Q3 2020 Regeneron Pharmaceuticals Inc Earnings Call

Ladies and gentlemen, thank you for standing by.

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Regeneron Pharmaceuticals webinar. Instructions will follow at the end of the webinar. If anyone should require assistance during the conference, you can press star- I would now like to hand the microphone to Deborah. Good morning, good afternoon, and good evening to everyone listening around the globe.

You're welcome to the Regeneron pharmaceuticals.

2020 earnings call.

At this time, all participants are and listen only mode.

After the sneakers presentation, there will be a question nature session instructions will follow at that time.

If anyone should require assistance during the conference you can print sorry zero.

I would now like to hand, the conference over to your Speaker Justin Holcombe. Please go ahead Sir.

Thank you Deborah good morning, good afternoon, or good evening to everyone listening around the globe.

Thank you for your interest in Regeneron Pharmaceuticals, and welcome to the third quarter 2020 conference call. An archive of this webcast will be available on our web site joining.

Operator: Thank you for your interest in Regeneron Pharmaceuticals and welcome to the third quarter 2020 conference call. An archive of this webcast will be available on our website. Joining me on the call today are Dr. Leonard Schleifer, Founder, President, and Chief Executive Officer; Dr. George Yancopoulos, Co-Founder, 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 today's call include forward-looking statements about Regeneron. Such statements may include, but are not limited to, those related to Regeneron and its products and business. Financial Forecasts and Guidance, Development Programs and Related Anticipated Milestones, Collaborations, Finances, Regulatory Matters, Payer Coverage, and Reimbursement Issues, as well as Intellectual Property, Pending Litigation, Other Proceedings, and Competition. Each forward-looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement.

Joining me on the call today, our Doctor Leonard Slifer, founder President and Chief Executive Officer, Dr. Georgia Accomplice, co founder President and Chief Scientific Officer, Marion Mccourt, Senior Vice President and head of commercial and Bob Landry Executive Vice President and Chief commercial Chief Financial Officer after all.

Repaired remarks will open the call for Q&A.

I would also like to remind you that remarks made on today's call include forward 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 as well as intellectual property pending litigation other proceedings in competition. Each forward looking statement is subject to risks and.

Does that could cause the 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 filings with the United States Securities and Exchange Commission, including its form 10-Q for the quarterly period ended September 30th 2020, which has been filed with the SEC today.

Operator: 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, 2020, which was filed with the SEC today. Regeneron does not undertake any obligation to update 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 in 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.

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

<unk> in our financial results press release, which can be accessed on our website.

Once our call concludes Bob Landry and the I R team will be available to answer further questions with that let me turn the call over to our President and Chief Executive Officer Doctor Lynch Lifer.

Justin: Once our call concludes, Bob Landry and the IR team will be available to answer further questions. With that said, let me turn the call over to our President and Chief Executive Officer, Dr. Len Schleifer. Thank you, Justin, and thanks to everyone joining today's call. In the third quarter, Regeneron delivered another strong financial performance, double-digit top and bottom line growth, while achieving numerous milestones in our research and development pipeline and making remarkable progress against COVID-19 with our novel antibody cocaine. Importantly, our growth and financial strength are being fueled by an increasingly diversified set of revenue and earnings, while we invest in R&D for the long term. Furthermore, our results show the importance of products that meaningfully address serious medical needs and have the power to transform lives, even during a pandemic. ILEA is a great example.

Thank you Justin and thanks to everyone joining today's call.

To the third quarter Regeneron deliberate another strong financial performance double digit top and bottom line growth.

While achieving numerous milestones in our research and development pipeline and making remarkable progress against COVID-19, with a novel anybody cocktail.

Importantly, gross and financial strength is being fueled by an increasingly diversified set of revenue and earnings dreams, while we invest in R&D for the long term.

Len Schleifer: ILEA global net sales were $2.1 billion in the quarter and grew 9% compared to the same period last year. In the U.S., sales rebounded from second quarter COVID lows to $1.3 billion and grew 11% compared to the previous year. The efficacy, safety, and convenience that ILEA offers in protecting eyesight have proven to be highly valued by treating physicians and their patients. But has the product again outperformed the anti-VEGF market for retinal disease? Next, we continue to build momentum with Dupixit as we in Santa Fe recorded our first ever quarter of more than $1 billion in sales. This milestone speaks to the power of dupicts across a broad array of type 2 inflammatory diseases and to our team's ability to execute despite COVID-19. We recently announced results from another successful Phase 3 trial, this time in pediatric asthma. We are eager to submit these data for regulatory review and expect that PICSINT will remain a robust and durable growth driver for years to come. In oncology, we are solidifying our leadership position in cutaneous squamous cell carcinoma. Additionally, the FDA has granted priority. Regulatory Filings in Lung Cancer and Basal Cell Carcinoma

Len Schleifer: As we prepare for potential launch, these indications early may, Regeneron is also making critical in the Treatment of Infectious Diseases. Last month, the FDA improved Inmizet, the first-ever treatment for the Ebola virus. Building upon our work in Ebola, our team and rapid response technologies have developed our novel REGN-CoV-2 antibody in the fight against COVID-19. Last week, we announced another major data set from our outpatient clinic that showed our antibody cocktails significantly reduced viral loads as well as medically-attacked patients. Emergency Room Visits and Hospitalization

You have to pay up for potential lunches and these indications early next year.

Regeneron is also making critical advancements in the treatment of infections infectious diseases last month. The F. D. A improved M. As in the first I have a treatment for a bola virus infection.

Building upon a work in a bola our team and rapid response technologies have developed or novel R. A G N coke too antibody cocktail and the fight against COVID-19.

Last week, we announced another major data set from or an outpatient study that showed our antibody cocktail significantly reduced viral loads as well as medically attended visits such as emergency room visits and hospitalizations we.

Len Schleifer: We have submitted these data to regulators and eagerly await guidance. In closing, we could not be prouder of our teams and everything they have been able to achieve across the organization in the third quarter and in 2020 so far. Our momentum is accelerating with an impressive growth profile. In 2021, we look forward to building upon several important launches for LaTiya, Dupixent, and others, further enhancing our diverse growth platform. We are excited by the progress we are making against COVID-19, and we are confident that our investments in R&D to broaden and advance our pipeline, at all stages, will position Regeneron well. Dane Crowe, Now I'll turn the call over to you. Thanks, one.

We have submitted these days to regulate is and eagerly await guidance on next steps.

In closing, we could not be proud of our teams and everything they have been able to achieve across the organization in the third quarter and then 2020 to date.

Ah momentum is accelerating with an impressive growth profile.

In 2021, we look forward to building upon that momentum with several important lunches for <unk> and other programs further enhancing our diverse growth platform.

We are excited by the progress, we're making against COVID-19.

And we are confident that our investments and R&D to broaden in advance of pipeline of course, all stages will position regeneron well for sustained growth now I'll turn the call over to George.

Thanks Lynn.

And is Lynn just pointed out we are advancing programs across all stages of our diverse and growing portfolio.

Ryan Crowe: And as Len just pointed out, we are advancing programs across all stages of our diverse and growing portfolio. With the pandemic unfortunately still raging and even escalating, we know there's a lot of focus on COVID-19, and we will start with our REGEN-COV-2 program. From the beginning, there was a lot of attention to our efforts against the coronavirus because of our success using a similar approach with

With the pandemic, Unfortunately, still raging and even escalating we know there's a lot of focus on COVID-19, and we will start with our return Cup to program from the beginning there was a lot of attention to our efforts against the Corona virus because of our success using a similar approach with the bola.

As you just heard from when we received F D. A approval <unk> or a bowl of cocktail that our team delivered validating our approach for not only this but other deadly infectious diseases, and particularly COVID-19.

We are investigating region Cove to our anybody cocktail for COVID-19, and infected patients as well as for prevention and several ongoing clinical trials.

Earlier this year, we released a descriptive analysis of the first 275 patients in the region Coke too seamless phase two three trial in ambulatory patients importantly, we obtained insights into the natural history of COVID-19 from these early data.

Ryan Crowe: As you just heard from Len, we received FDA approval for our Ebola cocktail that our team delivered, validating our approach for not only this but other deadly infectious diseases, and particularly COVID-19. We're investigating RegenCoV-2 or antibody cocktails for COVID-19 in infected patients as well as for prevention in several ongoing clinical trials. Earlier this year, we released a descriptive analysis of the first 275 patients in the REGEN-COV-2 seamless Phase 2-3 trial in ambulatory patients. Importantly, we obtained insights into the natural history of COVID-19 from these early data; large numbers of patients normally generate their own antibodies against the virus early on, and this robust endogenous immune response is associated with rapid clearance of the virus and decreased need for medical attention.

Large numbers of patients.

Normally generate their own antibodies against the virus early on in this robust and does this immune response is associated with rapid clearance of the virus and decreased need for medical attention.

That's why most patients do so well however, some patients are slow to Mount an immune response and are at higher risk for attended medical visits in line with this observation. Our initial analysis showed that providing are exogenous antibody cocktail did not provide much benefit the fast responders, but it better.

<unk>, those who did not mount their own immune responses efficiently, allowing reject cove to to clear virus more rapidly and decrease the need from you is your future medical attention and these otherwise slow responders.

Ryan Crowe: That's why most patients do so well. However, some patients are slow to mount an immune response and are at higher risk for medical visits. In line with this observation, our initial analysis showed that providing our exogenous antibody cocktail did not provide much benefit to the fast responders, but it benefited those who did not mount their own immune responses efficiently, allowing RegenCov2 to clear the virus more rapidly and decrease the need for future medical attention in these otherwise slow responders. Last week, we provided important updates from this ongoing study in ambulatory COVID-19 patients. In a formal statistical way, we presented prospective validation of our earlier observation in a confirmatory analysis involving more than 500 additional patients. Data showed significant viral load reductions in patients treated with RegenCov2 compared to placebo.

Including the two less severe patient cohorts and are hospitalized patients study.

Since the lower of the two region Cove, two doses demonstrated activity comparable to the higher dose, suggesting that both doses maximize the benefit of this approach we intend to investigate even lower doses going forward effective this will allow us to extend the benefit of our cocktail to even more patients.

Ryan Crowe: Consistent with earlier data, these results were driven by patients who had not mounted their own effective immune response at the time of treatment or had high viral loads at baseline. Importantly, results from the combined analysis of the first 799 patients enrolled in this study demonstrated a statistically significant reduction in medically attended visits, including hospitalizations and emergency room visits. This effect was most prominent in patients with high risk factors, high viral loads, and those who had not yet mounted their own immune responses.

As we await next steps on the regulatory front, we continue to ramp up production for region Cove to under R. U S. Government agreement, we now expect to have.

Two four Graham treatment doses ready for approximately 80000 patients by the end of this month 200000 total doses ready by the first week of January and approximately 300000 total doses ready by the end of January we continue to increase our in house production capacity for further doses of region Cove too and.

There are thrilled to be partnering with Roche to substantially expand global capacity of region Cove to as their production comes online early next year.

Moving onto depicts it we.

Ryan Crowe: We will share these data with the FDA as an update to our EUA submission and await regulatory feedback. We are investigating the potential benefit of this Regen-COV-2 cocktail in different stages of disease in our other ongoing studies. For example, our household contact study, which is testing the cocktail as a prophylactic treatment, has enrolled approximately 1,000 patients to date.

Ryan Crowe: In hospitalized patients, we have two ongoing studies. Our study, as well as the UK Recovery Protocol, all Regeneron-sponsored COVID-19 treatment trials are being supervised by the same Independent Data Monitoring Committee, which recently recommended that we pause enrollment in two cohorts representing the most severe hospitalized patients, while recommending that all our other studies continue as initially designed, including the two less severe patient cohorts in our hospitalized patient study. Since the lower of the two Regen-COV-2 doses demonstrated activity comparable to the higher dose, suggesting that both doses maximized the benefit of this approach, we intend to investigate even lower doses going forward.

Obstructive pulmonary disease or CRPD along with.

To pick a man are in our anti interleukin 33 antibody based on achieving a pre specified efficacy milestone in an interim analysis of our first phase III study in type two CRPD, we initiated a second dupixent phase three study.

Ryan Crowe: If effective, this could allow us to extend the benefit of our cocktail to even more patients. As we await next steps on the regulatory front, we continue to ramp up production for RegenCOV-2. Under our U.S. government agreement, we now expect to have 2.4 gram treatment doses ready for approximately 80,000 patients by the end of this month, 200,000 total doses ready by the first week of January, and approximately 300,000 total doses ready by the end of January. We continue to increase our in-house production capacity for further doses of RegenCoV-2 and are thrilled to be partnering with Roche to substantially expand global capacity of RegenCoV-2 as their production comes online early next year. Moving on to

Ryan Crowe: We recently announced positive phase 3 data in asthma for children ages 6 to 11. In this study, Dupixan reduced severe asthma attacks by up to 65% versus placebo over one year. And Dupixan also rapidly and sustainably improved lung function in these children. We are planning to file these data with regulators early next year. Additionally, in Europe, we received a positive CHMP committee recommendation for dupixen in atopic dermatitis in children ages 6 to 11.

Ryan Crowe: The DUPIXEN clinical program continues to progress and expand across a wide range of type 2 inflammatory conditions. In September, the FDA granted breakthrough therapy designation for Dupixen in eosinophilic esophagitis based on early phase 3 results, which were recently presented at medical meetings. Before the end of the year, we expect to report Phase II data for Dupixen in combination with oral immunotherapy for peanut algae.

Date of March 3rd 2021, we continue to make significant progress with lip tile as a foundation to oncology strategy moving.

Moving onto our oncology Bispecific efforts, we are in a pivotal program and non hodgkins lymphoma for our CD 20 by C. Three by specific to your next demand also known as region 1979, we're working towards initiating a pivotal program for region 50, 458 are <unk> by CD three bispecific.

For relapsed refractory multiple myeloma and in solid tumors dose escalation for region 40, 18, or muck 16 by three Bispecific continues and the first in human studying ovarian cancer, and which were observing preliminary evidence of activity.

Ryan Crowe: Additionally, Phase III studies are ongoing in several additional dermatology and pulmonary indications with readouts expected in 2022 and 2023, and we expect to begin additional Phase III pivotal trials by the end of the year. Putting this all together, Dupixent will soon be in pivotal trials for eight Type II diseases that are not currently in the label and could address diseases in nearly one million additional patients in the United States alone. Dupixent is also an important part of our two-pronged approach against chronic obstructive pulmonary disease, or COPD, along with itupicumab, our anti-interleukin 33 antibody. Based on achieving a pre-specified efficacy milestone in an interim analysis of our first phase 3 study in type 2 COPD, we initiated a second phase 3 study, with data readouts expected in 2023. We believe that our anti-IL-33 antibody could help an additional group of COPD patients beyond those with type 2 disease. Based on proof of concept data that has been submitted for publication, we believe that blocking IL-33 could be especially useful in the former smoker COPD patient subset.

We are excited about the encouraging data we are observing in the studies of our CD three classify specifics. However, we believe that are key potential advantage over other approaches is our ability to mix and match. The CD three five specifics with not only are anti PD, one, but also with our next classify specifics.

The novel, CD, 28, or co stimulatory by specifics.

Our CD three by statistics currently in the clinic are designed to be paired with matching coast in by specifics for targets on a variety of different Kansas with the intent to Synergistically unleashed the power of EMEA oncology more broadly than currently approved treatments are first coast in Bispecific PSIA bye.

<unk> 28 in combination with lip tire for prostate cancer is progressing through dose escalation cohorts and first for the therapy as well tolerate we will soon start trials with two novel costumes Muck 16 by CD 28 in combination with either or <unk> or with lift tile for ovarian cancer.

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And our Egfr by <unk> 28, and combination for tile for solid tumors, including inlet long head and neck and colorectal Kansas.

The first member of a third class of tumor targeting by specifics are met by met by specific has recently completed dose escalation and is currently in the dose expansion phase of the first in human trial recall remember despite specific targets two distinct epitopes on the met oncogene, causing rash.

<unk> internalization of this receptor and ablation of it's signaling met mutations are present in 3% to 4% and met gene amplification in about another 3% of non small cell lung cancer.

Ryan Crowe: Pivotal, ITPIC-IMAP program, consisting of two parallel Phase III studies, will initiate by year-end. We hope that Dupixen and ITPIC-IMAP can provide real benefit for the many desperate patients suffering from COPD. Moving on to oncology and first lip tile

Ryan Crowe: At the European Society for Clinical Oncology, or ESMO, meeting in September, we shared results of our first pivotal, our pivotal first line non-small cell lung cancer study, as well as our locally advanced basal cell carcinoma, or BCC, study. These data are now filed as supplemental label applications with the regulators, with the FDA recently awarding priority review for approval of Leptio as monotherapy in a proposed lung cancer indication, with an action date of February 28, 2021. We also announced that we completed enrollment in a Leptio chemotherapy combination trial in first-line lung cancer, with first results from this study available as early as next year. Also, the BCC results presented at ESMO showed that Leptio has the potential to be the first approved treatment with a clinical benefit in the advanced BCC setting, following failure of a hedgehog inhibitor.

Those with the groundbreaking systemically delivered CRISPR Casnine gene editing therapy, a potential one engine treatment for transparent amyloidosis or a TTR as the first systemically administered gene editing intervention, we hope that this will provide.

Ryan Crowe: The FDA granted priority review for a BCC filing with an action date of March 3, 2021. We continue to make significant progress with Leptio as a foundation for our oncology strategy. Moving on to our oncology bispecific efforts, we are in a pivotal program in non-Hodgkin's lymphomas for our CD20 by CD3 bispecific, or Gernextamab, also known as Regen1979. We're working towards initiating a pivotal program for Regen5458 or BCMA by CD3 bispecific for relapse-refractory multiple myeloma. And in solid tumors, dose escalation for Regen4018 or MUX16 by CD3 bispecific continues in the first in human study in ovarian cancer, where we are observing preliminary evidence of activity.

Proof of concept for future systemic gene editing efforts Alnylam and Intellia collaborations represent an important new strategy for regeneron as we attempt to broaden our efforts in the future of genetic therapies, where we combine our capabilities and expertise to help empower those of our partners and to help change the price.

Active Madison and make new forms of gene therapy a reality.

Ryan Crowe: We are excited about the encouraging data we are observing in the studies of our CD3 class of bispecifics. However, we believe that our key potential advantage over other approaches is our ability to mix and match the CD3 bispecifics with not only our anti-PD1 antibody, but also with our next class of bispecifics, the novel CD28 or co-stimulatory bispecifics. Our CD3 bispecifics currently in the clinic are designed to be paired with matching co-stim bispecifics for targets on a variety of different cancers. We intend to synergistically unleash the power of immuno-oncology more broadly than currently approved treatments. Our first co-stim bispecific, PSMA by CD28, in combination with Liptio for prostate cancer, is progressing through dose escalation cohorts, and thus far, the therapy is well tolerated.

Ryan Crowe: We will soon start trials with two novel co-stims, MUX16 by CD28 in combination with either our MUX16 by CD3 bispecific or with Liptio for ovarian cancer, and our EGFR by CD28 in combination with Leptile for solid tumors, including lung, head and neck, and colorectal cancer. The first member of a third class of tumor-targeting bispecifics, our MET by MET bispecific, has recently completed dose escalation and is currently in the dose-expansion phase of the first in-human trial. Remember, this bispecific targets two distinct epitopes on the MET oncogene, causing rapid internalization of this receptor and ablation of its signaling. Met mutations are present in 3-4% and met gene amplifications in about another 3% of non-small cell lung cancer.

Offering dosing flexibility real world experience and establish safety led to a quicker recovery and stronger growth across all indications than the competition alias flexible 12 week dosing regimen and web M D and the newly launched pre filled syringe also support earliest market leading value proposition.

We are monitoring the recent spike and coronavirus cases across the country and some hot spots retina offices are beginning to see some modest reductions in patient volume, which may impact future eylea demand that said retinal offices have become highly effective in managing their patients and this.

Environment compared to the early days of the pandemic in summary, alea had an impressive quarter.

Ryan Crowe: Across our pipeline, we are pleased with the progress we are making across all stages of our rich oncology portfolio to compete, enhance, and extend the power of immune oncology to more patients suffering from a wide variety of cancers. Beyond oncology, our pipeline continues to expand. In our C5 program, we will shortly begin dosing healthy volunteers in combination with El Nylam's C5 RNAi inhibitor, Semdisirin. The goal of the combination approach is to achieve convenient self-administration with the subcutaneous dosage form in addition to the more complete and durable blockade of complement activation in patients suffering from paroxysmal nocturnal hematuria and other complement-mediated diseases.

Ryan Crowe: This will be the first example of a combination of an antibody with an RNAi against the same target, and we believe that this could be the first in a series of innovative antibody-RNA combinations that could change the treatment paradigm in multiple disease settings. We are also excited about additional collaborative programs with El Nylem, including utilization of their siRNA approach against targets that we have identified through our Regeneron Genetic Center. As El Nylem has just announced, they have initiated dosing an siRNA against one such target, HSD17B13, for the treatment of NAS. Additionally, I want to acknowledge an important milestone for another innovative collaboration we have with Intelia. In the very near term, the first patient should be dosed with the groundbreaking systemically delivered CRISPR-Cas9 gene-editing therapy, a potential one-and-done treatment for transtheridin amyloidosis, or ATTR. As the first systemically administered gene-editing intervention, we hope that this will provide Proof of Concept for future systemic gene editing efforts.

Including patients with stable brain metastasis infections and progressive disease.

These data along with an additional product attributes support reptile is a potential new option for anti PD, one monotherapy in the treatment paradigm.

Finally, moving to pick since global net sales in the second quarter were 1.1 billion, representing 69% growth compared to the prior year in the us broad based growth across all indications contributed net sales of $851 million.

Ryan Crowe: The Alnylam and Intelia collaborations represent an important new strategy for Regeneron as we attempt to broaden our efforts in the future of genetic therapies, where we combine our capabilities and expertise to help empower those of our partners and to help change the practice of medicine and make new forms of gene therapy a reality. By the end of this year, we and our collaborators will have introduced eight new investigational therapies into the clinic, an accomplishment we are proud of in a challenging year. To conclude, we are looking forward to several catalysts over the next several months. We expect imminent updates and additional data readouts on our RegenCOVE2 therapy, first regulatory approval for Evanacumab by February of next year, approval for first-line lung cancer and basal cell carcinoma indications for Leptile, filing for Dupixen and pediatric asthma, and many more to come. It is a very exciting time at Regeneron. With that, I would like to turn the call over to Marion. Thank you, George.

Among all specialties patient visits improved throughout the quarter as the healthcare field has adapted to treating patients in the current environment current weekly new patient starts have recovered and are nearing pre pandemic levels.

Marion McCourt: Our third quarter commercial results reflect solid execution across our core brands, Alia, Dupixen, and Leptio. We remain confident that the competitive strengths of our growing and diversified commercial portfolio will carry us through and beyond the COVID-19 environment. I'm going to begin with ILEA, which grew 9% year-over-year to approximately $2.1 billion in global net sales. In the U.S., ILEA grew 11% year-over-year with net sales of more than $1.3 billion as anti-VEGF demand recovered. In the U.S., ILEA outperformed the category with share gains from both branded and unbranded competition. In fact, ILEA's share of the branded U.S. category grew to more than 70% for the quarter based on volume, and ILEA remains the number one prescribed anti-VEGF therapy in wet AMD and diabetic eye disease. Patient volume increased as those who delayed treatment earlier this year have returned to retin-offices. ILEA's market-leading clinical profile offering dosing flexibility, real-world experience, and established safety led to a quicker recovery and stronger growth across all indications than the competition. ILEA's flexible 12-week dosing regimen in wet AMD and the newly launched prefilled syringe also support ILEA's market-leading value proposition.

Kitchen and benefit as many as 75000 eligible children. Additionally, we see strong uptake in chronicle honest I decided with nasal polyps since approval last year patients has been initiated armed pick sense, regardless of prior surgery, while the availability of elective surgeries has improved as health care.

[noise] facilities have reopened demand for depicts sent remained strong among E N T as an allergist.

[noise] depiction is making an important contribution to our business and we're excited about this significant opportunity for future growth.

From our inline business and from new potential indications age groups and Geography's ink.

In closing our commercial teams delivered strong performance across our diversified portfolio.

We have a set of meaningfully differentiated products that are growing despite COVID-19. Additionally, we will enter a new phase of launches in 2021, including ever knock them up for H O F. H pediatric asthma for depictions and long N. B C. C for lip Taio. These launches will add Thomas.

Marion McCourt: We are monitoring the recent spike in coronavirus cases across the country. In some hotspots, retina offices are beginning to see some modest reductions in patient volume, which may impact future ILEA demand. That said, retina offices have become highly effective in managing their patients in this environment compared to the early days of the pandemic. In summary, ILEA had an impressive quarter.

And the significant growth of our business is very exciting times at Regeneron I'll turn the call to Bob.

Marion McCourt: Turning next to Liptio, third-quarter global net sales grew to $96 million. In the U.S., net sales were $72 million, with consistent and steady volume growth, aided by the gradual reopening of infusion centers and an increase in breadth of prescribing. Liptio continues to drive overall market growth in advanced cutaneous squamous cell carcinoma and remains the most prescribed systemic treatment for CS

Thank you Miriam.

For the third quarter of 2020 Regeneron delivered strong based.

Growth on both the top and bottom lines, resulting from continued execution across all aspects of barbies improving.

Improving to pick some profitability and contributions from additional revenue sources highlight the continued diversification over a business.

For the third quarter total revenues grew 32% year over year to 2.29 billion driven by strong U S soil your growth and higher Sanofi collaboration revenues as a result of increased to pick some sales and achievement of a 50 million dollar sales milestone.

Marion McCourt: Alia remains the anti-PD-1 of choice, with nearly 90% market share of the class. The overall profile of high response rates with many complete and durable responses positions Libtio for continued growth. To fuel additional growth, we anticipate two new potential indication launches in non-small cell lung cancer and basal cell carcinoma in the first quarter of 2021. For basal cell carcinoma, we aim to build upon our success in CSCC and establish Libtio as the standard of care for non-melanoma skin cancers.

Non-GAAP diluted net income per share grew twenty-five percent year over year to $8.36 on non-GAAP net income of 961 million.

Since marrying discuss the U S. Eylea results I will start with our Bayer is trying to feed collaborations starting with the bay or collaboration X U S. Eilean that product sales reported to us by bear where 780 million representing growth of 7% on a reported basis compared to the prior year in a 22% improvement.

From second quarter 2020, Lowes total bear club collaboration revenue was 300 million of which we recorded 288 million for our share of net profits from my Lea sales outside the U S.

Marion McCourt: We expect Libtio to be first in class and will work to establish it as the standard of care in second line BCC. Non-small cell lung cancer is the largest opportunity within the PD-1 space, with more than 200,000 new diagnoses of lung cancer in the U.S. each year. We plan to leverage our oncology presence as a majority of treatment centers and oncologists are familiar with Liptio and CSCC. We believe that patients, providers, and payers prefer choice in determining the most appropriate treatment. Liptio demonstrated an overall survival benefit in a real-world, higher-risk population of patients, including patients with stable brain metastases, infections, and progressive disease. These data, along with additional product attributes, support Liptio as a potential new option for anti-PD-1 monotherapy in the treatment paradigm.

Total Sanofi collaboration revenue was 353 million in the third quarter or.

Our share of the profits from the commercialization of non I owe antibodies was $213 million. This compares favorably to profits of $94 million and the prior year, which was primarily driven by higher to pick. Some profits. We also recognized a 50 million dollar milestone payment from Sanofi as a result of depiction praluent and <unk>.

<unk> X U S sales achieving $1 billion in the trailing 12 month period.

Next we announced in July of $450 million supply agreement with the U S government for batches of Virgin Cope too.

We record sales is batches are supplied to the government and the third quarter of 2020 under this agreement we recorded an initial $40 million a sales for Virginia Cove two weeks.

We expect that in the fourth quarter of 2020, we will record sales approximating half of the value of disagreement sales for the remaining batches are expected to be recorded in the first quarter of 2021.

Marion McCourt: Finally, moving to DEPIXENT, global net sales in the second quarter were $1.1 billion, representing 69% growth compared to the prior year. In the U.S., broad-based growth across all indications contributed to net sales of $851 million. Among all specialties, patient visits improved throughout the quarter as the healthcare field adapted to treating patients in the COVID environment. Current weekly new patient starts have recovered and are nearing pre-pandemic levels. The 300 milligram prefilled pen was launched this quarter, providing additional patient convenience and choice. Atopic dermatitis remains Dipixen's largest indication and is a significant growth driver based on its rapid onset, proven efficacy, and well-established safety profile.

And other revenue, we recorded 159 million versus 37 million in the prior year. The primary driver of this increases the recognition of $70 million from the U S government associated with reimbursement, so bar, a bola and Virgin Cove to development.

Recognition of 28 million in connection with the Regeneron genetic center sequencing, a certain number of X homes.

As well as a reimbursement for X U S supply of Praluent to Sanofi looking ahead to the fourth quarter and 2021, we expect the other revenue line to trend lower in the absence of an Archie milestone and reduced reimbursements from the U S government on a bola.

Moving til our expense space, starting with R&D, non-GAAP, R&D increased 35% year over year to $629 million.

Driven by significant clinical development costs for a regime cove to anybody cocktail higher head count to support or expanding pipeline increased clinical manufacturing activities and continued advancement of our partner programs without <unk> and <unk> and other early stage partners.

Marion McCourt: We continue to expand prescribing across both moderate and severe disease. However, despite the impressive growth trajectory since launch, a low percentage of biologic-eligible patients have been treated, leaving substantial opportunity for more patients to benefit. Our ongoing launches for both adolescent and pediatric patients are progressing very well. Since the May launch of the pediatric indication, we are seeing encouraging trends comparable to the adolescent launch where initiations grew rapidly, and HCPs were quick to prescribe. Significant runway is evident with approximately 400,000 adolescents and 90,000 children in this country that could benefit from Dupixent therapy. Moving to asthma, Dupixent performs well in the competitive asthma space based on its clinical, efficacy, and safety profile.

Next non-GAAP SG&A expense increased 10% year over year to 291 million the year over year increase was largely driven by increased head count as well as commercial costs for Eylea and probably won't cost of collaboration and contract manufacturing was 143 million compared to 110 million in the third quarter of 2019.

Primarily due to increase sales of depiction.

Non-GAAP cost of goods increased 22% from the prior year related to higher sales of lip tile and the inclusion of sales from Praluent and Virgin Cope too <unk>.

Turning now to taxes, the non-GAAP effective tax rate was 16.3% in the third quarter of 2020 compared to 13.6% in the third quarter of 2019, primarily due to discrete items to the quarters.

Shifting now to cash flow and the balance sheet.

Marion McCourt: Our national DTC campaign is well underway, and we are seeing an uptick in new initiations. We look forward to submitting our pediatric clinical data to regulators, which could lead to further label expansion and benefit as many as 75,000 eligible children. Additionally, we see a strong uptick in chronic rhinocidiascitis with nasal polyps.

Marion McCourt: Since approval last year, patients have been initiated on Dupixent regardless of prior surgery. While the availability of elective surgeries has improved as healthcare facilities have reopened, demand for Dupixent has remained strong among ENTs and allergists. PIXENT is making an important contribution to our business, and we're excited about the significant opportunity for future growth from our inline business and from new potential indications, age groups, and geographies. In closing, our commercial teams delivered strong performance across our diversified portfolio. We have a set of meaningfully differentiated products that are growing despite COVID-19. Additionally, we will enter a new phase of launches in 2021, including Evanocumab for HOFH, Pediatric Asthma for Dipixent, and Lung and BCC for Liptio. These launches will add to our momentum and the significant growth of our business. These are very exciting times at Regeneron. I'll turn the call over to Bob.

<unk> increased expenses in the fourth quarter and into first half 2021 also while we're not providing 21 2021 guidance today, we do expect that 2021 full year R&D expenses will increase to fund in advancing and expanding pipeline as well as early stage partnership assets.

Robert E. Landry: Thank you, Marion. For the third quarter of 2020, Regeneron delivered a strong base. Growth on both the top and bottom lines, resulting from continued execution across all aspects of our business. Improving depiction profitability and contributions from additional revenue sources highlight the continued diversification of our business. For the third quarter, total revenues grew 32% year-over-year to $2.29 billion, driven by strong U.S.-ILEA growth and higher Sanofi collaboration revenues as a result of increased depictions in sales and achievement of a $50 million sales Non-GAAP diluted net income per share grew 25% year-over-year to $8.36 on a non-GAAP net income of $961 million.

In conclusion, Regenerons business remains healthy and we continued to deliver strong year over year growth as we diversify our revenue and earnings and advance our robust pipeline, we remain well positioned for future growth with healthy core brands in multiple near term launches, while investing in our R&D engine to drive longer term growth with that I'd.

Robert E. Landry: Since Marion discussed our U.S. ILEA results, I will start with our Bayer and Sanofi collaboration. Ex-US ILEA net product sales reported to us by Bayer were $780 million, representing growth of 7% on a reported basis compared to the prior year and a 22% improvement from second quarter 2020 lows. Total Bayer collaboration revenue was $300 million, of which we recorded $288 million for our share of net profits from ILEA sales outside the U.S. Total Sanofi Collaboration revenue was $353 million in the third quarter. Our share of the profits from the commercialization of non-Io antibodies was $213 million. This compares favorably to profits of $94 million in the prior year, which was primarily driven by hire to pick up and profits.

But we remain incredibly enthusiastic and excited about this class and we're investing enormously as I said, we have pairs of C. Three and C. D 28 by specifics for numerous.

Different cancers, not only the ones that are already in the clinic, but ones that will be entering into the pipeline over the next year or two or three so we're very excited about this class and the potential of combining them.

Robert E. Landry: We also recognized a $50 million milestone payment from Sanofi as a result of Depixin, Pralulin, and Kevzar ex-U.S. sales achieving $1 billion in the trailing 12-month period. We announced in July a $450 million supply agreement with the U.S. government for batches of Regen-CoV-2. We record sales as batches are supplied to the government.

The two sets of by specifics as well as with the P. D. One.

Next question please.

And your next question comes from Chris Frightening with hyper Sandler.

Hey, Thank you you're just on Regeneron Cove to just wondering if you could walk through the biology behind why there would be a safety signal and these fantod or high flow oxygenated patients.

Robert E. Landry: In the third quarter of 2020, under this agreement, we recorded an initial $40 million of sales for RegenCoV-2. We expect that in the fourth quarter of 2020, we will record sales approximating half of the value of this agreement. Sales for the remaining batches are expected to be recorded in the first quarter of 2021, and other revenue. We recorded $159 million versus $37 million in the prior year.

Robert E. Landry: The primary driver of this increase is the recognition of $70 million from the U.S. government associated with reimbursements for our Ebola and RegenCoV-2 development, and $28 million in connection with the Regeneron Genetic Center sequencing a certain number of exomes, as well as a reimbursement for the ex-U.S. supply of Pralulent to Sanofi. Looking ahead to the fourth quarter, end 2021, we expect the other revenue line to trend lower in the absence of an RGC milestone in reduced reimbursements from the U.S. government on Ebola. Moving to our expense space, and starting with R&D. Non-GAAP R&D increased 35% year over year to $629 million, driven by significant clinical development costs for our Regen-COV-2 antibody cocktail, higher headcount to support our expanding pipeline, increased clinical manufacturing activities, and continued advancement of our partner programs with El Nilem, Intelia, and other early stage partners.

The 10-Q, you listed the way for the Abbey cocktail. During this quarter is this official guidance from the FDA and any idea as to what patient population that the seaway would be granted for.

So.

We have said that we are focusing on a patient population, where the data comes from Rich's outpatients.

Who have the best.

Robert E. Landry: Next, Non-Gap SG&A Expense increased 10% year-over-year to $291 million. The year-over-year increase was largely driven by increased headcount, as well as commercial costs for ILEA in Praline. Cost of collaboration and contract manufacturing was $143 million compared to $110 million in the third quarter of 2019, primarily due to increased sales of Dupixent. Non-Gap Cost of Goods increased 22% from the prior year, related to higher sales of Liptio and the inclusion of sales from Pralulent in Regen Cope II.

Robert E. Landry: Turning now to taxes, the non-GAAP effective tax rate was 16.3% in the third quarter of 2020, compared to 13.6% in the third quarter of 2019, primarily due to discrete items for the quarter. Shifting now to cash flow and the balance. Regeneron continues to maintain a strong balance sheet, ending the quarter with cash and marketable securities of $5.9 billion. However, our third quarter free cash flow was negatively impacted by the extension of ILEA payment terms to support physician offices during COVID. We expect this will reverse in 2021 as payment terms return to normal. Additionally, in the quarter, we issued $2 billion of long-term debt, leveraging historically low interest rates while decreasing our cost of capital.

I disease, not either receiving a diagnosis or coming in for treatment, but we're starting to see recovery and that I'm pleased to report that on the split of use valley by indication, we are approaching 60% for web M D, which means over 40 person.

Robert E. Landry: With the issuance of this debt, we expect to incur approximately $45 million of incremental interest expense on an annual basis. Finally, we repurchased $100 million of stock in the third quarter as part of our billion-dollar board-authorized share buyback program. Now I'd like to spend a few moments providing updates to our full year 2020 guidance. We updated our guidance on several expense line items, where in many cases we either lowered or narrowed guidance. Please refer to our press release for our entire updated 2020 guide. Specific to R&D, we are revising upward our forecasted 2020 non-GAAP R&D expense to be in the range of $2.42 to $2.47 billion. While we increased R&D guidance on our second call to reflect Regen-COV-2 expenses, we have since substantially expanded the scope and enrollment targets across the Regen-COV-2 clinical program, which will result in increased expenses in the fourth quarter and into the first half of 2021.

None of our business is coming from other indications inclusive of a diabetic guy disease. So unbalanced, we continue to see diabetic eye disease, as our largest future opportunity going forward, but we are the market, leading anti veg of therapy across all indications.

Thank you.

Next question. Please your.

Your next question comes from urine Werber with Cowan.

Yeah, Hi, good morning, just a quick follow up I'm I'm, a regeneron cold to the ongoing studies, Georgia spill across all patients Macho seronegative, you're clearly saw activity into your negative maybe sort of and for you both of their single I'm combo really didn't see the same data so any any.

Explaination to that and why are you still sort of doing studies across all patients. Thank you.

Yeah, I'm not sure what you mean by Lily didn't see the same thing they didn't actually look for where they are effect was uhm and and right now the way. The the program works as we are not having any evidence of any on toward effect and maybe just a very small bed.

Robert E. Landry: Also, while we are not providing 2021 guidance today, we do expect that 2021 full-year R&D expenses will increase to fund an advancing and expanding pipeline, as well as early-stage partnership. In conclusion, Regeneron's business remains healthy, and we continue to deliver strong year-over-year growth as we diversify our revenue and earnings and advance our robust pipeline. We remain well-positioned for future growth with healthy core brands and multiple near-term launches while investing in our R&D engine to drive longer-term growth. With that, I'd like to turn the call back to Justin.

Fit in the seropositive patients who have their own antibody I think that if one could actually do point of care testing, which is unfortunately at this moment not immediately available in in most cases once the drug might be available, let's say underneath the way you might want a limited to patient.

It's based on those characteristics, however, because the benefit risk does not.

Have any evidence of a negative untoward effects to know and those individuals one could just treat the entire population even though the benefit is mostly driven by those who as we described are seronegative have higher viral loads and or have high risk factors.

Okay. Just so just ample fine with George said your own as an M. P said it Alex I just think of what it's worth repeating that we did see in effect in the overall population is just as you said that effect was driven by the people who need to be anybody in that they have an amount it's their own immune response that observation.

Robert E. Landry: Thank you, Bob. Deborah, that concludes our prepared remarks. We'd now like to open the call for Q&A. We have more than 20 callers in the queue, so to ensure that we are able to address as many callers as possible, we will answer one question from each caller before moving on. Please go ahead, Deborah. And guys, if you'd like to ask a question, please press star 1. And we'll go with our first question. We have got Carter Gould with Barclays.

Which is something that the team predicted which is that people who mounted around noon response wouldn't benefit so much from giving me more of an antibody makes perfect sense and those that had an amount that their own immune response with benefits much more also makes perfect sense and that's exactly what they saw and you even see it in the in the placebo treated.

Carter Gould: Good morning guys. Thanks for taking the question. I guess for George and Len, clearly a lot of enthusiasm around the potential for CoStems as we look at some of those readouts. 2021.

George D. Yancopoulos: Are we going to have a clear signal if these are? Thank you very much. Well, it all depends on, as you said, these dose escalation studies, how they progress and proceed. We certainly hope that we will be getting signals of efficacy sooner rather than later, but it all depends on clinical development and how that all goes. But we remain incredibly enthusiastic and excited about this class, and we're investing enormously, as I said. We have pairs of CD3 and CD28 bispecifics for numerous different cancers, not only the ones that are already in the clinic, but ones that will be entering the pipeline over the next year or two or three. So we're very excited about this class and the potential of combining them with the two sets of bispecifics as well as with PD-1.

George D. Yancopoulos: Next question, please. And your next question comes from Chris Reitman with Piper Sandler. Hey, thank you. Just on Regeneron CoV-2, I was wondering if you could walk through the biology behind why there would be a safety signal in these vented or high-flow oxygenated patients? I mean, I guess, especially given how clean it looked in mild to moderate cases, is there some threshold of viral load, or is it underlying overactivation of the immune system that's driving this problem, and can you maybe describe the age?

Christopher Thomas Schott: So George can give us a few anecdotes. First of all, we should point out that we remain blinded to what's going on in those two cohorts that were paused. They weren't halted.

George D. Yancopoulos: They were paused so that the IDMC could evaluate the ongoing patient and then decide what to do going forward. However, we do not know whether there really is any safety signal. And as you said, I think theoretically there is not really a great deal of rationale why there might be a safety signal there. You could come up with all sorts of complicated scenarios to explain it. But until we're unblinded to the data, until we really get to look at it, at this point, it could simply be that there's a lack of efficacy or maybe even early trends which will reverse. So, as you said, theoretically, it does not make a great deal of sense. I think the whole concept of what they call AD or Antibody Dependent Enhancement is something that does not look like it's really playing a role in this disease. So we remain hopeful that there isn't going to be a safety signal and, eventually, at least in some subset of these patients, even the hospitalized patients, we may provide a benefit. The next question comes from Evan Seigerman with Credit Suisse. Hi guys, thank you so much for taking the questions, and I'll limit it to one.

The limited at this point is because.

There's going to be limitations for the amount of doses available to treat.

Yes, let me just also add to that Jeff.

Two things first of all as.

As I think George pointed out in his presentation. When we first disclosed this data.

This is a very high correlation between the baseline viral load and whether or not you have antibodies. There. It's on average was three logs higher if you don't have antibodies and viral load. So you could use viral load and everybody is going to get treated has the viral load test they have a PCR test it's reported as back as positive but this.

Evan Seigerman: So in the 10Q, you listed the EUA for the AV cocktail during this quarter. Is this official guidance from the FDA, and any ideas as to what patient population this EUA would be granted for? So it's like we've said that we have focused on the patient population where the data comes from, which is outpatient, who have the best.

Leonard S. Schleifer: Based on characteristics that would make us think that they would benefit the most, whether that's risk factors or high viral titer, and eventually, perhaps low antibody. Those are the sorts of patients we're focused on as an outpatient. There is no PDUFA timeline for the EUA.

Leonard S. Schleifer: We expect action in the relatively near future, but there's no guarantee that it will come. The FDA is doing a very careful analysis. We can tell from the kinds of questions we're getting, and we hope that it will reach a successful conclusion, but we don't know the timeline because there are no specifics. We do know they're working just about as hard as we can imagine and have ever seen the FDA work. So we're hopeful soon we'll get an, " Great, thank you so much.

Operator: Next question, please. Your next question comes from Yatin Sunjay with Duganheim Partners. Hi, thank you for taking my question. The question is on ILEA, obviously a very solid quarter.

Question I have plenty more co two but given the number of already had their I'll change the subject Wanna ask Bob about the R&D spend and and really thinking about trends going forward. So in terms of the investment you're making an antibody cocktail how do you how long do you expect this to kind of persist for it and it just kind of overall wonder if you get a give us any sneak peek and do <unk>.

Marion McCourt: Can you maybe just give us some sense on... Relative Contribution from AMD vs. Other Indications, [inaudible] So far, you're up to three. Marion can handle the first one.

2021, thank you.

Sure. Thanks Corie.

Let me see if I can give you a little bit of color. So as I said in our prepared remarks, you know we're not gonna provide 2021 R&D guidance today, we do expect that next year's R&D expenses will be higher to support pretty much everything that George said with regards to the expanding pipeline early stage assets you know the partnerships with <unk> and Telia, which are are.

Marion McCourt: I'll do, I will do my best. And, you know, first, let me comment that... In times of pandemic, there probably was more of an impact on patients with diabetic eye disease, not either receiving a diagnosis or coming in for treatment, but we're starting to see recovery in that. I'm pleased to report that on the split of use of ILEA by indication, we are approaching 60% for wet AMD, which means over 40% of our business is coming from other indications, including diabetic eye disease. So on balance, we continue to see diabetic eye disease as our largest future opportunity going forward, but we are the market-leading anti-VEGF therapy across all indications. Next question, please. Your next question comes from Yaron Werber with Cowen. Yeah, hi, good morning.

Yaron Werber: Just a quick follow-up on the Regeneron CoV-2. The ongoing studies, George, are still across all patients, not just seronegatives. You clearly saw activity in seronegatives. Lilly sort of, obviously, both with her single and combo, really didn't see the same data.

George D. Yancopoulos: So any explanation for that and why you still sort of doing studies across all patients? Thank you. Yeah, I'm not sure what you mean by Lilly didn't see the same thing. They didn't actually look for where their effect was.

Leonard S. Schleifer: And right now, the way the program works is that we are not having any evidence of any untoward effect and maybe just a very small benefit in seropositive patients who have their own antibodies. I think that if one could actually do point-of-care testing, which is unfortunately at this moment not immediately available in most cases, the drug might be available, let's say, under an EUA. You might want to limit it to patients based on those characteristics. However, because the benefit risk does not have any evidence of negative untoward effects in those individuals, one could just treat the entire population, even though the benefit is mostly driven by those who, as we described, are seronegative, have higher viral loads, or have high risk factors.

Or that this is a cure or rather than just reducing it.

The viral load and reducing time to recover in some patients. Thank you.

Right George can sorry.

I was going to say George can.

Deal with that I was going to say just the deal quickly with the manufacturing question, which is we are scaling up and we expect to be able to make substantially more next year than we were able to make this year.

Obviously, we'll have a full year of manufacturing, which we didnt we.

We did not have a full year of manufacturing to deliver the 300000 doses and we expect to have more of facilities that are now operational and dedicated plus we expect to multiply that with our partner Roche, who really it's been a terrific partner, so far and pay as you know because we.

See we see there might because we compete with them in many fronts, they really sophisticated in the biologics space.

Leonard S. Schleifer: So just to amplify what George said, Yaronis, and he said it, I just think it's worth repeating, that we did see an effect in the overall population. It's just as he said, that effect was driven by those who needed the antibody because they hadn't mounted their own immune response. That observation... Something that the team predicted, which is that people who mount their own immune responses wouldn't benefit so much from being given more of an antibody. Makes perfect sense. And those that hadn't mounted their own immune response would benefit much more. It also makes perfect sense. And that's exactly what they saw.

With the genetic history, and the manufacturing capacity and they are working very hard to bring online.

Very enhanced and large manufacturing capacity I'll, let George to deal with the question about combination therapy.

Yeah, I think the most important thing to note is because the mechanism of action.

Artery in is just an antibody that is essentially analogous to the endogenous antibodies it into many of the individuals or making a as I described we're just providing it to those people who are either slow or failing to make their own antibodies. There's no expectation to know mechanistic rationale for it.

Any safety interactions of concern there should not be any reason why you couldn't mixes with essentially any drug that doesn't have an toward side effects. Because all we're doing is giving you more of the antibodies that your body normally makes.

Leonard S. Schleifer: And you even see it in placebo-treated patients, that if you don't have antibodies, you start with a very high viral load, and if you do have antibodies, you're already three logs lower. So all of the biology that George and his team predicted and described was borne out in a very exciting way. So I think it's just a matter of where you see the effect being driven by, not whether or not you can treat an entire patient. And I'm sure, by the way, if Lilly did the same detailed analysis, they would see that their benefit would also be driven by the same sets of patients. They just didn't do those analyses.

So that said that you could theoretically combined our treatment with any other treatment without any reason to believe that there would be negative interactions I remind you that right now where our data stands and where we are we have filed for the way is in the outpatient setting where these other modalities.

Our not being given at this point, so it's going to take future studies plus analyses in the hospitalized patients.

Where you look at patients who had combination therapies to determine whether patients who have these combinations do better than patients, who just receive one or the other therapy alone, but in the outpatient setting right now with our data it will be our antibody because those are not patients were and desert view or dexamethasone is currently.

Operator: Next question, please. The next question comes from Jeffrey Pogues with SVB Learning. Hi, just a follow-up question on COVID-2. I'm just not sure how this is going to work. We can't even execute tests.

A standard of care.

Great. Thank you. Our next question. Please next question Olivia young with Kantar.

[noise] [noise], it's important to be given what you guys talk a little bit about the potential growth opportunity you see there obviously you've had incredible launch so far but you've gone deeper into commercial marketing and DTC and I just kind of want to think about you know how do you drive deeper penetration into biologic about biologic market.

Jeffrey Pogues: Reliably. So how are you going to screen the individuals who aren't mounting an immune response on an outpatient basis and then initiate treatment on our It's just confusing, so help us understand that, and would it be sensible to treat everybody going to the hospital with elective procedures of any kind or something else along those lines?

Both an 80 and also I'm, sorry, as well thanks.

Certainly and I'm happy to comment and today, certainly we reported asked incentive fee very strong results for depiction doesn't the U.S. and ex us markets.

The really important thing to keep in mind is while we've made certainly inroads in helping each topic dermatitis patients and patients with respiratory conditions of asthma and nasal polyps theres still are in all those indications that are currently approved not to mention the future indications a lot of incremental unmet need.

George D. Yancopoulos: It's just a little confusing how you're going to, I think what, as we just said and as Len amplified on, the effect is seen in the overall population. It's just driven by those individuals who have the characteristics that we describe. The notion is that, just as in clinical studies, it could be given to all of the eligible trial patients because there is no risk to individuals who won't benefit the most. So I think that the strategy that, of course, I think would be taken would be to limit the drug right now without doing any of the advanced screening and so forth, but for the people who are at the highest risk of progressing to needing medical attention, give it to those people, regardless if you don't have the point of care testing, regardless of their baseline viral load or their antibody status.

Great and then beyond that to your point of our strategies and promotional platform and activities to advance the market Dupixent has been very responsive to promotion on Weve been seen certainly uptick in new initiation and also a remarkable.

Consistency of patients staying on therapy because of the results that they are receiving either in their skin to dish condition or the respiratory condition. So we'll continue to do that we're looking at a lot of different mechanisms for advancing our promotional platform. We have highly effective field teams in the marketplace. We also benefit from very small.

George D. Yancopoulos: In the future, if such testing became available, then you might not want to waste the drug on people who might not benefit. But initially, I think it'd be given to the people who are at the highest risk of developing complications with the goal of preventing those, as we showed in the study. The NNT goes down, but the only reason really to limit it at this point is because...

Long reimbursement across indications and across age groups and certainly we'll continue to advance and all the inline indications. We currently have and will be very very well prepared for our future indications as well.

Thanks, Mary next question please.

And your next question comes from Ronny Gal with Bernstein.

Congratulations on the on the very nice quarter.

My question is actually on the I.E. Lee Santas.

Santas dynamics are you showing a 10% revenue growth they've shown at 5% revenue decline year over year. So obviously capturing share, but I was wondering about the new patient volume if you can.

Leonard S. Schleifer: There will be limitations for the amount of doses available to treat. Yeah, let me just add to that, Jeff, two things. First of all, as I think George pointed out in his presentation when we first disclosed this data, there's a very high correlation between the baseline viral load and whether or not you have antibodies. It's on average, you're three logs higher if you don't have antibodies in your viral load.

Just to share with us if you could kind of like where are we in terms of patient new patient starts versus a year ago and and how far do we have to go before we come back to line and anything you can share about pricing terms. It seemed to be use commented. This in the in the press release, if you can give us a bit more there.

Yes, and in terms of performance aligned Leah and the anti VEGF category as I mentioned, we are seeing on a rebound in terms of patient treatments coming back into offices, we see in advance and Allianz performance versus a year ago, and then coupled with that we are seeing an increase.

Leonard S. Schleifer: So you could use viral load, and everybody who's gonna get treated has a viral load. [inaudible] The second thing is our partner Roche is probably the leading company for testing. They have a platform for antibodies that can test hundreds of millions of people per quarter, and it's deployed in, I think, and Dr. David Snow. I think there are lots of ways to get at this.

I meant in share gain from both branded and unbranded competitors and I also mentioned if I just put it into volume terms for you in the branded marketplaces Aliyah now approaches our is just over in fact, 70% of the branded market in the quarter by volumes. So we.

Leonard S. Schleifer: You can treat everybody, obviously limited to the people who have risk factors. Or you can start to narrow it down to people who have a high viral load and a low cycle time. Or eventually, with our partners' capabilities, people who are at the point of care have no antibodies. So I think there is a lot of flexibility. It is just that we do not have all this buttoned down in this emergency room.

We're seeing robust performance and we would attribute that to I believe is overall value proposition for retina specialists in choosing anti VEGF therapy. The certainly the clinical profile efficacy profile flexibility of dosing now the prefilled syringe is incredibly timely as a convenience, but also in the current environment.

Office throughput and efficiency and then beyond that on the established safety.

Operator, we have time for two very quick questions. If we could try to squeeze them in.

George D. Yancopoulos: And it will probably evolve fairly quickly if we get an EUA. Thank you. Thank you. Thank you. Just to simplify, initially, we believe it will be used in the overall population based on risk factors without regard to serology or viral load. And, as Len said, eventually, as these approaches evolve and change, they may allow targeting of the drug to those who might even benefit the most.

Your next question comes from but ran a man with Jefferies.

Hi, guys. Thanks for taking my questions can you just talk about the competitive landscape in retina, what's your thoughts on for some given we've now they're going to have phase three data relatively soon.

So as I think we've all learned a lot about Oh, sorry, let you go first I'll come back if you like Oh go ahead, Matt.

No I was just going to come in that I think that into the first.

For a product entering the marketplace today, it's not assumed any more that a safety profile will be there until the product has no actual market experience. So I just had mentioned at the start we always monitor competition. There is very carefully both in market currently and future competition, but.

Operator: Yeah, thanks guys. Your next question comes from Corey Casimo with JPMorgan. Hey, good morning, guys.

Corey Casimo: Thanks for taking the question. I have plenty more in code, too, but given the number we've already had there, I'll change the subject. I want to ask Bob about the R&D spend and really think about trends going forward. So in terms of the investment you're making in the antibody cocktail, how long do you expect this to kind of persist? And kind of overall, I wonder if you could give us any sneak peeks into 2021.

Liolios sets, a very high bar in terms of the clinical profile the safety profile and the level of experience, but then over to you.

No I think you covered it that's going to next question the last question.

Your final question comes from parents Flynn with Goldman Sachs.

Hi, This is Dan on for parents that thanks for taking my question just for the Phase two trial of your Bcm, a bi specific antibody I just wondering if you could share any more details on the trial and if you're working to develop the subcu formulation. Thanks.

Robert E. Landry: Thank you. Sure. Thanks, Corey. Let me see if I can give you a little bit of color.

Robert E. Landry: So, as I said in our prepared remarks, you know, we're not gonna provide 2021 R&D guidance today. But we do expect that next year's R&D expenses will be higher to support pretty much everything that George and Ted with regard to the expanding pipeline early stage assets, the partnerships with El Nile and Intelia, which are really starting to blossom, and certainly our ongoing COVID-19 efforts. If you look at 2020, you know, where we sit right now, we anticipate spending approximately $400 million on our efforts against COVID. 19 within the year of 2020.

Yeah, I think that.

No right now, we'll you'll get updates on the BDC may program at Ash or will you have announced that we're going to be entering into a pivotal program very soon and I guess, it's fair to say that it makes sense that we would be developing yes, a subcutaneous formulation.

Great.

Thanks to everyone for joining todays call. We appreciate you dialing in knowing that many other companies are reporting today. So thank you for your attention for your questions, Bob Landry and the IR team will be available for additional questions and called as needed today. Thank you everyone be safe.

This does conclude today's conference call. Thank you for your participation you may now disconnect.

Robert E. Landry: So if you back that spend out from our full year of 2020 non-GAAP R&D guidance midpoint, our underlying growth rate in R&D spend, excluding the COVID program efforts, is trending about 15% higher than our 2019, is our, as we move forward. You know, Corey, I would use that kind of as a stake in the ground.

[music].

Robert E. Landry: In terms of where we're going to go, I mean, certainly our COVID-19 spending is going to continue. You know, people can see on clintrials.gov the extent of the programs that we have, and trials that we have going, that will play a factor into 2021. That's helpful.

Robyn Kay Shelton Karnauskas: Your next question comes from Robyn Karnauskas with Truist. Hi guys, thanks for taking my question. Another one on COV-2.

George D. Yancopoulos: So just because it seems like this pandemic is just getting worse in the United States and globally, can you talk about your efforts to expand manufacturing next year beyond the 300,000? And then I was just curious, given how high profile it was that the President and others got a combination, different combination therapies, can you biologically talk about your thoughts on, you know, should this drug be combined with X or other drugs immediately up front biologically? And when would you start, like, maybe a combo trial that would sort of evaluate that and sort of really make sure that this is a cure rather than just reducing the viral load and reducing time to recover in some patients? Thank you. All right, George can do it, sorry.

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George D. Yancopoulos: I was going to say George can deal with that; I was going to deal quickly with the manufacturing, which is, we are scaling up, and we expect to be able to make substantially more next year than we were able to make this year. Obviously, we'll have a full year of manufacturing, which we did not have a full year of manufacturing to deliver the 300,000 doses, and we expect to have more facilities that are now operational and dedicated. Plus, we expect to multiply that with our partner, Roche, who really has been a terrific partner so far. And they, as you know, because we see their might because we compete with them on many fronts, they're really sophisticated in the biological space with their genetic history and their manufacturing capacity, and they're working very hard to bring very enhanced and large manufacturing capacity online.

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George D. Yancopoulos: I'll let George deal with the question about combination therapy. But I think the most important thing to note is because the mechanism of action, our treatment is just an antibody that is essentially analogous to the endogenous antibodies that many individuals are making, as I described, we're just providing it to those people who are either slow or failing to make their own antibodies. There is no expectation and no mechanistic rationale for any safety interactions of concern.

George D. Yancopoulos: There should be no reason why you couldn't mix this with essentially any drug that doesn't have any untoward side effects because all we're doing is giving you more of the antibodies that your body normally makes. So that said, you could theoretically combine our treatment with any other treatment without any reason to believe that there would be negative interactions. I remind you that right now, where our data stands, and where we have filed for the EUA, our treatment is in the outpatient setting, where these other modalities are not being given at this point. So it's going to take future studies plus analyses in hospitalized patients where you look at patients who've had combination therapies to determine whether patients who have these combinations do better than patients who just receive one or the other therapy alone. So in the outpatient setting right now, with our data, it'll be our antibody because those are not patients where remdesivir or dexamethasone is currently a standard of care.

Operator: Great. Thank you. Next question, please. Alethia Young with Kantor. And I'll see you next time.

Alethia Young: I just want you guys to talk a little bit about the... Growth Opportunity, you see there, obviously, you've had an incredible launch so far, but you've gone, How Do You Drive Deeper Penetration into Violent... Certainly. I'm happy to comment.

Marion McCourt: Today, certainly, we reported, as did Sanofi, very strong results for depiction both in the U.S. and ex-U.S. markets. The really important thing to keep in mind as well is that we've made significant inroads in helping atopic dermatitis patients and patients with respiratory conditions of asthma and nasal polyps. There still is, in all those indications that are currently approved, not to mention the future indications, a lot of incremental unmet need.

Marion McCourt: And then beyond that, to your point about strategies and promotional platforms and activities to advance the market, Dupixent has been very responsive to promotion. We've been seeing, you know, certainly an uptick in new initiations and also a remarkable consistency of patients staying on therapy because of the results that they're receiving either in their skin condition or their respiratory condition. So, we'll continue to do that. We're looking at a lot of different mechanisms for advancing our promotional platform. We have highly effective field teams in the marketplace. We also benefit from very strong reimbursement across indications and across age groups. And certainly, we'll continue to advance on all the inline indications we currently have, and we'll be very, very well prepared for our future indications as well. Thanks, Mary.

Operator: Next question. And your next question comes from Ronnie Gao with Bernstein. Congratulations on the very nice quarter. My question is actually about the IALEA-Lucentis dynamics.

Ronnie Gao: You've shown a 10% revenue growth. They've shown a 5% revenue decline year over year. So obviously, they are capturing share, but I was wondering about the new patient volume. If you can just share with us, if you could, kind of like where we are in terms of new patient starts versus a year ago, and how far do we have to go before we come back to line? And anything you can share about pricing terms, you've commented on this in the press release, if you can give us a bit more. In terms of performance of Aliyah in the anti-VEGF category, as I mentioned, we are seeing a rebound in terms of patient treatment coming back into offices. We see an advance in Aliyah's performance versus a year ago, and then coupled with that, we are seeing an increment in share gain from both branded and unbranded competitors.

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Ronnie Gao: I also mentioned, if I just put it into volume terms for you, in the branded marketplace, Aliyah now approaches just over, in fact, 70 percent of the branded market in the quarter by volume. We are seeing robust performance, and we would attribute that to Aliyah's overall value proposition for retina specialists in choosing anti-VEGF therapy, certainly the clinical profile, efficacy profile, and flexibility of dosing. Now the prefilled syringe is incredibly timely as a convenience, but also in the current environment of office throughput and efficiency, and then beyond that, established safety.

Operator: Operator, we have time for two very quick questions if we could try to squeeze them in. Your next question comes from Buren, a man with Jeffrey. Yeah, hi guys, thanks for taking my questions. Can you just talk about the competitive landscape and retinal with your thoughts on Furusimab given we've, you know, they're going to have phase three data relatively soon? Sure, so I think we all learned a lot about... Oh, sorry Len, you go first; I'll come back if you like. No, no, go ahead.

Tyler Van Buren: Now I was just going to comment that for a product entering the marketplace today, it's not assumed anymore that a safety profile will be there until the product has actual market experience. So I just would mention at the start, we always monitor competition very, very carefully, both in the market currently and future competition. But certainly, ILIA sets a very high bar in terms of the clinical profile, the safety profile, and the level of experience.

Marion McCourt: But Len, over to you. No, I think you covered the question in the last one. And your final question comes from Terence Flynn with Goldman Sachs. Hi, this is Dan on behalf of Terence. Thanks for taking our question. Just for the phase two trial of your BCMA by specific antibody, just wondering if you could share any more details on the trial and if you're working to develop a sub-Q formulation.

Terence C. Flynn: Thanks. Yeah, I think that right now we'll give you updates on the BCMA program at ASH. We have announced that we're going to be entering into a pivotal program very soon, and I guess it's fair to say that it makes sense that we would be developing, yes, a subcutaneous formulation.

George D. Yancopoulos: Thanks to everyone for joining today's call. We appreciate you dialing in, knowing that many other companies are reporting today. So thank you for your attention and for your questions. Bob Landry and the IR team will be available for additional questions and calls as needed today.

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Operator: Thank you, everyone. Be safe. This does conclude today's conference call. Thank you for your participation. You may now disconnect.

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