. They behave like them you can give them normally like you give biologics you don't have to go to special extensive links to manufacture them.

This allows us to rapidly routinely make many of these and put them into the clinic very rapidly in these various combinations and target them in exactly the way we want to in some cases initiate or in other cases trigger activate a co response and I think it's the collection of these.

George D. Yancopoulos: Because we have a unique platform for making these bispecifics. Essentially, a naturally derived bi-specific antibodies using a genetically humanized mouse together with this velocity bi-platform that we recently announced to rapidly and routinely make natural bi-specific that behave just like normal antibodies. You don't have to give them by constant infusion, you don't have to introduce linkers, you don't have to make mutations in there so that they have longer half-lives because they look and they're manufactured, in fact, just like regular antibodies. They behave like them, you can give them normally like you give biologics. You don't have to go to special extensive lengths to manufacture them. This allows us to rapidly and routinely make many of these and put them into the clinic very rapidly in these various combinations and target them in exactly the way we want to in some cases initiate or in other cases trigger or activate a co-response. I think it's the collection of these put together that allow for very exciting combinations, as I said.

Put together that allow for very exciting combinations as I said, yes, let me just I think very quickly. Jeff you also alluded to there are other combinations out there whether it be CTL, a four legs three or what have you. We in this field recognize that not only antibodies are created equally as George said.

Got some antibody like Keytruda that worked in first line and others, let's say it PDL, one or others, even at PD. One that may not work is well didnt work and so we have to make sure. We explore some of these other antibodies like three or what have you ourselves to be satisfied that there's not opportunity for combination therapy.

There as well.

Thanks next question. Please if we can limit questions to one we still have several collars that we'd like to squeeze them.

George D. Yancopoulos: Yeah, let me just say something very quickly. Jeff, you also alluded to, there are other combinations out there, whether it be CTLA-4, LAG-3, or what have you. We, in this field, recognize that not all antibodies are created equally, as George said. I mean, you've got some antibody, like Keytruda, that worked in first line, and others, let's say a PD-L1, or others, even a PD-1, that may not work as well, didn't work. And so, we have to make sure we explore some of these other antibodies, LAG-3, or what have you, ourselves, to be satisfied that there's not opportunity for combination therapy there as well. Next question.

Our next question comes from George I'm, sorry, Jeff for guests from as the Leerink. Your line is now open.

Thank you very much because my question quick question you have three products that are looked like you annualize in about $200 million a year in revenue.

The timing probably went up.

Tyler so growing strongly.

Oh.

Can you give us a sense well actually contributing to touch flows that revenue level and secondly, do you envisage any further changes and.

Commercial support structure behind those public such that.

Operator: If we could limit questions to one, we still have several callers that we'd like to squeeze in.

They could enhance the profitability all leased out drag on the profitability of to pick some in the future. Thanks.

Robert E. Landry: Our next question comes from George, I'm sorry, Jeff Porges from SBD Leering. Your line is now open.

Jeff I'll start and you can imagine for competitive reasons, you know, we're not going to get into kind of specific.

Specific products with regards to what they're generating.

Robert E. Landry: Thank you very much for taking my question. A quick question, you have three products that look like they're annualizing at about $200 million a year in revenue, Kisara, Leptio, and Pridulin. And certainly Leptio is still growing strongly. First, Bob, can you give us a sense of whether they're actually contributing to cash flow at that revenue level? And secondly, do you envisage any further changes in the commercial support, the structure behind those products such that they could enhance the profitability or at least not drag on the profitability of the depiction in the future? Thanks.

From a cash flow from a cash flow perspective.

Given kind of high level high level.

Covered color with regards to what the drivers have been obviously depiction on our current.

Profitability for the quarter.

Repeat the second question the second part of it.

Yeah. There are many challenges that you could envisage in terms of structure or the spend.

Yes.

Yeah you.

Sort of a faded out at the and this is land, but I think were you asking can we change the structure on the profitability I think.

Leonard S. Schleifer: Jeff, I'll start. And you can imagine for competitive reasons, you know, we're not going to get into kind of specific, specific products with regards to what they're generating. From a cash flow perspective, you know, we've given kind of high-level, Covered color with regards to you know what the drivers have been obviously depicts in on our current Probability for the quarter. Repeat the second question, the second part of it.

Sanofi and Regeneron a constantly looking at this time, we see the same baby you do.

It's very early Phillip tie out so thats one thing, it's getting a little bit late for Praluent Kevzara and we are focused on a make sure. We do the right thing overall for the <unk>, so that they're not a drain on the overall alliance. So you can be assured of that next question [laughter].

Thanks.

Leonard S. Schleifer: Yeah, are there any changes that you could envisage in terms of the structure or the spend?

Our next question comes from Terence Flynn from Goldman Sachs. Your line is now open.

Leonard S. Schleifer: Yeah, you sort of faded out at the end. This is Len. But I think what you're asking, can we change the structure or the profitability? I think, you know, Sanofi and Regeneron are constantly looking at this. We see the same data you do. It is very early for Libertayo. So that's one thing. It's getting a little bit late for Pryor and Kevzara.

Great. Thanks for taking the question was just wondering for your Bcm may cdthree by specific.

Are you encouraged because you're seeing activity in a second type of cancer here with the platform or encouraged because you have a competitive Africa see profile relative to the car T and AIDC data we've seen from from the competitors and then any commentary you can share I'm at a high level regarding the safety Tolerability profile at this point. Thank you.

Leonard S. Schleifer: And we are focused on making sure we do the right thing overall so that they're not a drain on the overall alliance. You can be assured of that. Next question.

George D. Yancopoulos: Thank you. Our next question comes from Terence Flynn from Goldman Sachs. Your line is now open. Great, thanks for taking the question. I was just wondering for your BCMA CD3 bispecific, are you encouraged because

Yes, I think that.

It's fair to you I think you may two great points I mean, I think one it's very important to see that the platform is consistently producing what looked like very competitive exciting data and so it's encouraging for that reason and secondly.

It's a platform is producing competitive there.

Operator: http://www.ncbi.nlm.nih.gov

Data here in a particular bigger than its exciting for that reason as well. So so I guess the answer is yes, and yes on both of those.

Operator: http://TheBusinessProfessor.com

George D. Yancopoulos: And that's all the commentary you can share at a high level regarding the safety tolerability profile at this point. Thank you.

We shouldn't go any further we'll show you the day that.

Next question please.

Our next question comes from Terence.

George D. Yancopoulos: Yeah, I think that it's fair. I think you made two great points.

I'm sorry, just a question comes from Matthew Harrison from Morgan Stanley . Your line is now open.

George D. Yancopoulos: I mean, I think, one, it's very important to see that the platform is consistently producing what look like very competitive, exciting data. And so it's encouraging for that reason. And secondly, if the platform is producing competitive data in a particular area, then it's exciting for that reason as well. So I guess the answer is yes and yes on both of those.

Great. Good morning, Thanks for taking the question George I just wanted to follow up on some comments you made around C. Five I guess two parts here. So first you mentioned a couple.

Products that you expected it asked but you just said a future medical meeting for C. Five should we expect that that Asher or we're not going to see this at Ash and then you also said that that you're encouraged so should we should we think about that that's something that they get looks like you plan to can move into pivotal studies at this point. Thanks.

George D. Yancopoulos: We shouldn't go any further, we'll show you the data at AASH.

Operator: Our next question comes from Terence. I'm sorry, our next question comes from Matthew Harrison from Morgan Stanley. Your line is now open. Great. Good morning.

Well as I said, we had a a very high bar before we would get excited about it which was we want to feel like we could change the field as you know the current approaches are limited to a intravenous.

George D. Yancopoulos: Thanks for taking the question. George, I just wanted to follow up on some comments you made around C5. I guess two parts here. So, first, you mentioned a couple products that you expect dated ASH, but you just said a future medical meeting for C5. Should we expect this at ASH, or are we not going to see this at ASH? And then you also said that you're encouraged. So, should we think about this as something that it looks like you plan to move into pivotal studies at this point? Thanks.

Delivery, we were looking for a subcutaneous self administered approach and we were also looking for a more complete suppression of homologous and so.

We are excited because we feel like we satisfied our our high bar.

In terms of where we're actually going to presented we're hoping to presented as soon as possible in a major medical conference and so that we don't get prevented from preventing it such as such conferences, we can't tell us where we're presenting sorry about that.

George D. Yancopoulos: Well, as I said, we had a very high bar before we would get excited about it, which was we wanted to feel like we could change the field, as you know, the current approaches are limited to intravenous. Delivery. We were looking for a subcutaneous, self-administered approach and we were also looking for more complete suppression of hemolysis. We're excited because we feel like we've satisfied our high bar.

Next question please.

Our next question comes from Yaron Werber from Cowen. Your line is now open.

Okay, great. Thanks for taking my question. So George maybe that's the one for you relating to give us a sense.

The phase two high dose EIMEA study your to do a testing eight milligrams can you advanced at right away into the parallel phase three pivotals or do you need to show sort of safety first before you can move to a pivotal and the pivotal would have a different dose and maybe if I can just throw in any initial feedback on the be over launch.

George D. Yancopoulos: In terms of where we're actually going to present it, we're hoping to present it as soon as possible in a major medical conference. And so that we don't get prevented from preventing it at such conferences, we can't tell you where we're presenting. Sorry about that. Next question, please.

That you're seeing in the last literally three weeks or so thank you.

I'll leave the last for Marianne to comment on but in terms of the first of course is always safety concerns.

But.

Depending on whether one see something unexpected or not we are planning to do it exactly as you said the phase two is intended to simultaneously be providing data while we're running the phase three to give us confidence that the high dose I leave it is actually.

Operator: Next question please.

George D. Yancopoulos: Our next question comes from Yaron Werber from Cohen, your line is now open. Okay, great. Thanks for taking my questions. So George, maybe just one for you relating to give us a sense in the phase two high dose ILEA study, you're testing eight milligrams. Can you advance that right away into the parallel phase three pivotals? Or do you need to show

Keep performing.

And doing the things that were predicting that it would actually do so we're not limiting the phase three by the phase two data.

George D. Yancopoulos: Thank you.

And Marin.

George D. Yancopoulos: I'll leave the last for Marion to comment on, but in terms of the first, of course, there's always safety concerns, but depending on whether One sees something unexpected or not. We are planning to do it exactly as you said. The phase two is intended to simultaneously be providing data while we're running the phase three to give us confidence that the high-dose ILEA is actually performing and doing the things that we're predicting that it would actually do. So we're not limiting the phase three by the phase two, and Marion.

You know first we're pleased with the.

Performance through this third quarter, and certainly have been in a competitive market for some years, but specifically to the most recent launch Novartis is launch you take all important competition seriously and certainly been prepared for new market entrants, but it is really early so.

Marion McCourt: Sure. And just, you know, first we're pleased with the ILEA performance through this third quarter and, you know, and certainly have been in a competitive market for some years. But specifically to the most recent launch, Novartis' launch, you know, we take all the important competition seriously and, you know, certainly have been prepared for new market entrance. But it is really early, so we can't report on any impact. We're not seeing any impact at this time. And, you know, I think the market will be, you know, looking to product profile to determine issues of safety, efficacy, and product use.

We can't report on any impact we're not seeing any impact at this time and I think the market will be looking to product profile to determine issues of safety efficacy.

And product.

Next question please.

Our next question comes from Evan Seigerman from Credit Suisse. Your line is now then.

Thank you for taking my question Congrats on the progress. So one for Bob I was wondering if you could provide us some more color on the rationale for the newly announced share repurchase program on this that seems to be kind of a deviation from your prior capital allocation strategy. So why now do you believe that your share price is undervalued and that this.

Operator: Next question, please.

Robert E. Landry: Our next question comes from Evan Seigerman from Credit Suisse. Your line is now open.

Robert E. Landry: Thank you for taking my question and congrats on the progress. So one for Bob, I was wondering if you could provide us some more color on the rationale for the newly announced share repurchase program. This seems to be kind of a deviation from your prior capital allocation strategy. So why now? Do you believe that your share price is undervalued and that this is the best way to invest capital? Or are there other factors impacting the decision?

By to invest capital or there other factors impacting the decision. Thank you.

Thanks, Evan for the question and again, we wanted to be kind of pointed during our script with regards to calling out.

The framework that we have on this because we do get a lot of questions on it.

I think exactly where you kind of ended off on the question with regards to we currently like the valuation obviously all the work we do inside here and what we know is coming and going.

Robert E. Landry: Thank you.

Robert E. Landry: Thanks, Evan, for the question. And again, you know, we wanted to be kind of pointed during our script with regards to calling out, you know, the framework that we have on this, because we do get a lot of questions on it. I think exactly where you kind of ended off on the question with regards to, you know, we currently like the valuation, obviously all the work we do inside here and what we know is coming and, you know.

Got it into after I kind of hate devaluation.

[laughter] valuation from a purchasing point of view.

Is what we certainly like.

Thanks for that help lend on that.

We'd like to levels, you know and you know as I tried to point out I mean, we sufficiently invest in R&D in the right.

The right areas things continue to move through the clinic.

We're also where you know going into external.

Leonard S. Schleifer: I'm going to interrupt you. I kind of hate the evaluation.

Transactions you know we mentioned in May the old Eilam transaction, and I talked about a little bit that they're on the scripts. So you know now is the right time with regards to.

Robert E. Landry: ..

Robert E. Landry: The valuation from a purchasing point of view is what we certainly like. Thanks for that help, Len, on that.

Being able to kind of put additional capital to work in again to reiterate what you said you know we do like we think the valuations are attractive from our point of view at this level.

Robert E. Landry: We like the levels, you know, and, you know, as I tried to point out, I mean, we, we sufficiently invest in R&D in the right. The right areas, you know, things continue to move through the clinic. We are also, you know, going into external... Transactions, you know we mentioned in May the O'Neillum transaction and I talked about a little bit that there on the script so you know now is the right time with regards to uh... being able to kind of put additional capital to work and again to reiterate what you said you know we do like we think the valuations are attractive from our point of view at this level

Alright, Thank you guys I appreciate it.

Thanks, Evan next.

Our next question comes from gotten soon job from Guggenheim Partners. Your line is now open.

Good morning, everyone. Congrats on the quarter. The question is on the lung cancer a bit that you've provided today I mean, if you end up with an identical results to create today in the frontline longer setting do you compete on anything other than the prices that going to be the strategy could you maybe comment on the strategy there.

Yes, it's little early to accommodate strategy to receive the data I'd just remind you.

Hi, this is going to be very large space.

Operator: Alright, thank you guys, appreciate it. Thanks, Evan. Our next question comes from Yatin Sunja from Guggenheim Partners. Your line is now open. Good morning everyone and congrats on the quarter.

Could choose Annualizing right now at about I think $12 billion.

And the whole space is predicted to go much larger than that with the most of the sales at least initially coming in lung cancer. We have two strategies I think that Georgia has been a tick you waiting for years. One is we need a foundational strategy. So that if it just turns out the only checkpoint inhibitor that continues to make a difference as it has to go.

Leonard S. Schleifer: The question is on the lung cancer update that you provided today. I mean, if you end up with an identical result to Keytruda in the frontline lung setting, do you compete on anything other than the price? Is that going to be the strategy? Could you maybe comment on the strategy there?

Last five years in lung cancer is a PD one inhibitor, we want to be there with ours and we want to compete and we'll see how the data goes but it could be one experiment away with a there's some combination a coast damaged by specific or something else and then everybody's back loaded up in the starting gate.

Leonard S. Schleifer: Yeah, it's a little early to comment on a strategy until we see the data. I just remind you, this is going to be a very large space.

Leonard S. Schleifer: GATRUT is annualizing right now at about, I think, $12 billion, and the whole space is predicted to go much larger than that with most of the sales, at least initially, coming in lung cancer. We have two strategies, I think, that George has been articulating for years. One is we need a foundational strategy so that if it just turns out the only checkpoint inhibitor that continues to make a difference, as it has for the last five years in lung cancer, is a PD-1 inhibitor, we want to be there with ours, and we want to compete, and we'll see how the data goes. But it could be one experiment away with either some combination, a co-stem, a bi-specific, or something else, and then everybody's back loaded up in the starting gate. So this has been, I think, articulated innumerable times by George. PD-1 is a foundational technology for us in the immuno-oncology space. Lung cancer is the biggest opportunity. We want to be there. Next question, please.

So this is Ben I think articulated innumerable times by George PD, one as a foundational technology for us in the immuno oncology space lung cancer is the biggest opportunity we want to be there.

Next question please.

Our next question. Our next question comes from Cory Kasimov from JP Morgan. Your line is now open.

Hi, guys. Thanks for taking my question on but since I'm not to offer Corey. So my question is on your base him a bi specific programs can you talk about the differences between reach on 54, 59, and 54 58, what informs your decision to advance the former into the clinic and whether this was heading right dependent on the initial 54 50.

Clinical data.

Yes, I mean these are all great questions I think the important point to make is.

It was brought up like by previous call that we're really validating our platform. We're excited that it looks like the platform works and what we're beginning to understand is that one way to control mentally efficacy, but also safety is by the components that are use particularly the key.

Operator: Our next question comes from Corey Kazma from J.P. Morgan. Your line is now open. Hey, guys, thanks for taking my question. And this is Matthew Apricori.

George D. Yancopoulos: So my question is on your BCMA-Bi-specific programs. Can you talk about the differences between Regen 5459 and 5458? What informed your decision to advance the former into the clinic? And whether this was in any way dependent on the initial 5458 clinical data?

Constant components in our platform I remind you they're all created from net entirely natural sequences of antibodies and so for US is no immunogenicity problems and so what we're doing.

We committed not based on any data that we saw the to test a couple of variance.

Oh, the constant aspects of the platform to try to optimize the efficacy safety profile, though obviously, we're seeing what looked like very competitive profiles right now we're always aspiring to even do better. So it's just a matter of building and optimizing our platform to maximize the epic.

George D. Yancopoulos: Yeah, I mean these are all great questions. I think the important point to make is, and it was brought up by a previous caller, that we are really validating our platform and we're excited that it looks like the platform works. And what we're beginning to understand is that one way to control not only efficacy but also safety is by the components that are used, particularly the constant components in our platform. I remind you they're all created from entirely natural sequences of antibodies and so forth. So there's no immunogenicity problems. And so what we're doing, we committed, not based on any data that we saw, but to test a couple of variants of the constant aspects of the platform to try to optimize the efficacy safety profile.

See to safety equation as best as we can learn.

You know, how we can take the platform and generalizing optimize it to the best and that's why we're testing in some cases at least two versions of related by specific so let me just repeat what George said, maybe in my was is that.

The platform is powerful and therefore, the activation energy to try more than one thing is low and so we have that as a competitive advantage.

George D. Yancopoulos: Although obviously we're seeing what look like very competitive profiles right now, we're always aspiring to even do better. So it's just a matter of building and optimizing our platform to maximize the efficacy to safety equation as best as we can and learn how we can take the platform and generalize and optimize it to the best. And that's why we're testing in some cases at least two versions of related bispecifics.

Thank you I think one more time for a time for one more question Cheryl.

Final question comes from Josh Schimmer from Evercore. Your line is now open.

Thanks, much for taking my question it looks like the sequential quarter over quarter growth picks and in the third quarter was much lower.

George D. Yancopoulos: So let me just repeat what George said, maybe in my words is that. The platform is powerful and therefore the activation energy to try more than one thing is low and so we have that as a competitive advantage.

Second quarter, despite very strong underlying prescription trends can you.

It's got some of the factors underlying that including potentially inventory or gross to net fluctuations or any other factors contributed thanks.

Operator: Thank you. I think we have one more time for time for one more question Cheryl.

Good day voice, Josh American and take that.

Josh we're very pleased with the quarter on quarter performance.

Marion McCourt: Our final question comes from Josh Scheimer from Evercore. Your line is now open. Thanks so much for taking the question. It looks like the sequential quarter-over-quarter growth of Dupixan in the third quarter was much lower than it was in the second quarter, despite very strong underlying prescription trends. Can you discuss some of the factors underlying that, including potential inventory or gross-to-net fluctuations or any other factors involved?

I mentioned in my script, when we just look at obviously the percentage growth of Trx this quarter over quarter and I believe it was 21% is quite substantial.

As it relates to gross to net inventory I know that inventory.

Normal range, and therefore don't have more Q.

Sure report on that area.

Thank you.

Great.

Thank you everybody for joining the call will be around to take questions.

Marion McCourt: Thank you. Thank you.

Operator: Good to hear your voice, Josh, and Marion will take this. Sure, happy to. So, Josh, we're very pleased with the quarter-on-quarter performance.

Thanks, a lot.

Thank you ladies and gentlemen, this concludes our conference for this morning. Thank you for your participation you may now disconnect.

Marion McCourt: And as I mentioned in my script, when we did look at, obviously, the percentage growth of TRX is quarter over quarter, and I believe it was 21%, it was quite substantial. You know, as it relates to gross net and inventory, I know that inventory is within the normal range, and therefore don't have more to report on that area.

[noise].

Operator: Thank you everybody for joining the call. We'll be around to take questions.

Operator: Thanks a lot. Thank you, ladies and gentlemen. This concludes our conference for this morning. Thank you for your participation. You may now disconnect.

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