Q4 2020 Regeneron Pharmaceuticals Inc Earnings Call

Okay.

Operator: Welcome to the Regeneron Pharmaceuticals fourth quarter 2020 earnings conference call. My name is Michelle, and I'll 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. Please note that this conference is being recorded. I will now turn the call over to Justin Holko, Vice President, Investor Relations. You may begin.

Welcome to the Regeneron Pharmaceuticals fourth quarter 2020 earnings Conference call. My name is Michelle and I'll 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. Please note that this conference is being recorded I would now turn the call over to Justin <unk>, Vice President Investor Relations you may begin.

Justin Holko: Thank you, Michelle. Good morning, good afternoon, and good evening to everyone listening to the call today. Thank you for your interest in Regeneron Pharmaceuticals and welcome to the fourth quarter 2020 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, Co-Founder, President, and Chief Scientific Officer; Marion McCourt, Executive Vice President and Head of Commercial; and Bob Landry, Executive Vice President and Chief Financial Officer.

Thank you Michele good morning, good afternoon, and good evening to everyone listening to the call today. Thank you for your interest in Regeneron Pharmaceuticals, and welcome to the fourth quarter 2020 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 you accomplish cofounder, President and Chief Scientific Officer, Marion Mccourt Executive Vice President and head of commercial Bob Landry Executive Vice President and Chief Financial Officer. After our prepared remarks, we will open the call for Q&A.

Justin Holko: After our prepared remarks, we will open the call for Q&A. I would 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, and regulatory matters.

I'd 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.

Justin Holko: Payor Coverage and Reimbursement Issues, Intellectual Property, and Pending Litigation

Payer coverage and reimbursement issues intellectual property pending litigation and 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 a more complete.

Justin Holko: Other Proceedings and Competition

Justin Holko: 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.

Justin Holko: 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-K for the year ended December 31, 2020, which we are planning to file with the SEC on Monday. 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-gap 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.

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-K for the year ended December 31st 2020, which we're planning to file with the SEC on Monday.

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 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 on our website. Once our call concludes Bob Landry and the Investor Relations team will be available to answer further questions with that let me turn the call over.

Len Schleifer: Once our call concludes, Bob Landry and the Investor Relations 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.

Two our president and Chief Executive Officer, Dr. Len Schleifer.

Len Schleifer: Thank you, Justin, and thanks to everyone joining on today's call. 2020 was

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

'twenty 'twenty was a devastating year for so many individuals and their families who succumbed to COVID-19.

Len Schleifer: 2020 was a devastating year for so many individuals. Regeneron, we have done all we can to be part of the solution. Spend quite a bit of time today.

At Regeneron, we have done all we can to be part of the solution and we'll spend quite a bit of time today trying to inform you of our efforts.

Len Schleifer: More General, despite operating, Regeneron delivered strong commercial and financial results while advancing our innovative R&D pipeline in joining the fight against COVID-19. SPRITE COVID, We have never lost sight of our focus on the patients who count on us for Innovative Medicines and Novelties. For the full year 2020, we grew the top line by 30% and the bottom line by 28%. In fact, more than 80% of our top-line growth came from products and revenue. ILEA's global net sales were nearly $8 billion.

On a more general note for the company EBIT.

<unk> operating in unprecedented circumstances of a global pandemic Regeneron delivered strong commercial and financial results, while advancing our innovative R&D pipeline and joining the fight against COVID-19.

Despite COVID-19, we never lost sight of our focus on the patients who count on us for innovative medicines and novel medical breakthroughs.

For the full year 2020, we grew the top line by 30% and the bottom line by 28% with an increasingly diversified set of revenue and earning streams in fact more than 80% of our topline growth came from products and revenues other than eylea.

Eylea Global net sales were nearly $8 billion and grew 5% compared to the prior year.

Len Schleifer: 5% compared to the prior year. The U.S. sales were close to $5 billion and grew, rebounding strongly from April lows due to COVID-19, and outperformed the broader anti-VEGF category. ILEA's efficacy, safety, and convenience creates a high bar for current and potential future durability for years to come. Next, our growth was also fueled by DuPic, which sold more than $4 billion

In the U S sales were close to $5 billion and grew 7% versus the prior year rebounding strongly from April lows due to COVID-19, and outperforming the broader anti VEGF category.

Lee is efficacy safety and convenience creates a high bar for current and potential future entries, leaving us confident and it's true ability for years to come.

Next our growth was also fueled by depicts it which sold more than $4 billion globally and grew 75% compared to the prior year.

Len Schleifer: 75% compared to the prior, The U.S. alone, a million prescriptions for Dupixent. Only 6% of eligible U.S. patients have been treated with Dupixent to date, leaving much more room. Regulatory Approvals in Atopic Dermatitis, as well as chronic rhinosinusitis, nasal polyposis, and the Late Stage Development. And of course, eight additional, The PIXEN has the

In the U S alone more than a million prescriptions to depiction well written.

Only 6% of eligible U S patients have been treated with two pixel to date, leaving.

Leaving much more room to grow.

With regulatory approvals in atopic dermatitis, asthma, and chronic rhinosinusitis with nasal polyposis and a late stage development program of course, eight additional disease types, two picks and has the potential to transform the treatment of type two inflammatory diseases.

Len Schleifer: Type 2 Inflammatory Disease, and Oncology. We are pleased that Libtyra remains the number one treatment for cutaneous squamous cell carcinoma. In 2020, global net sales were approximately $348 million.

In oncology, we are pleased that lip tire remains the number one treatment in cutaneous squamous cell carcinoma.

In 2020 global net sales were approximately $348 million representing growth of 80% and further market penetration in the U S and from launches around the world.

Len Schleifer: Further market penetration in the U.S. and launches around the world. Beyond LibTiO, we are emerging as a leader in the development of novel bi..., and other antibody. We now have 12 oncology antibodies in clinical development. Our ability to create a variety of rational combinations, with lots of sweet antibiotic technology, positions us well to unlock the next wave of innovation.

Tayo, we are emerging as a leader in the development of novel Bi specific and other antibody treatments. We now have 12 oncology antibodies in clinical development, our ability to create a variety of rational combinations using a but lots of sweet antibody technologies positions us well to unlock the next one.

Dave of innovation in immuno oncology.

Len Schleifer: Regeneron Pharmaceuticals Inc., Regeneron also makes strides, the FDA approval of its Monoclonal Antibody for Ebola Virus Infection, But nowhere has the power of our... research been more evident than in the discovery and development of our novel antibody cocktail against COVID-19 known as Regeneron in just 10 months. We went from program inception to clinically demonstrating profound antiviral activity, as well as a reduction of medical visits, to receiving an emergency use authorization for GenCov in the United States.

Regeneron also made strides against infectious diseases in 'twenty 'twenty with the FDA approval of in Missouri.

A monoclonal antibody cocktail and the first ever treatment for Ebola virus infection.

But nowhere has the power of R&D teams and technology has been more evident than in the discovery and development of our novel antibody cocktail against COVID-19, Don is Regeneron Cove in just 10 months, we went from program inception to clinically demonstrating profound anti viral activity.

As well as reduction of medical visits.

To receiving an emergency use authorization food Gen COVID-19 in the United States.

Len Schleifer: Most recently, we showed promising data that suggests Regen- reduces transmission of the virus and prevents infections in patients at high risk of contracting. Importantly, we announced a new supply agreement with the U.S. Government to issue 1.25 million treatment doses for up to $1.6 billion.

Most recently, we showed promising data that suggest Virgin Cove reduces transmission of the virus and prevents infections in patients at high risk of contracting the virus.

Importantly, we announced a new supply new supply agreement with the United States government for an additional 1.25 million treatment doses for up to $2 $6 billion.

Len Schleifer: Finally, we secured a strategic partnership with Roche to manufacture and commercialize Regencove Global. These achievements would not have been possible without..., and our scientific team is a continual source of. Regeneron also completed shareholder-friendly actions, In restructuring our prior agreement with San and Achieving Profitability for the Brand in the United States. We also executed the largest ever US health care deal, Sanofi State leveraged a strong balance sheet, historically low interest rates, and we repurchased $5 billion of those shares. We're entering 2021 with strong momentum across our entire business.

Finally, we secured a strategic partnership with Roche to manufacture and commercialize Virgin Cove globally.

These achievements would not have been possible without the decades of investment in our innovative antibody related technologies and our scientific talent, who are a continual source of pride.

Regeneron also completed shareholder friendly actions in 2020, including restructuring our Praluent agreement with Santa Fe, and achieving profitability for the brand in the United States.

We also executed the largest ever United States Health care equity offering with Santa Fe stake in our company, we leveraged our strong balance sheet and historically low interest rates to repurchase $5 billion of those shares immediately reducing uncertainty and creating significant accretion for our share.

Yes.

We are entering 'twenty 'twenty, one with strong momentum across our entire business.

Len Schleifer: I expect a number of exciting..., launches for philiptio in lung cancer and Bayes Pick some data readouts and line, milestones for other products that will further the University of Sales & Earnings. We are encouraged by the progress we are making against COVID and expect several near-term data readouts for our antibody cocktail that George... Importantly, our pipeline continues to grow. Corp Business Momentum, New Launches, and R&D Advanced, Physicians Regenerate, and others who will deliver significant and sustained growth for years to come. Thank you, Len.

We expect a number of exciting catalysts this year, including a series of important launches Philip Tayo in lung cancer and basal cell, Kansas, two picks and data readouts and lunches and milestones for other products that will further enhance our diversity of sales and earnings and positioning us for sustained financial growth.

We are encouraged by the progress we are making against COVID-19, and expect several near term data readouts for our antibody cocktail that George will outline momentarily.

Importantly, our pipeline continues to grow and advance across a wide variety of diseases.

Our core business momentum, new launches and R&D advances positions regeneron to deliver significant and sustained growth for years to come.

Now I'll turn the podium over to George.

George D. Yancopoulos: While the world is still in the throes of the COVID-19 pandemic, I will start with our efforts on Regen-CoV, or any cocktail targeting the SARS-CoV-2 virus. Over the last few months, we have achieved several important milestones. On November 21, our antibody cocktail received FDA emergency use authorization for recently diagnosed mild to moderate COVID-19 in high-risk patients. The EUA was granted based on the initial results in patients from our large study in the non-hospitalized setting. In December, we announced encouraging initial regen co-results in hospitalized patients on low-flow oxygen.

Thank you Lynn.

Well the world with the world's still in the throes of the COVID-19 pandemic I will start with our efforts on region coal or anybody cocktail targeting the Sars COVID-19 two virus.

Over the last few months, we have achieved several important milestones.

Remember twenty-first or antibody cocktail received FDA emergency use authorization, who recently diagnosed mild to moderate COVID-19 in high risk patients.

<unk> was granted based on the initial results from patients from our large study in the non hospitalized setting.

In December we announced encouraging initial region co results in hospitalized patients on low flow oxygen.

George D. Yancopoulos: With the cocktail treatment successfully passing futility criteria to continue, being associated with a reduction in the risk of death or mechanical ventilation. Just last month, we released initial data with RegenCov in the prevention setting, which showed 100% prevention of symptomatic COVID-19 infections and 100% reduction of the duration of high viral shedding when patients would be expected to be most infectious and capable of transmitting the virus. Importantly, these results were achieved using our lower subcutaneous dose, which should simplify delivery.

With the cocktail treatment successfully passing futility criteria to continue.

And being associated with reduction in the risk of debt where mechanical ventilation.

Just last month, we released initial data with region cope in the prevention, setting, which showed 100% prevention of symptomatic COVID-19 infections.

100% reduction of the duration of high viral shedding when patients would be expected to be most infectious and capable of transmitting the virus.

Importantly, these results were achieved using our lower subcutaneous dose, which should simplify delivery.

George D. Yancopoulos: We expect important additional readouts over the next few months in terms of confirmatory Phase III results in the prevention setting, in the outpatient setting, which will include an evaluation of our lower dose, and in the hospitalized setting as part of our collaboration with the UK Recovery Centre. These upcoming data sets are important for demonstrating efficacy across broader patient populations and supporting regulatory approvals worldwide. I want to address the important issue of emerging virus variants, which have dominated the news, as they have the potential to evade both natural as well as vaccine-derived immunity. We prospectively designed our cocktail with such variants in mind.

We expect important additional readouts over the next few months in terms of confirmatory phase III results in the prevention setting and the outpatient setting which includes an evaluation of a lower dose and then the hospitalized setting as part of our collaboration with the UK recovery study.

These upcoming datasets are important for demonstrating efficacy of course broader patient populations and supporting regulatory approvals worldwide.

I wanted to address.

The important issue of emerging virus variants, which have dominated the news is they have the potential to a day, both natural as well as vaccine derived immunity.

We prospectively designed our cocktail with such variance in mind.

George D. Yancopoulos: In fact, as we published in Science Journal back in June, we anticipated the exact mutation that is raising concerns about resistance among the South African and Brazilian variants that have now also been seen in the United States. Because of our prospective recognition of the threats of variants in our intelligent design approach, our current antibody cocktail is active against all these currently known virus variants, as was recently independently confirmed by multiple prominent academics.

In fact, as we published in Science Journal back in June we anticipated. The exact mutation that has raised some concerns about resistance for the South African and Brazilian variants that have now also been seen in the United States.

Because of our prospective recognition of the threats of variants in our intelligent design approach. Our current antibody cocktail is active against all these currently known virus variants as was recently independently confirmed by multiple prominent academics.

George D. Yancopoulos: If needed, we also have a large antibody collection that could be ready to mix and match in new cocktails against potential future viral variants. We, of course, hope that vaccines will efficiently and rapidly create widespread immunity and that this immunity will withstand the challenge of time and of emerging variants. However, even if the vaccines successfully provide widespread and long-lasting immunity according to the most optimistic timeline, it is estimated that up to hundreds of thousands of individuals may tragically die until we reach that goal.

If needed. We also have a large antibody collection that could be ready to mix and match, new cocktails against potential future vial variance.

We of course hope that vaccines will efficiently and rapidly create widespread immunity and knits immunity will withstand the challenge of time and if emerging bearings.

However, even if the vaccine successfully provide widespread and long lasting immunity. According to the most optimistic timeline.

It is estimated that up to hundreds of thousands of individuals may tragically die until we reach that point.

George D. Yancopoulos: Moreover, emerging variants are causing a very real threat to both natural and vaccine-derived immunity. Recent data indicate vaccines may already be less than 50% effective against the new variant, with new mutations having the potential to further undermine vaccine immunity. We believe strategic deployment of antibody approaches, such as our Regen-CoV antibody cocktail, could be targeted in such a way as to reduce the loss of life over the next six months, as well as to provide protection against the possibility of waning vaccine efficacy and ongoing disease prevalence.

Moreover, emerging parents are pausing, a very real threat to both natural and vaccine derived immunity recent data indicate vaccines may already be less than 50% effective against the new variance.

With me mutations have the potential to further undermined vaccine immunity.

We believe strategic deployment of antibody approaches such as our region called me antibody cocktail could be targeted in such a way.

So as to reduce the loss of life over the next six months as well as to provide protection against the possibility of waning vaccine efficacy and ongoing disease prevalence.

George D. Yancopoulos: Moving to Dupixent in our Immunology and Inflammation Portfolio. Dupixent has multiple trials and new potential indications that are progressing quickly. Most notably, our Phase III trial in eosinophilic esophagitis is now fully enrolled. Recall that we presented encouraging data from Part A of this study last year.

Moving to depicts Inc, and our immunology and inflammation portfolio.

You're pixel is a new pit is depicts inc. Has multiple trials in new potential indications that are progressing quickly most notably our phase III trial in eosinophilic Esophagitis is now fully enrolled recall that we presented encouraging data from part a of this study last year.

George D. Yancopoulos: As we outlined recently, dupixan is also part of our two-pronged approach against chronic obstructive pulmonary disease, or COPD, along with itopicumab, our anti-IL-33 antibody. The two Dupixent Phase III studies in Type II COPD are ongoing and enrolling patients. Based on our proof-of-concept Phase 2 data that will be published later this year, we believe that blocking IL-33 could be useful for treating COPD in former smokers, where we have seen a 40% reduction in exacerbations.

As we outlined recently depiction is also part of our two pronged approach against chronic obstructive pulmonary disease or COPD, along with it to pick a man.

Anti IL 33 antibody.

Two depicts and phase III studies in type two COPD are ongoing and enrolling patients.

From a proof of concept phase two data that will be published later this year, we believe that blocking IL 33, it could be useful for treating COPD in former smokers, where we have seen a 40% reduction in exacerbations.

George D. Yancopoulos: We in Sanofi have now started the first phase 3 study of itopicumab in this subset of COPD patients, with a confirmatory phase 3 study to begin imminently. Our hope for this broad program, as it depicts and depicts a man, can provide real benefit for the many patients suffering from COPD and with no biologics options to date. Dupixtin is also part of multiple additional approaches to treat allergic diseases, in particular in so-called efforts to desensitize individuals from food and inhaled allergies.

We understand that you have now started the first phase III study.

Is it to pick a mab in this subset of COPD patients with a confirmatory phase III study to begin imminently.

I've hosted this broad program. That's it depicts and had to pick a man can provide real benefit for the many patients suffering from COPD and was no biologics options to date.

Depicts there was also part of multiple additional approaches to treat allergic diseases in particular in so-called efforts to desensitize individuals from food and inhaled allergists.

George D. Yancopoulos: As you know, millions are undergoing allergy desensitization each year, often with unsatisfactory results even after years of allergy treatment. I am pleased to announce that the Phase II placebo-controlled trial of pediatric patients with peanut allergy met its primary and key secondary endpoints, showing that dupixan, in combination with Amien Therapeutics oral immunotherapy, significantly improved desensitization to peanut protein when compared to oral immunotherapy alone. These results, coupled with data later this year from a separate Phase II trial of Dupixent monotherapy in patients with peanut allergy, will inform next steps in this setting and for other forms of allergy desensitization as well.

As you know millions are undergoing allergy desensitization desensitization each year.

And with unsatisfying results, even after years of allergy treatments.

I am pleased to announce that the phase two placebo controlled trial of pediatric patients with peanut allergy met its primary and key secondary endpoint showing that depicts it in combination with immune therapeutics oral immunotherapy significantly improved desensitization to peanut protein when compared to oral immunotherapy alone.

These results coupled with day to this later this year from a separate phase two trial of depicts a monotherapy in patients with peanut allergy.

Inform next steps in this setting and for other forms of allergy desensitization is well.

George D. Yancopoulos: We also have additional groundbreaking new approaches to allergies. We have created the first antibody-based therapeutics directed to allergens themselves, with the idea that these antibodies can directly bind and neutralize the allergens. Our first two anti-allergen antibodies target cat allergy and birch allergy, with birch being the major cause of seasonal allergies in the spring. These treatments may be particularly important for patients with these and other allergies with concomitant asthma since these patients are not candidates for allergy desensitization. We will be presenting detailed data from proof-of-concept studies at upcoming meetings showing that these anti-allergen antibodies have the potential to revolutionize the treatment

We also have additional groundbreaking new approaches to allergy.

We have created the first antibody based therapeutics directed to allergens themselves with the idea that these antibodies can directly bind and neutralize the allergists are first to anti allergen antibodies target cat allergy and Birch allergy.

With birch being the major cause of seasonal allergies in the spring.

And.

The therapies may be particularly important for patients with these and other allergies with concomitant asthma. Since these patients are not candidates for allergy desensitization.

We will be presenting detailed data from proof of concept studies in upcoming meetings showing that these anti allergen antibody has the potential to revolutionize the treatment paradigm in our first phase III study in Birch algae is now open for enrollment and will be conducted throughout the allergy season with results expected later.

George D. Yancopoulos: And our first Phase III field study in birch algae is now open for enrollment and will be conducted throughout the algae season with results expected later this year. We are similarly planning a Phase III study in patients suffering from cat allergies to begin later this year. Next, I'd like to briefly discuss ILEA. We appreciate that ILEA has withstood myriad attempts to challenge its leading efficacy and safety profile over the last decade, as we have accumulated real world experience of over 30 million injections. And it is not clear that any near-term competitors have data suggesting important advantages.

This year, we are similarly planning a phase three study in patients suffering from cat allergy to begin later this year.

Next I'd like to briefly discuss Eylea.

We appreciate that Eylea has withstood myriad attempts to challenges leading efficacy and safety profile over the last decade.

As we have accumulated a real world experience of over 30 million injections.

And it is not clear that any near term competitors have data, suggesting important advantages we would like to remind you. The clinical trials have shown the substantial numbers of patients can be effectively treated at longer intervals with eylea for.

George D. Yancopoulos: We would like to remind you that clinical trials have shown that substantial numbers of patients can be effectively treated at longer intervals with ILEA. For example, the Altair study shows that about 40% of patients can be extended to a 16-week treatment interval. We are now enrolling our Phase III program with high-dose ILEA, which we hope can deliver the same efficacy and safety but allow even more patients to be treated. Moving to our oncology efforts and starting with liptyle.

For example, the Altice study shows that about 40% of patients can be extended to a 16 week treatment intervals.

We are now enrolling our phase III program with high dose Eylea, which we hope can deliver the same efficacy and safety, but allow even more patients to be extended.

Moving to our oncology efforts and starting with lip tile.

George D. Yancopoulos: In a matter of weeks, assuming positive FDA action, we expect two significant label expansions for liptyle in non-small cell lung cancer and in basal cell carcinoma. Later this year, the Independent Data Safety Monitoring Committee will be conducting interim analyses for a Leptile Chemotherapy Combination Study in Lung Cancer and for a Monotherapy Study in Second Line Cervical Cancer.

In a matter of weeks, assuming positive FDA action, we expect to significant label expansions for lip tile in non small cell lung cancer and in basal cell carcinoma.

Later this year the independent data safety monitoring committee will be conducting interim analyses for all with Tayo chemotherapy combination study in lung cancer from and from a monotherapy study in second line cervical cancer.

George D. Yancopoulos: We continue to make progress with Leptio as it is establishing itself as the leading immunotherapy for non-melanoma skin cancer, as we hope to make it a potential major new player in the lung cancer space, and as we employ it as a foundational therapy to our oncology strategy for bringing novel combinations to the many cancers that are desperate for new treatments. This combination approach has a major focus on our Bi-Specifics Portfolio as we are emerging as leaders with both our CD3 classes Bi-Specifics as well as our so-called Co-STEM Bi-Specifics.

We continue to make progress with lip tayo as it is establishing itself as the leading immunotherapy for non melanoma skin cancers.

As we hope to make it a potential major new player in the lung cancer space.

And as we employ it as a foundational.

Therapy to our oncology strategy for bringing novel combinations.

To the many cancers that are desperate for new treatments.

This combination approach is a major focus on.

On a bi specifics portfolio.

We are emerging as leaders with both our CD three classes by specifics as well as our so called co stim bi specifics. These two classes of bi specifics can be paired with each other as well as with lip time and we are exploring all these combinations and more we presented.

George D. Yancopoulos: These two classes of bi-specifics can be paired with each other, as well as with liptyle, and we are exploring all these combinations and more. We presented updates at the American Society of Hematology, or AASH, meeting in December on adronextamab, or CD20 by CD3, a bispecific that continues to show high rates of durable responses in follicular and diffuse large B cell lymphomas. We are working with the FDA to determine the optimal dosing protocol designed to further minimize already rare cytokine release syndrome events during the step-up dosing phase of this powerful agent. A subcutaneous formulation is under development as well. We also provided updates at ASH on our BCMA by CD3 bi-specific for relapsed refractory myeloma.

The update at the American Society of Hematology or Ash meeting in December on your next day, Ma'am, our CD 20 by CD three by specific which continued to show high rates of durable responses in Follicular and diffuse large b cell lymphomas.

We are working with the updated determined the optimal dosing program protocol designed to further minimize already rare cytokine release syndrome events.

During this step up dosing phase of this powerful agents are.

Subcutaneous formulation is under development as well.

We also provided updates at ash on our be CMA Bye Bye bye see three bispecific for relapsed refractory myeloma.

George D. Yancopoulos: And our pivotal Phase 2 trial is enrolling well, with full enrollment anticipated this year. Phase III trials for this program, as well as studies of a subcutaneous formulation, are also on track to start this year as well. Our third CD3 bispecific in the clinic, Regen4018; our MUX16 bispecific continues in dose escalation trials for ovarian cancer, where we are observing early efficacy signals. Our Costa and Bison Civics are also progressing.

Our pivotal phase II trial is enrolling well with full enrollment anticipated this year.

Phase III trials for this program as well as studies of a subcutaneous formulation are also on track to start this year as well.

Our third CD three bispecific in the clinic region.

48 T. Our MX 16 by C. Three bispecific continues in dose escalation trials for ovarian cancer, where we're we are observing early efficacy signals.

Our coach them bite specifics are also progressing.

George D. Yancopoulos: Notably, our trial for our MUX16 by CD28 co-stimulatory bispecific has just dosed its first patient and will continue in combination with Liptile. Later this year, it will also be combined in patients with our MUX16 by CD3 bispecific, making it our first clinical pairing of CD3 and CoSTIM bispecific, which we hope will provide for a game-changing and generalizable approach to solid as well as he Regarding the latter, we will soon be initiating trials of a costim bispecific to be paired with our CD20 by CD3 bispecific for lymphoma, and later this year, of a different costim bispecific to be paired with our BCMA by CD3 bispecific for myeloma.

Notably our trial for our MX 16 by CD 28, co stimulatory Bispecific has just dosed the first patient and we will continue in combination with lip tile later this year. It would also be combined in patients with our MX 16 by CD three buses a day, making it our first clinical pairing of CD three <unk> co.

And by specifics.

Which we hope will provide for a game changing and generalizable approach to solid as well as hematologic tumors.

Regarding the ladder, we will soon be initiating trials of a co stim bispecific to be paired with our CD 20 by CD three bispecific for lymphoma.

And later this year of a different co stim bispecific to be paired with RBC made by CD three bispecific in myeloma.

George D. Yancopoulos: Our PCMA co-stim bi-specific is progressing in dose escalation trials with Leptile for patients with prostate cancer, and we also have a custom targeting the EGF receptor that will allow for a variety of novel combinations as well. These combination programs, pairing bispecs with each other and with our anti-PD-1, have the potential to synergistically unleash the power of immuno-oncology more broadly than currently approved treatments. And thus, there is a lot of interest in the timing of the data releases from these early combination programs.

Or P. CMA co stim Bispecific is progressing in dose escalation trials with lip tile for patients with prostate cancer and we also have a coast I'm targeting the EGF receptor that will allow for a variety of novel combinations as well.

These combination programs sparing by expense with each other and with our anti PD, one and the potential to Synergistically unleash the power of immuno oncology more broadly than currently approved treatments and thus there is a lot of interest in the timing of the data releases from these early combination programs.

George D. Yancopoulos: We hope you appreciate the requirement for careful and deliberate dose-escalation trials to ensure patient safety, as these drugs are designed to activate patients' immune systems and involve novel and powerful pathways. While early results or top-line data announcements are possible in 2021, readouts are equally possible to occur in 2022. Beyond oncology, I'd like to highlight that next week we expect approval for evanacumab, now known as efkiza, for homozygous familial hypercholesterolemia. If approved, this addition to our portfolio builds upon our cardiometabolic expertise and has the potential to help patients suffering from this rare disease.

We hope you appreciate the requirement for careful and deliberate dose escalation trials to ensure patient safety. As these drugs are designed to activate patients immune system and involve novel and powerful pathways. Hence.

While early results with topline data announcements are possible in 2021 readouts are equally possible to occur in 2022.

Beyond oncology I would like to highlight that next week, we expect approval for Abnaki man now known as F keys at.

For homozygous familial hypercholesterolemia if approved this addition to our portfolio builds upon our cardio about cardio metabolic expertise and has the potential to help patients suffering from this rare disease.

George D. Yancopoulos: Before I finish, I'd like to highlight that we continue to invest in our world-leading human sequencing efforts at the Regeneron Genetic Center, which is pivotal to identifying and validating targets for our new Genetic Medicines Initiative, which we believe could be transformational not only for Regeneron but for our entire industry and already involves important collaborations with partners such as Alnylam, Intelia, Decibel, Bluebird, and others. To conclude, in 2020, we and our partners introduced nine new investigational therapies into the clinic, submitted marketing applications for six new indications, and secured two new drug approvals or authorizations.

Before I finish I'd like to highlight that we continue to invest you know world leading human sequencing efforts at the Regeneron Genetics center, which is pivotal to identifying and validating targets for our new genetics medicines initiative.

Which we believe could be transformational not only for regeneron, but for our entire industry and orly involves important collaborations with partners such as El Niland, Intaglio Decibel Bluebird and others.

To conclude.

<unk> in 2020, we and our partners have introduced nine new investigational therapies into the clinic submitted marketing applications for six new indications and secured two new drug approvals or authorizations. We are proud of the remarkable accomplishments. Our regeneron team has achieved in a difficult year.

George D. Yancopoulos: We are proud of the remarkable accomplishments our Regeneron team has achieved in a difficult year, and we thank our many investigators and patients, who have been essential to helping us with these accomplishments. With that, I'd like to turn it over to Marion.

Our many investigators and patients who have been essential to helping us with these accomplishments.

With that I'd like to turn it over to Marion.

Marion McCourt: Thank you, George. We ended 2020 with positive momentum across our commercial portfolio, as our core products Alia, Dupixent, and Liptio delivered strong performance in the fourth quarter. Our 2020 results, coupled with near-term launch opportunities, position us for continued diversified growth in 2021. Beginning with Alia, fourth-quarter global net sales grew 10% year-over-year to $2.2 billion.

Thank you George we ended 2020 with positive momentum across our commercial portfolio as our core products and we want to pick from.

And look tile delivered strong performance from the fourth quarter.

'twenty 'twenty results, coupled with near term launch opportunities position us for continued diversified growth in 'twenty and 'twenty one.

Beginning with.

Fourth quarter Global net sales grew 10% year over year to $2 2 billion.

Marion McCourt: As we reported last month, U.S. Alia net sales grew 10% year-over-year to $1.34 billion, the highest reported net sales since Alia's launch. Alia again outperformed the category with share gains from both branded and unbranded competition. Alia's share of the branded category approached 75% for the quarter, and Alia remains the number one prescribed anti-VEGF therapy overall in wet AMD and diabetic eye disease. While volume in the overall anti-VEGF category declined in 2020, Alia was the only product in the category to grow.

Last month U S.

Net sales grew 10% year over year to 1.34 billion the highest reported net sales since launch.

We again outperformed the category with share gains from both branded and unbranded competition.

His share of the branded category approached 75% for the quarter.

It remains the number one prescribed anti VEGF therapy overall in wet AMD and diabetic eye disease well.

While volume in the overall anti veg.

Net category declined in 2020, I Leah was the only product in the category to grow patient volumes are now normalizing eylea sets a high bar on efficacy safety and dosing flexibility and real World experience Force.

Marion McCourt: Patient volumes are now normalizing, and Alia sets a high bar on efficacy, safety, dosing flexibility, and real-world experience for current and future competitions. The anti-VEGF category continues to be supported by the aging population and increasing prevalence of diabetes. Realizing the full potential of diabetic eye disease remains a key initiative, representing a significant growth opportunity for ILEA, and is largely unexploited. We intend to initiate a direct-to-consumer campaign to create awareness for patients about the importance of vision care as part of managing their diabetes. In summary, ILEA had an impressive quarter, and we remain confident in its outlook.

Future competition.

That just category continues to be supported by the aging population and increasing prevalence of diabetes.

Realizing the full potential in diabetic eye disease remains a key initiative, representing a significant growth opportunity.

Hum.

It's largely underpenetrated, we intend to initiate.

Consumer campaign to create awareness for patients and the importance of vision cash as part of managing their diabetes and <unk>.

Summary, Andy I had an impressive quarter and we remain confident from its outlook.

Marion McCourt: Next, we recorded $146 million for our antibody cocktail RegenCoV in the fourth quarter. Where appropriate, we are deploying commercial efforts under the EUA to improve availability of this important treatment against COVID-19 for at-risk patients. We are engaging with all stakeholders to reduce bottlenecks and drive utilization rates higher. Regeneron is working to educate stakeholders, including patients, on the urgency to treat at-risk non-hospitalized patients within 10 days of receiving a positive COVID-19 diagnosis. Initiatives to reduce the administrative burden of directing patients to treatment centers are beginning to yield encouraging results.

Next we recorded $146 million for our antibody cocktail, which incurred in the fourth quarter, where appropriate we are deploying commercial efforts under the E rate come from.

Well this important treatments against COVID-19 for at risk patients.

Gauging with all stakeholders to reduce bottlenecks and drive utilization rates higher.

Ron is working to educate stakeholders, including patients on the urgency to treat at risk non hospitalized patients within 10 days of receiving a positive COVID-19 diagnosis.

To reduce administrative burden and direct patients to treatment centers are beginning to yield encouraging results.

Marion McCourt: Physicians using Regencove are providing very positive feedback on treatment results. Let me also briefly discuss another new medicine, Evanocumab, which has the brand name Aftiza. We're prepared for the February 11th PDUFA date for Aftiza for the treatment of HOFH, a rare disease that affects approximately 1,300 patients in the U.S. There is a high unmet need for these patients with this rare genetic condition as they struggle to keep their LDL cholesterol levels under control. These patients face an increased risk of heart disease as early as their teenage years.

<unk> using with Genco, providing very positive feedback on treatment results let.

Let me also briefly discuss another new medicine.

Brand name F. T that we are prepared for the February 11.

For pizza for the treatment of each O S. H, a rare disease that affects approximately 1300 patients in the U S. There is high unmet need for these patients with this rare genetic condition.

Struggle to keep their LDL cholesterol levels under control.

Patients face an increase with a premature heart disease as early as their teenage years.

Marion McCourt: We are leveraging our cardio metabolic expertise and existing commercial platform to drive uptake in this rare disease category. Turning now to Liptio, where fourth-quarter global net sales grew to 97 million. In the U.S., net sales were 74 million, driven by steady volume growth in advanced CSUC.

We are leveraging our cardio metabolic expertise and existing commercial platform.

And this weird disease category.

Turning now to the tire where fourth quarter global net sales grew to 97 million in the U S. Net sales were 74 million driven by steady volume growth and advance. The FCC. We are nearing the potential approval of two additional indications from a child in basal cell carcinoma, and non small cell lung cancer.

Marion McCourt: We are nearing the potential approval of two additional indications for Liptio in basal cell carcinoma and non-small cell lung cancer, both of which received priority reviews and have upcoming PDUFA dates. Our teams are eager and ready to launch once approved. For basal cell carcinoma, there are no FDA-approved treatment options once a patient progresses on or becomes intolerant to hedgehog inhibitors.

Of which received priority reviews and have up I mean, our teams are eager and ready to launch once approved for basal cell carcinoma. There are no FDA approved treatment options once a patient progresses on or becomes intolerant Hedgehog inhibitors, just as we did with D. A C. C C will work to establish slip.

Marion McCourt: Just as we did with CSCC, we will work to establish Liptio as the standard of care in appropriate BCC patients. We also look forward to competing in non-small cell lung cancer, where there is a large opportunity among patients with PD-L1 expression of at least 50%. Liptio has a favorable product profile, and a growing majority of treatment centers and oncologists have experience using Liptio in their CSCC patients. Physicians prefer choice, and recent market research shows that nearly two-thirds of physicians are highly motivated to evaluate Liptio for their lung cancer patients if it is approved.

That's the standard of care inappropriate BCC patients.

We also look forward to competing in non small cell lung cancer, where there's a large opportunity among patients with PDL one expression of at least 50% net tayo has a favorable product profile and a growing majority of treatment centers and oncologists have experience using wood tile and their C. S. D C patients.

Physicians prefer choice and recent market research shows that nearly two thirds of physicians are highly motivated to evaluate tayo for their lung cancer patients if approved.

Marion McCourt: Additionally, we've built a highly experienced commercialization team with significant launch experience with this class. If approved, we aim to rapidly increase market awareness of Liptio as a compelling new anti-PD-1 monotherapy treatment option. Finally, moving to DEPIXIT, global net sales in the fourth quarter were $1.17 billion, representing 56% growth compared to the prior year.

Additionally, we built a highly experienced commercialization team with a significant launch experience with this class.

Proved we aim to rapidly increase market awareness of <unk> tile is a compelling anti PD, one monotherapy treatment option.

Finally, moving to the pits at global net sales from the fourth quarter 1.17 billion, representing 56% growth compared to the prior year in the U S. Broad based growth across all approved indications contributed to net sales of $926 million, we continued to see strong prescription trends.

Marion McCourt: In the U.S., broad-based growth across all approved indications contributed to net sales of $926 million. We continue to see strong prescription trends across all approved indications, and weekly new patient shares have recently eclipsed pre-pandemic levels. Atopic dermatitis, the largest indication, is a significant growth driver for Dupixent due to its rapid onset, proven efficacy, and well-established safety profile. Physicians continue to expand prescribing across both moderate and severe disease, and in younger populations where safety is paramount.

Across all approved indications in the week.

New patient shares have recently eclipsed pre pandemic level.

Topic dermatitis, the largest indication.

Growth driver undertake rapid onset proven efficacy and well established safety profile physicians continue to expand prescribing price, both moderate and severe disease and in younger populations, where safety is paramount.

Marion McCourt: Despite the impressive launch growth trajectory, there remains significant opportunity as only a small percentage of the over 2 million biologic eligible patients in the U.S. have been prescribed Dupixent. Our initiatives aim to grow new patient starts as there is substantial opportunity for many more patients to benefit and support patients already on Dupixent to continue their treatment. Moving to asthma, it depicts it as performing well in this competitive market based on its clinical efficacy and safety profile, which is compelling and differentiated to prescribers.

Impressive lunch growth trajectory, there remains significant opportunity as only a small percentage of the over 2 million biologic eligible patients in the U S had been prescribed depicts it our initiatives aimed to grow new patient starts.

Substantial opportunity for many more patients to benefit and support patients already on depiction to continue their treatment.

Moving to asthma.

It's performing well in this competitive market based on its clinical efficacy and safety profile, which is compelling and differentiated to prescribers.

Marion McCourt: Our market expansion efforts supporting HDPs and patients, including DTC, continue to have a meaningful impact on new initiations, and launch preparations are underway in the pediatric asthma setting. For chronic rhinocidiascitis with nasal polyps, we see healthy demand and continued strong prescribing trends among ENTs and allergists.

Market expansion efforts supporting Hep's and patients, including DTC continue to have a meaningful impact on new initiations and launch preparations are underway and pediatric interest in.

The pediatric asthma setting for chronic rhinosinusitis with nasal polyps, we see healthy demand and continued strong prescribing trends among E N Ts and allergists depicts it is core to our diversified growth strategy, where there remains substantial opportunity for future expansion in closing we ended <unk>.

Marion McCourt: DuPixent is core to our diversified growth strategy, where there remains substantial opportunity for future expansion. In closing, we ended 2020 with momentum, delivering strong performance across our business. With several near-term launches ahead, we have important opportunities to strengthen our thriving commercial portfolio and capitalize on growth. Now, I'll turn the call to Bob.

20th momentum delivering strong performance across our business with several near term launches ahead, we have important opportunities to strengthen our thriving commercial portfolio and capitalize on growth now.

Now I'll turn the call to Bob.

Robert E. Landry: Thanks, Marion, and good morning and good afternoon, everybody. My comments today on financial results and outlook will be on a non-GAAP basis where applicable. For the fourth quarter of 2020, Regeneron delivered again double-digit, broad-based, top- and bottom-line growth. Our revenue streams continue to diversify with significant growth contributions from Depixent, Regencove, and as we invest in our best-in-class pipeline for sustained future growth. For the fourth quarter, total revenue grew 30% year-over-year to $2.4 billion, driven by growth in U.S. ILEA sales.

Thanks, Marion and good morning, and good afternoon, everybody my.

My comments today on financial results and outlook will be on a non-GAAP basis, where applicable.

For the fourth quarter of 2020, Regeneron delivered again double digit broad based top and bottom line growth.

Our revenue streams continue to diversify with significant growth contributions from depiction English genco.

As we invest in our best in class pipeline for sustained future growth.

For the fourth quarter total revenue grew 30% year over year to 2.4 billion driven by growth in U S. Eylea sales higher collaboration revenues from our partners Centipede in Bayer in sales of our rigid cold antibody cocktail diluted net income per share grew 27% year over year to $9.53 on.

Robert E. Landry: Higher Collaboration Revenues from our partners, Sanofi and Bayer, and sales of our Regencove antibody cocktail. Diluted net income per share grew 27% year-over-year to $9.53 on net income of $1.1 billion. Since Marion discussed our US ILEA results, I will start with our Bayer and Sanofi collaboration.

Net income of $1 1 billion.

Since Marion discussed our U S. Eylea results I will start with our Bayer incentive fee collaborations star.

Robert E. Landry: Starting with the Bayer collaboration, ex-US ILEA net product sales reported to us by Bayer were $859 million for the fourth quarter of 2020, representing growth of 10% on a reported basis compared to the prior year. Total Bayer collaboration revenue was $361 million, of which we recorded $335 million for our share of net profits from ILEA sales outside the U.S. Total Sanofi collaboration revenue was $317 million in the fourth quarter. Our share of the profits from the commercialization of non-Io antibodies was $230 million, which compares favorably to profits of $104 million in the prior year.

Starting with the Bayer collaboration ex U S. Eylea net product sales reported to us by Bayer were 859 million for the fourth quarter of 2020, representing growth of 10% on a reported basis compared to the prior year.

Total Bayer collaboration revenue was $361 million of which we recorded $335 million for our share of net profit from Eylea sales outside the U S.

Total scientific collaboration revenue was $317 million in the fourth quarter, our share of the profit from the commercialization of non Io antibodies was 230 million, which compares favorably to profits of $104 million in the prior year. This growth was primarily driven by higher depiction profit other.

Robert E. Landry: This growth was primarily driven by higher depreciable profits. Other revenue increased to $123 million in the fourth quarter of 2020 compared to $96 million in the prior year. The primary driver is the recognition of $42 million from the U.S. government associated with reimbursements for Regencove development. As we said on the third quarter call, this line item continues to trend lower due to the wind-down of development reimbursements from the U.S. government.

Other revenue increased to 123 million in the fourth quarter of 2020 compared to 96 million in the prior year. The primary driver is the recognition of 42 million from the U S government associated with reimbursements of Virgin Cove development.

As we said on the third quarter call. This line item continues to trend lower due to the wind down of development reimbursements from the U S government in 'twenty and 'twenty, one we expect to record approximately half of the $557 million recorded in other revenue for full year 2020.

Robert E. Landry: In 2021, we expect to record approximately half of the $557 million recorded in other revenue for the full year 2020. Moving on to our operating expenses, and starting with R&D. R&D increased 50% year-over-year to $675 million, primarily due to continued clinical development costs for our RegenCoV antibody cocktail and higher headcount to support our expanding pipeline. Next, SG&A expenses increased 22% year-over-year to $381 million. The year-over-year increase was largely driven by increased headcount, launch preparations for LipTio, and continued investments for growth in ILEA. Cost of goods sold increased 79% from the prior year to $166 million due to sales of Regencov and Pralulin in the U.S.

Moving onto our operating expenses and starting with R&D R&D increased 50% year over year to $675 million, primarily due to continued clinical development costs for our Virgin colds antibody cocktail and higher head count to support our expanding pipeline next SG&A expense increased 22% year over year to 300.

$81 million a year over year increase was largely driven by increased head count launch preparations for lip Tayo and continued investments for growth in Eylea.

Cost of goods sold increased 79% from the prior year from 93 million to 166 million due to sales of Virgin Cove and Praluent in the U S.

Robert E. Landry: The Cost of Collaboration and Contract Manufacturing was $174 million compared to $113 million in the fourth quarter of 2019, primarily due to increased sales of the PICS. Additionally, in other operating income and expense, we recorded $145 million of income in the fourth quarter of 2020. This includes approximately $100 million of income related to higher recognition of upfront and milestone payments previously received from our collaborators with Santa Fe, Teva, and Mitsubishi Tanabe. Finally, in other income and expense, we recorded $2 million of expense compared to $25 million of income in the fourth quarter of 2019.

Cost of collaboration and contract manufacturing was 174 million compared to $113 million in the fourth quarter of 2019, primarily due to increased sales of depiction. Additionally in other operating income and expense. We recorded 145 million of income in the fourth quarter of 2020. This includes approximately 100 million of income related.

Higher recognition of upfront and milestone payments previously received from our collaborators with Santa Fe, Teva and Mitsubishi Tanabe.

Finally in other income and expense, we recorded 2 million of expense compared to 25 million of income in the fourth quarter of 2019. This is driven by interest expense related to our $2 billion debt issuance in August 2020, and lower investment returns on our existing cash and marketable securities.

Robert E. Landry: This is driven by interest expense related to our $2 billion debt issuance in August 2020 and lower investment returns on our existing cash and marketable securities. Turning now to taxes, the effective tax rate was 7.7% in the fourth quarter of 2020 compared to 10.6% in the fourth quarter of 2019.

Turning now to taxes, the effective tax rate was seven 7% in the fourth quarter of 2020 compared to 10, 6% in the fourth quarter up 2019.

Shifting now to cash flow and the balance sheet for the full year 2020, Regeneron generated 2 billion in free cash flow and ended the year with cash and marketable securities less long term debt of $4 7 billion. We also exhausted our inaugural $1 billion share repurchase program in the fourth quarter.

Robert E. Landry: Moving now to cash flow and the balance sheet. For the full year 2020, Regeneron generated $2 billion in free cash flow and ended the year with cash and marketable securities, less long-term debt of $4.7 billion. We also exhausted our inaugural $1 billion share repurchase program in the fourth quarter.

As a result of our strong balance sheet and confidence in the growth trajectory of our business. We were announcing a new board authorized share repurchase program of $1 5 billion. This program is consistent with our capital allocation priorities are funding, our broad R&D pipeline investing in enabling and synergize in R&D business development opportunities and returning cash to our.

Robert E. Landry: As a result of our strong balance sheet and confidence in the growth trajectory of our business, we are announcing a new board-authorized share repurchase program of $1.5 billion. This program is consistent with our capital allocation priorities of funding our broad R&D pipeline, investing in enabling and synergizing R&D business development opportunities, and returning cash to our shareholders. With this new authorization, we will continue to be opportunistic buyers where we see a dislocation between our stock price and our intrinsic valuation.

Shareholders with this new authorization, we will continue to be opportunistic buyers, where we see dislocation between our stock price and our intrinsic valuation.

Having reviewed our fourth quarter performance I'd like to take some time to discuss the 'twenty 'twenty, one financial outlook, starting with R&D guidance, we forecast our 'twenty 'twenty, one R&D expense to be in the range of 2.7 2.85 billion, we are continuing to advance programs and our diverse R&D portfolio with up to seven nineties.

To enter the clinic in 'twenty 'twenty, one of which six were discovered in house. This is in addition to <unk> that entered the clinic in 'twenty, 'twenty, which George mentioned.

Robert E. Landry: Having reviewed our fourth quarter performance, I'd like to take some time to discuss the 2021 financial outlook. Starting with R&D guidance, we forecast our 2021 R&D expenses to be in the range of $2.7 to $2.85 billion. We are continuing to advance programs in our diverse R&D portfolio with up to seven I&Ds to enter the clinic in 2021, of which six were discovered in-house. This is in addition to I&Ds that entered the clinic in 2020, which George mentioned.

Included in our R&D guidance and based on current plans, we expect to spend between 275 and $350 million on the Virgin Cove Development program. We expect most of this with genco spend to occur in the first half of the year next we forecast our 'twenty 'twenty, one SG&A expense to be in the range of 1.5 to 1.63.

We continue to invest in multiple launches in 2021, including two new indications for lip tayo in efforts for Virgin Cold also as you heard from Marion. This increased spending will also be driven by the DTC campaign for Eylea as we continue to see significant growth opportunity in diabetic eye disease next we expect our.

Robert E. Landry: Included in our R&D guidance and based on current plans, we expect to spend between $275 and $350 million on the RegenCOVE development program. We expect most of this RegenCOVE spend to occur in the first half of the year.

'twenty 'twenty, one chronic gross margin on a percentage of net product sales that we record to be between 87, and 89%. We expect 'twenty 'twenty one cost of collaboration manufacturing to be in the range of 670 million to 750 million driven by continued growth in order to pick some franchise.

Robert E. Landry: Next, we forecast our 2021 SG&A expense to be in the range of $1.5 to $1.63 billion. We will continue to invest in multiple launches in 2021, including two new indications for elliptile and efforts for RegenCOVE. As you heard from Marion, this increased spending will also be driven by a DTC campaign for ILEA as we continue to see significant growth opportunities in diabetic IVs. Next, we expect our 2021 product gross margin on a percentage of net product sales that we record to be between 87 and 89 percent.

We forecast 2021 operating income and expense to be income of $150 million to $175 million.

Finally, we expect our 'twenty 'twenty, one non-GAAP tax rate to be in the range of 12% to 14% inclusive of Virgin pulp sales in the U S, which are taxed at the U S statutory rate.

I'd also like to review our current supply agreements with the U S government for Virgin Cold, we'd expect to recognize the remainder of the $466 million initial U S government contract in the first quarter of 2021, we also announced last month, a new agreement with the U S government for additional doses of Virgin Cold right now we expect to deliver.

Robert E. Landry: We expect 2021 cost of collaboration manufacturing to be in the range of $670 million to $750 million, driven by continued growth in our Dupixent franchise. We forecast 2021 operating income and expense to be in the range of $150 million to $175 million. Finally, we expect our 2021 non-GAAP tax rate to be in the range of 12 to 14 percent, inclusive of RegenCOV sales in the U.S., which are taxed at the U

Approximately 750000 doses by the agreed delivery date of June 30th of this year at the contracted price of $2100 per dose with the vast majority of these deliveries occurring in the second quarter.

As George mentioned earlier, we are evaluating a lower 1.2 gram dose for Virgin Cove should this lower treatment dose received emergency use authorization or approval from the F. D. E. We aim to deliver up to 1.25 million doses by June 30th which is the maximum quantity that is authorized for purchase by the U S government under the supply.

Importantly, if the lower dose is approved the pricing per dose does not change our ability fulfill these finished doses is predicated on continued success in the manufacturer of both product and access to third party fill and finish capacity, which is under heavy demand from COVID-19 vaccine manufacturers Inc.

Robert E. Landry: I'd also like to review our current supply agreements with the U.S. government for Regencov. We expect to recognize the remainder of the $466 million initial U.S. government contract in the first quarter of 2021. We also announced last month a new agreement with the U.S. government for additional doses of Regencov. Right now, we expect to deliver approximately 750,000 doses by the agreed delivery date of June 30th of this year at the contracted price of $2,100 per dose, with the vast majority of these deliveries occurring in the second quarter.

Conclusion, we are well positioned for significant growth with durable core products multiple near term launches and specialized growth opportunities while investing in our R&D engine to drive sustainable long term growth with that I'd like to turn the call back to Justin.

Thank you Bob Michelle 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 today, so to ensure that we're able to address as many of these questions as possible. We are only going to answer one question from each caller before moving to the next so please do limit yourself to that one question. Please go ahead Michelle.

Robert E. Landry: As George mentioned earlier, we are evaluating a lower 1.2 gram dose for Regencov. Should this lower treatment dose receive emergency use authorization or approval from the FDA, we aim to deliver up to 1.25 million doses by June 30th, which is the maximum quantity that is authorized for purchase by the U.S. government under the supply agreement. Importantly, if the lower dose is approved, the pricing per dose does not change.

Thank you, ladies and gentlemen, if you'd like to ask a question. Please press Star then one if your question has been answered and you'd like to remove yourself from the queue. Please press the pound key.

First question comes from Chris Raymond with Piper Sandler Your line is open.

Hey, Thanks, So I heard a question Sandwich average and Cove I'm, sorry, I heard Marion prepared remarks around you know working to iron out some of the reported logistical and arguably financial barriers that they have.

Ben.

Talked about so much in the real world setting, but yeah.

Robert E. Landry: Our ability to fulfill these finished doses is predicated on continued success in the manufacture of bulk product and access to third-party finished capacity, which is under heavy demand from COVID-19 vaccine manufacturers. In conclusion, we are well positioned for significant growth with durable core products, multiple near-term launches, and specialized growth opportunities, while investing in our R&D engine to drive sustainable long-term growth. With that, I'd like to turn the call back to

I'm guessing with the development path being as compressors. It was you know your commercial probably playing catch up a bit here, but.

Can you maybe talk a little bit about.

More specifically what you guys are fuel needs to be worked on.

The most is it is it education of physicians is it.

Just wait for logistical issues, what kind of support.

Any color there in terms of what exactly you need to do to sort of smooth things out would be great share.

Sure.

Marion can give you more day.

But the way we look at it.

We need to do work at all parts of the funnel at the top end of the funnel being getting physicians to actually prescribe the product.

Robert E. Landry: Thank you, Bob. Michelle, 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 today, so to ensure that we're able to address as many of these questions as possible, we are only going to answer one question from each caller before moving to the next. So please do limit yourself to that one question. Please go ahead, Michelle.

For your patients.

And as well as at the bottom end of the funnel, which is gets quite now in some places.

Allowing people to easily get administered the product.

The physician wants to treat the patient.

A lot of progress on both ends there.

Operator: Thank you. Ladies and gentlemen, if you'd like to ask a question, please press star and then 1. If your question has been answered and you'd like to remove yourself from the queue, please press the town key. Our first question comes from Chris Raymond with Piper Sandler. Your line is open.

Yes.

And the final they've been best practices emerging where people have.

Link directly medical record algorithms to positive patients.

Asking their doctor if they want to get to.

So to administer the cocktail.

As minister lots and lots of doses.

Christopher Joseph Raymond: Hey, thanks. This question is on Regencove, so I heard Marion's prepared remarks around working to iron out some of the reported logistical and arguably financial barriers that have been talked about so much in the real world setting, but I'm guessing with the development path being as compressed as it was, your commercial is probably playing. More specifically, what do you guys feel needs to be worked on the most? Is it the education of physicians? Is it the logistical issues?

Hum.

These best practices are emerging around the country.

Some skepticism that the data is incomplete.

There isn't robust enough and.

We certainly would agree we don't have the normal day to standard fit you might have for a full FDA approval.

In the midst of a pandemic.

Hundreds of thousands of people are going to die.

George D. Yancopoulos: What kind of support? Any color there in terms of what exactly you need to do to sort of smooth things out would be great.

And sometimes one has to look at the totality of the evidence.

George D. Yancopoulos: Sure. Flynn, Marion can give you more details, but the way we look at it, we need to do work at all parts of the funnel. The top end of the funnel being getting physicians to actually prescribe the product for the appropriate patients, as well as at the bottom end of the funnel, which gets quite narrow in some places, allowing people to easily get administered the product once the physician wants to treat the patient.

And make decisions in that regard so we continue on this.

The top end education, and then logistics on the bottom at Marion.

What day it something.

Thanks, Glenn and Chris I would just add.

But you know as Len pointed out we continue to work with all of our stakeholders to improve in all dimensions top level and at the local level, it's not a traditional commercialization under the emergency use authorization, we're working very closely with the governance and helping stakeholders with education the efforts of our medical.

George D. Yancopoulos: There's been a lot of progress on both ends of the funnel. On the bottom end of the funnel, there have been best practices emerging, where people have directly linked medical record algorithms to positive patients, asking their doctors if they want to get a consult to administer the cocktail. And they've administered lots and lots of doses of monoclonal antibodies. And these best practices are emerging around the country. On the higher end, there is still some skepticism that the data is incomplete or that the data isn't robust enough.

<unk> team and the marketplace has been Paramount our trade and market access group, our policy and government teams. So we have a lot of work to do but we are making progress and I do think that's very very encouraging most encouraging is all of all of us when we talk to the physician.

<unk> and Kols that have used <unk>. They report positive results and some at this point some facilities have used antibodies in our antibody cocktail to treat hundreds and thousands of patients to the best practices are growing and we're trying to appropriately accelerate that learning.

George D. Yancopoulos: And we certainly would agree that we don't have the normal data standards that you might have for a full FDA approval. But we remind everybody that we are in the midst of a pandemic where thousands, hundreds of thousands of people are going to die and have died. And sometimes one has to look at the totality of the evidence.

Thank you Michelle next question please.

Our next question comes from Cory <unk> with Jpmorgan. Your line is open.

George D. Yancopoulos: [inaudible] Thanks, Lynn. And Chris, I would just like to

Good morning, guys. Thanks for taking the question odd depicts and given the time on market and abroad favorable feedback everyone seems to get on the product why do you believe its only penetrated roughly 6% in the U S and for atopic Derm and and what do you think is the key here over the next year or two to unlocking a lot more thank you.

George D. Yancopoulos: There is a lot of work to do, but we are making progress, and I do think that's very, very encouraging. Most encouraging of all is when we talk to the physicians and KOLs that have used RegenCOVE. They report positive results, and at this point, some facilities have used antibodies in our antibody cocktail to treat hundreds and thousands of patients. So the best practices are growing, and we're trying to appropriately accelerate that learning. Thank you.

Sure well, let me take a stab Cory on that.

Thanks.

For patients with atopic dermatitis, there had been so little for so long that over the course of several years now where to pick from the spend in the marketplace. The you know the amazing efficacy the safety profile. The convenience of use is something that has required a lot of market education and a lot of market.

Operator: Our next question comes from Corey Casimo with J.P. Morgan. Your line is open.

Standing and across the approved indications that we have in the U S. Today, there are about 2 million $2 2 million actually eligible patients and only about 6% or getting treatment. Today. So well you know favorable results in the understanding of the Pic sense with dermatologists allergists all of our priest.

Corey Casimo: On Dupixent, given the time on market and the broad favorable feedback everyone seems to get on the product, why do you believe it's only penetrated roughly 6% in the U.S. for atopic derms, and what do you think is the key here over the next few years?

Marion McCourt: Thank you.

George D. Yancopoulos: Sure. Well, let me take a start, Corey, on that.

George D. Yancopoulos: You know, I think that for patients with atopic dermatitis, there had been so little for so long that over the course of several years now that Dupixent has been in the marketplace, the amazing efficacy, the safety profile, the convenience of use, is something that has required a lot of market education and a lot of market understanding. And across the approved indications that we have in the U.S. today, there are about 2 million, 2.2 million actually eligible patients, and only about 6 percent are getting treatment today.

Drivers and obviously in asthma now with Pulmonologists, an allergist for nasal polyps with E&ps as well. This is a remarkable alternatives across type two disease for approved indications today, but there's a lot of unmet need and obviously the future indications will take us into new populations and new prescribers.

I also think there's a lot of education that needs to be done because obviously theres a long legacy in which <unk>.

People believe that drugs that you might take by mouth things like JAK inhibitors or things like steroids.

George D. Yancopoulos: So while, you know, favorable results in the understanding of Dupixent with dermatologists, allergists, all of our prescribers, and obviously in asthma, now with pulmonologists and allergists, for nasal polyps with ENTs as well, this is a remarkable alternative across type 2 disease for approved indications today. But there's a lot of unmet need, and obviously, future indications will take us into new populations and new prescribers.

Not as serious drugs as drugs that you take by an injection or biologicals and I think that most people or most sophisticated people are beginning to realize now that it's the biologicals.

Particularly a drug like two pixel.

Which is more targeted more natural and less prone to an assortment of both on target and off target toxicities, and so people think Oh, a pill, it's less serious and I think we have to do a lot of education to explain that these biologicals are actually more targeted.

George D. Yancopoulos: I also think there's a lot of education that needs to be done because, obviously, there's a long legacy in which people believe that drugs that you might take by mouth, things like JAK inhibitors or things like steroids, are not as serious as drugs that you take by injection or biologicals. And I think that most people, or most sophisticated people, are beginning to realize now that it's the biologicals, particularly a drug like Dupixan, which is more targeted, more natural, and less prone to an assortment of both on-target and off-target toxicities.

More natural they can be a lot safer and build a more powerful you don't have to think of them as more serious in a negative way. So I think theres a huge legacy of thinking of things like that but the emerging data that's coming out now is going to help I think.

With these points that if you're if you're suffering from a disease like atopic dermatitis, you want to be on a natural approach targeted biological something that has an exquisite safety profile like the pixel.

George D. Yancopoulos: And so people think, oh, a pill, it's less serious. And I think we have to do a lot of education to explain that these biologicals are actually more targeted, and more natural, and they can be a lot safer. And though they're more powerful, you don't have to think of them as more serious in a negative way. So I think there's a huge legacy of thinking of things like that. But the emerging data that's coming out now is going to help, I think, with these points. That if you're suffering from a disease like atopic dermatitis, you want to be on a natural approach, targeted biological, something that has an exquisite safety profile like this. Next question, Michelle.

Thanks, George next question Michelle.

Yeah.

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

Great.

Thanks again for all the work on the Covid front really appreciate all the effort I know you guys have been working hard there.

Just a question for George you mentioned the efficacy signals, you're seeing with your Mark 16 by specific in ovarian cancer. Just wondering if you can elaborate a little bit more there is that a resist responses at CA 125, or maybe another biomarker.

And then were on the safety front any initial.

Anything initially you can share there as well thank you.

Right well I can tell you when I say efficacy it relates to both resist and see a 125 measures I don't think that we have given any specifics on that and we're waiting for an appropriate medical venue in which to to present the data, but we are pretty.

Operator: Our next question comes from Terence Flynn with Goldman Sachs. Your line is open.

Terence C. Flynn: Great. Thanks again for all the work on the COVID front. I really appreciate all the effort. I know you guys have been working hard there.

Excited about the preliminary evidence of activity and as I said will be giving all the details.

George D. Yancopoulos: You mentioned the efficacy signals you're seeing with your MUX16 bispecific in ovarian cancer. Just wondering if you can elaborate a little bit more there. Is that a resistive response? Is it CA-125 or maybe another biomarker? And then on the safety front, anything you can share initially there as well. Thank you.

Upcoming scientific meeting.

Thank you next question Michelle.

Our next question comes from Geoffrey Porges with SVP Leerink. Your line is open.

You're very much and George a couple of questions on the algae oil related.

George D. Yancopoulos: Right. Well, I can tell you that when I say efficacy, it relates to both the RESIST and the CA-125 measures. I don't think that we have given any specifics on that, and we're waiting for an appropriate medical venue in which to present the data. But we are pretty excited about the preliminary evidence of activity, and as I said, we'll be giving all the details at an upcoming scientific meeting. Thank you. Next question, Michelle. Our next question comes from Jeffrey Porges with SCB Lyrinc. Your line is open. Thank you very much. And George.

So I'm quite excited about the allergy programs now and just wondering if you could tell us a little bit about the path forward for peanut allergy.

So whether you think this will ultimately be a maintenance treatment for a significant population. Thanks.

Yeah, I think that we're very excited about our entire allergy portfolio, because we really think we have a collection of.

Powerful, but also you know groundbreaking new approaches so as we all know so many people millions in the United States are taking for example, multiple shots weekly to try to get desensitized.

I have to go these very long prolonged all approaches and so forth.

Operator: Our next question comes from Jeffrey Porges with SCB Lyrinc. Your line is open. Thank you.

Often with unsatisfying results, even after years of therapy. So I think it's exciting as we announced that we were able to demonstrate a significant improvement in the amount of peanut.

Jeffrey Porges: Yeah, I think that we're very excited about our entire allergy portfolio, because we really think we have a collection of... [inaudible] tolerization that could occur in conjunction with the immune oral immunization or desensitization approach and we think that this is going to prove to be generalizable across the board to many of these desensitization approaches where we hope that Dupixent will aid in making patients more desensitized may be able to tolerate these regimens better as well as maybe improve more quickly and that's only one component of our allergy program we're equally excited about Somewhat unrelated effort where we're the first people who are moving into the clinic antibodies that directly bind and neutralize allergens. I for one don't understand why this hasn't been done before, but our data, some of which we have talked about publicly and even published, and some of which we will be presenting at upcoming meetings, show that these are very powerful approaches.

<unk> that could occur in conjunction with.

With the a new oral immunization oral desensitization approach and we think that this is going to prove to be generalizable across the board to many of these desensitization approaches where we hope that depicts inc will aid in and making patients.

Or do you sense. It is maybe able to tolerate the these regimens are better as well as maybe improve more quickly.

And that's only one component of our allergy program, we're equally excited about.

Somewhat unrelated effort, where we're the first people who are moving into the clinic antibodies are directly bind and neutralize allergists I for one don't understand.

Why this hasn't been done before but our data some of which we have.

<unk> talked about publicly and even publishing some of which we will be presenting at upcoming meetings showed that these are very powerful approaches from the first injection almost immediately at the first time measures. We're getting the sorts of improvements that you see cross studies, resulting after years.

Of desensitization therapy, and we're talking about two of the most important.

George D. Yancopoulos: Allergies which are both associated with asthma in settings where, because of safety concerns, desensitization approaches are not indicated. That is, cat allergy and birch allergy. The results are really striking. We think this is an entirely new way to fight allergies, one in which you can almost see the benefit immediately.

Allergies.

Both associated with with asthma, and which settings because of safety concerns desensitization approaches are not indicated that is cat allergy and birch allergy. The results are really striking we think this is an entirely new way to fight allergy.

One in which you.

You can almost see the benefit immediately once again, it's a very natural and biologic and targeted approach there.

George D. Yancopoulos: Once again it's a very natural and biologic and targeted approach. There are millions of people who are affected by these and I think knowing many of them having many of them in my family I can tell you that they would you know if we can really continue to show the sort of safety and efficacy that the initial studies are showing I think a lot of people would welcome the opportunity to take a shot and have immediate benefit in terms of their serious allergies and it's an entirely new approach and all of these things are synergistic.

There are millions of people who are affected by these and I think knowing many of them having many of them in my family I can tell you that they would you know if we can really continue to show the sort of safety and efficacy that the initial studies are showing I think a lot of people would welcome the opportunity to take the shot and had.

Immediate benefit in terms of there are serious allergies and its an entirely new approach in all of these things are synergistic of course, we can imagine many ways in which we can be combining and mixing and matching various.

George D. Yancopoulos: We can imagine many ways in which we can be combining and mixing and matching various parts of our portfolio, including things like Dupixan and these anti-allergens, but with other approaches as well. So we really think that we may be at the dawn of a whole new era of biologics approaches to treating allergies, which I think can really change everything for so many people. And we know that, according to the CDC, allergic diseases are now approaching and increasing in epidemic proportion. So there's a real need out there, and there's a real need for totally new approaches. And so we're very excited. Thank you, George. Michelle, next question.

Parts of our our portfolio, including things like two picks into these anti allergens, but with other approaches as well. So we really think that we may be at the dawn of a whole new era.

<unk> approach to treating allergy, which I think can really change everything for so many people and we know that our.

According to the CDC allergic diseases are are now approaching an increasing an epidemic proportions. So theres a real need out there and there's a real need for totally new approaches and so we're very excited about them.

Thanks, George Michelle next question please.

Operator: Our next question comes from Ronnie Gao with Bernstein. Your line is open.

Our next question comes from Ronny Gal with Bernstein. Your line is open.

Ronnie Gao: Good morning everybody. A question around the plans for non-small cell lung cancer. With you guys being so close to the launch, I was wondering if you could show us a little bit more about your launch plans. It seems that you'll have to use some sort of targeting approach and segmentation to see whether to penetrate the market given you're coming in late. Can you share a little bit more about it and kind of like what range of upside we could expect from this market? What would you be happy with?

Good morning, everybody.

Question.

For non small cell lung cancer with you guys being so close to the launch I was wondering if you can show us that a little bit more about your launch line. It seems that you'll have to use some sort of a targeting approach and segmentation to see ways to penetrate the market given youre coming in late can you share a little bit swap mark about most mark a little bit more about it and you know kind of like what range of upside could be.

From this from this market would you be happy with.

Len Schleifer: Yeah, Ronnie. It's Len.

Yeah, Ronny it's Glenn.

Len Schleifer: Yeah, Ronnie, it's Len. I want to just make one comment about how we're coming in late and then say that we probably won't answer our launch plans. We have to get our final label, and we certainly don't want to tip off any of our competitors about what we're up to, but we're spending a lot of time, obviously, thinking about that. But let me just address one comment you made, which was that you said you were coming in late.

Uh huh.

Maybe one comment about they were coming in late and then say that we probably won't answer on launch plans, we have to get a final label and we certainly don't want to tip off.

Any of our competitors, what we're up to them, but we're spending a lot of time, obviously thinking about that but let me just just one comment you made which was debt. He said coming in late I remember when you bought it.

Len Schleifer: I remember, and it may have been you, but it probably was somebody else who asked us the question, why were we even bothering with Libtio in non-small cell lung cancer? Because by the time you get it approved, there'll be 10 others that are there. And I remember George answering that question by saying, well, he's not so sure that there'll be 10 others. All antibodies aren't created equal, plus it would be a foundation for the rest of our business.

So we asked the question why where we even bother English Lib tayo.

In non small cell lung cancer, because by the time you get it approved.

10, others.

And I remember George answering their questions, saying well he's not so sure that there'll be 10, others.

All antibodies aren't created equal plus it would be a foundation for the rest of our business and pet wisdom has really panned out because.

Len Schleifer: And that wisdom has really panned out because, almost every day, there's another failure of a PD-L1 or an inferior PD-1 that doesn't combine right, all sorts of things. And there really is only one right now, the gold standard, which is Keytruda. And obviously, we don't have any head-to-head data, but when you look at our data, it's really impressive data. And so we think that we should remind everybody that the questions that we got five or 10 years ago about why bother have sort of panned out more the way George had anticipated rather than maybe everybody else had. As far as our specific launch plans are concerned, we'll ask you to stay tuned because we're working hard to prepare.

If you look almost every day, there's another failure of the PDL, one or PD one it doesn't combined right all sorts of things and there really is only one one gold standard which is keytruda and obviously, we don't have any head to head data, but when you look at our data it's really impressive.

Data and so we think that we should remind everybody that the questions that we got five or 10 years ago why bother.

Panned out more of the way George.

Rather than maybe everybody else it.

As far as a specific launch plans.

Stay tuned because we're working hard at preparing next question.

Operator: Our next question comes from Keenan McKay with RBC Capital Markets. Your line is open.

Our next question comes from Keenan Mckay with RBC capital markets. Your line is open.

Keenan McKay: Hi, thanks for taking the question and what a year indeed. Maybe a question on ILEA? A couple of years ago, you got it completely right on some of the emerging competitions.

Hi, Thanks for taking my question.

Maybe a question on <unk>.

Yeah.

A couple of years ago, you got it completely right on some of the emerging competition or not being as big of a risk.

Operator: Thank you all for joining us. I'm so glad you're here.

Keenan McKay: I know that you're a little bit nervous about being as big of a risk as myself and some of the streets had anticipated it would be. I just would love to get your perspective on some of the new data from ANG2 and sort of how you're thinking about some of the evolving competition there, again, given you were certainly right in the beginning.

Myself and some of the street.

But just would love to get your perspective on some of the new data from the standard to and sort of how you're thinking about some of the evolving the competition. There again, given mark given you're certainly right no problem.

Sure.

I think George touched on it but let me specifically as best we can have for the product you referenced from Roche, which is a combination of anti VEGF and anti it's true I might start out by saying we have the greatest respect.

Len Schleifer: I think George touched on it, but let me deal specifically as best I could with the product you referenced, from Roche, which is a combination of an anti-VEGF and anti-ANG2. I might start out by saying we have the greatest respect for Roche, Genentech, the group. We partner with them in our COVID global efforts and we watch them really establish the anti-VEGF class with Lucente. So we have tremendous respect.

For Roche Genentech.

Genentech the group part.

And with them in a COVID-19.

Our global efforts.

Hum really established.

If class with Lucentis.

So we have tremendous respect for them, but I think when it comes to answer to kind of history is a very important lesson here and that.

Len Schleifer: But I think when it comes to Ange, too, history is a very important lesson here in that I was with George, I remember it, we were traveling, I was with George when one of his colleagues were working so hard to identify, purify, and clone this really important molecule that seemed to be a critical player, et cetera, and maybe the only real other critical factor other than VEGF. So George and his group discovered this molecule, and nobody would like to see it bear fruit in terms of a treatment, but the data that we have just don't support that.

With George I remember, we were tracking I was with George when one of his colleagues they were working so hard to identify purified and Clos.

One in sequence.

This really important molecule.

Debt was seem to be a critical player in blood vessel formation, and development et cetera, and maybe the only real other critical factor other than bad Jeff.

So George and his group discovered this molecule and nobody would like to see it bear fruit in terms of a treatment, but the data that we have just don't support that.

Len Schleifer: Our data, we looked very carefully, we could not find the benefit of adding Ang-2 to the amazing effects that you get with a highly potent anti-VEGF compound such as ILEA. So, when we look at the data you refer to, we haven't seen all their data, and we'll all look for it, but from what they've disclosed, somewhere in the 40s percent to be able to get to.

David We look very carefully we could not find the benefit of adding and true to the amazing effects that you get with a highly potent.

Jeff compounds, such as Eylea. So when we look at the day to you referred to it we haven't seen all the data and we'll look for it but from what they've disclosed.

Some ways in the 40% to be able to get to.

Uh huh.

Len Schleifer: The 16-week regimen is what George referred to as exactly what ILEA gets in the all-pair study. So we don't see so far any evidence that there's anything more there than high-dose anti-VEGF therapy, higher than Lucentis on a molar basis. And so we'll have to wait and see, but one has to remember also that safety... George mentioned we have 30 million injections under our belt. That's a tremendous, tremendous safety database.

16 week regimen as George referred to was exactly what I leave in the old pair study. So we don't see so far any evidence we'll look at the data that day.

Is there anything more there than high dose.

Hey, Jeff therapy them higher than Lucentis.

And so we'll have to wait and see but one has to remember that also that safety. George mentioned, we have 30 million injections under her belt, that's a tremendous tremendous safety database and you can see what happens Theres been a reminder, just how important the safety side of this is so well.

Len Schleifer: And you can see what happens. There's been a reminder out there just how important the safety side of this is. So we'll see. We have great respect for them, but we don't see any data right now to suggest ANG2 blockade is playing any differentiated role, if any role at all. I don't know George.

See we have great respect for them, but we don't see any data right now to suggest and true blockade is playing any dip.

Differentiated role if any rule at all I don't know George the discoveries true you want it.

George D. Yancopoulos: Discover ends too. Do you want to comment further? Just very quickly, as Len said, we discovered the entire family of the angiopotens, and we obviously made the first and, we think, the best antibodies against these factors. We tried them in combination studies, but I think that there is no evidence at all from any of the faricimab data that there's any. It's sort of a regulatory trick to try to create a differentiated molecule, put both activities within one.

And Furthermore.

Just just very quickly as Len said, we discovered the entire family of the NGL proteins and.

And we obviously made the first and we think the best antibodies against these factors we tried them in combination studies I think that there.

There is no evidence at all.

From any of the first to map data that there is any additional benefit vesely and mechanism of action of the combined blockade of the Angiopoietin two I think that.

It's sort of a regulatory trick to try to create a differentiated molecule put both activities within one we think it's a better more.

George D. Yancopoulos: We think it's a better, more convincing, and frankly safer approach to actually test both blocking agents separately rather than combining them into one molecule when there's no benefit other than pure regulatory tricks for combining them into one molecule. The way we think that the data looks right now, it looks as if this is merely high-dose Lucentis, and the data that they've at least reported to date suggests similar data to what we see right now with ILEA.

Even seen frankly safer approach to actually test both blocking agents separately rather than combining in one molecule. When there was no benefit other than pure regulatory tricks for combining them into one molecule and the way.

We think that the data looks right now it looks as if this is merely high dose lucentis and the data that day that lease reported to date.

Yes, similar data to what we see right now currently with Eylea as Len mentioned, we are studies that show that up to 40% of patients.

George D. Yancopoulos: As Len mentioned, we have studies that show that up to 40% of patients can achieve 16-week dosing. I think the important add-on to it, of course, is that we have our upcoming studies with high-dose ILEA. So basically what people are doing, they're taking... Other molecules which, didn't fare as well, and they're high dosing them, okay, we're taking ILEA, and we're high dosing it, and it's already starting at a place where its duration and its efficacy and its safety seem to be leading, with really no evidence that the competition has anything significantly different, but now we're testing the higher dose to see whether we can make ILEA even better while still delivering the same safety and efficacy, so we're pretty excited about that, and as we said, we see there's no evidence that any of the competitors are providing anything different at this point. Rochelle, next question please.

Can achieve that.

16 week dosing I think the important add onto it is of course is that we have our upcoming studies with high dose eylea. So basically what people are doing they're taking.

Other molecules, which.

Didn't there as well and Theyre high dosing them.

We're taking eylea and where high dosing it and it's already starting at a place where its duration and its efficacy and safety.

Seem to be a leading with really no evidence that the competition has anything significantly different but now we're testing the higher dose to see whether we can make eylea, even better while still delivering the same safety and efficacy. So we're pretty excited about that and as we said we see there's no evidence.

Debt any of the competitors are providing anything different at this point.

Michelle next question please.

Operator: Our next question comes from Evan Seigerman with Credit Suisse. Your line is open.

Our next question comes from Evan Spiegel men with credit Suisse. Your line is open.

Evan Seigerman: Hi all, thank you so much for taking the question and thanks for all the work on the COVID-19 antibody. So, I'm looking at RAGN-1979. Assuming that the trial resumes near term, what do you really need to demonstrate in this Phase 2 potentially pivotal trial for submission next year? I believe you kind of highlighted that earlier in the year. I think that basically, what we have to do is just continue to see the efficacy and build on the duration that we've seen while continuing to also decrease any of the safety concerns and so forth.

Thank you so much for taking the question and thanks for all the work on the COVID-19 antibody. So I'm looking at origin and 1979, assuming that the trial resumed near term what do you really need to demonstrate in this phase II potentially pivotal trial for submission next year I believe you kind of highlighted that earlier in the year.

Yeah, I think that basically what we have to do is just continue to see the efficacy and build on the duration that we've seen.

While continuing.

Continuing to also decrease on any of the safety concerns and so forth, but I think the data as it stands right now would be very supportive of an approval as long as we can confirm it in larger numbers and importantly build on the already.

Evan Seigerman: But I think the data as it stands right now would be very supportive of an approval as long as we can confirm it in larger numbers and importantly build on the already very impressive duration, with some responses exceeding the year. So we're very excited about it. Obviously, there are always concerns and hurdles we have to get over. But assuming that we can get past them and we can resume enrollment and continue with the study, we hope that the data, as it matures and accrues, will continue to support that it's an important option that these patients can have.

Very impressive duration with some responses exceeding the.

The year timeframe. So we're very excited about it obviously theres always concerns and hurdles we have to get over but assuming that we can get past them and we can resume enrolment and continue with the study we hope that the data as it matures.

And our crews are where.

Continue to support that it's an important option that these patients can have.

George D. Yancopoulos: Thank you. Thank you. Thank you. Our next question comes from Erin Werber with Cohen. Your line is open. Yeah, hi.

Thanks, Mike Michelle next question please.

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

Operator: Yeah, hi, thanks for taking my question. George, maybe just for you, we're all very excited about the COSTIM strategy, and we'll get data at some point either late this year or next year, but how do you think COSTIM with a CD28 and also hitting the CD3 axis with a bispecific would work? If you could just give us a preview, and then just for Bob, for you, just the Regenco... One question, Jeroen, sorry All right, well, Len cut you off there.

Yeah, Hi, Thanks for taking my question George maybe just for you you were all very excited about the coast and strategy will get data at some point either late this year or next year, but how do you when you're thinking about close to them with the city of 28 and also hitting the reactions from the Bispecific how would that work. If you can just give us a preview and then just from <unk>.

Bob for you just the reject Cove one question your own sorry.

Okay.

I learned cut you off there, but just in terms of the co stims. So as we've shown in in some very high profile.

Erin Werber: But just in terms of the customs, so as we've shown in some very high-profile papers in science and science translational, basically, nature uses to activate T-cells to do their job, particularly, for example, to kill cells. They need signal one through the T-cell receptor itself, which is a CD3 is an important component of that. But they also need signal two, which some people refer to as a co-stimulatory signal. And so by combining, by specifics that involve CD3 engagement and by specifics that involve CD28 or co-stimulatory engagement you are simultaneously activating both signal 1 and signal 2 and we have shown rather compellingly in preclinical models that this really accentuates and really dramatically increases the ability of T-cells to kill the target itself Let me also remind you that PD-1 and other checkpoint inhibitors provide a break so you have signal 1 and signal 2 which are driving the cells to kill and then you can have a break signal that acts through checkpoints such as PD-1 so combining all three or combining them in pairwise fashion in animal models shows that you can just increase the amount of tumor killing that you get as compared with having just one of the approaches so we're just trying to understand what nature does and how nature optimizes the process and then mimic it with these natural approaches to biologics that can activate in a targeted fashion only on the tumor target cell depending on how well the targeting is, signal 1, signal 2, while releasing the break so the preclinical data is pretty compelling and we can only hope that we approach it with what we're going to see in the clinic and we do think that over the next year it's going to be very interesting to see how these dose escalation trials play out. A little bit past time, we still have 12 callers in the queue. We're going to try to get to two more and then we'll catch up with.

Papers in science in Science translational basically nature uses to activate T cells to do their job, particularly for example to kill cells. They need signal one through the T cell receptor itself, which is a C. D. Three is an important component of that but they also need Sig.

To which some people refer to as a co stimulatory signal and so by combining.

Bi specifics that involves CD three engagement and bi specifics that involves CD 28 or co stimulatory engagement you are simultaneously activating both signal one and signal two and we have shown rather compellingly in in preclinical models that this really.

Essentially weights and and really dramatically increases the ability of T cells to kill the target itself. Let me also remind you that.

The PD, one and other checkpoint inhibitors provide a break so you have signal one and signal two which are driving the cells to kill and then you can have a break signal that debt acts through checkpoints such as PD, one so combining all three or combining them in pair wise fashion.

In animal models shows that you can just increase the amount of tumor killing that you'd get as compared with having just one of the approaches. So we're just trying to understand what nature does and how nature Optimizes the process and then Mimi get with these.

Natural approaches to biologics that can activate in a targeted fashion only on the tumor target sales depending on how well the targeting is signal one signal too while releasing the break.

So the preclinical data is pretty compelling and we can only hope that we approach it with a with what we're going to see in the clinic and we do think that over the next year, it's going to be very interesting to see how these dose escalation trials play out.

We're a little bit past time, we still have 12 callers in the queue, we're going to try to get the two more and then we'll catch up with everyone else. Following the call next question Michelle.

George D. Yancopoulos: We'll catch up with everyone else following the call. Next question, Michelle. Our next question comes from Matthew Lucchini with BMO Capital.

Our next question comes from Matthew Luchini with BMO capital. Your line is open.

Operator: Your line is open. Hi. Great. Thanks for taking the question and fitting me in. I wanted to quickly come back to ILEA competitiveness, just try to understand a little.

Hi, great. Thanks for taking the question I'm getting warm.

They quickly come back to.

Competitive dynamics.

Just trying to understand a little bit on what your internal kind of market research, indicating about.

Matthew Lucchini: Our next question comes from Matthew Lucchini with BMO Capital. Your line is open.

And willingness to even really consider new drugs in other words, what maybe you could share a little bit of a perspective of what impact. The total excuse me may have experienced last year has had on their own.

Operator: Marion, do you want to take that? Sure. I'm happy to take it. Well, you know, I'll start with where you ended.

Their willingness to step away from our proven agent like Eylea.

Murray do you want to take that sure I'm happy to take it well you know I'll I'll start with where you ended I do think that the.

Marion McCourt: I do think that the experience of the Novartis launch reset the table on the importance of safety and, frankly, never assuming safety or efficacy for any category, let alone when you're, you know, injecting into someone's eye and, you know, seeking to save their vision. We look at the competitive dynamic, as you know, very, very thoroughly. And I do think that ILEA, during this period of time, the last couple of years, but certainly during the pandemic, the characteristics of, you know, breadth of indications, experience, the ability to treat and extend, now in a prefilled syringe for efficiency and throughput in the offices, and this remarkable safety and efficacy profile, you know, make it an incredibly compelling choice for retinal specialists and injectors.

Every inch of the Novartis lines, where you set the table on the importance of safety and frankly never assuming safety or assuming efficacy for any category, let alone when you are.

<unk> into someone's eye and seeking to save their vision.

We look at the competitive dynamic as you know very very thoroughly.

Do you think that idea during this period of time the last couple of years, but certainly during the pandemic.

Characteristics of breadth of indications experienced the ability to treat and extend now into pre filled syringe for efficiency and throughput in the offices and this remarkable safety and efficacy profile, you'll make it an incredibly compelling choice for retinal specialists.

And injectors, and we obviously, even within our own portfolio and look to improvements like the idea of high dose for the future the ability to treat and extend even further but obviously, we've you know very deliberately with our scientific team said very very high bar for competition.

Marion McCourt: You know, we obviously, even within our own portfolio, look to improvements like the ILEA high dose for the future, the ability to treat and extend even further, but obviously, we've, you know, very deliberately, with our scientific team, set a very, very high bar for competition.

Marion McCourt: I think that vision is so important. We all know it. We all treasure it, and I think that there's a hopefully, hopefully, new realization once again about how important it is and how a catastrophic event that causes permanent loss of vision can be so, so catastrophic and so damning. And I think that when you have such a safe and effective agent with such experience, one really has to take into consideration the risks, the potential catastrophic risks of trying new approaches, unknown safety risks with their potential catastrophic risks. All right, we have time for one more quick question.

I think that.

Vision is so important we all know it we all treasure it okay and I think that there is a a hopefully hopefully a new.

Our realization once again about how important it is and how our catastrophic.

Event that causes permanent loss of vision.

Can be so so catastrophic and so damning and I think that when you have such a safe and effective agent with such an experience.

One really had to take them.

Into consideration the risks the potential catastrophic risks of trying new approaches.

Unknown safety risks with their potential catastrophic risk.

Alright, we have time for one more quick question.

Operator: Our next question comes from Mohit Bansal with Citigroup. Your line is open.

Our next question comes from Mohit Bansal with Citigroup. Your line is open.

Mohit Bansal: Great, thanks for fitting me in and congratulations on the progress. In our conversations with experts, doctors did talk about the potential use of Tupixtent in milder patients given its safety. So to that end, do you need to do a clinical trial to get there, or do you think it is already happening to some extent at dermatologist offices? Thank you.

Great. Thanks for fitting me in and congrats on the progress.

In our conversations with experts people doctors did talk about the day.

The day should use off to fixed and in milder patients given given the safety. So to that end do you need to do clinical trials to get there or do you think it is already happening to some extent that debit largest offices. Thank you.

Marion McCourt: The profile today for Dupixent treatment is for patients with moderate to severe disease, both in atopic dermatitis and also for patients that require biologic asthma treatment. I'll let team members talk about additional clinical work in that component, but that is the focus of the population. As we discussed earlier, in the U.S. alone, we probably have about 2.2 million eligible patients just on the indications where we have approval today. But to your comment, what I hear time and time again from our physician prescribers and key opinion leaders is the remarkable safety profile based on a very specific mechanism of action and that confidence in being able to treat not only adults but now younger age groups where we have indications, for example, in atopic So, I think it's a great idea...

Okay.

The profile for.

Four depicts and treatment is for patients with moderate to severe disease. Both in atopic dermatitis and also for patients that require biologic asthma treatments.

Yeah I'll, let team members talk about you know additional clinical work to that component, but that is our focus as a population.

As we discussed earlier in the U S alone, we probably has about 2.2 million eligible patients just on the indications where we have approval today or to your comment what what I hear about time and time again from our physician prescribers and key opinion leaders is the remarkable safety profile based on.

Theyre very specific mechanism of action and that confidence in being able to treat not only adult and now the younger age groups. There will be have indications for example in atopic dermatitis, not only for adolescence, but pediatric patients down to six years of age.

So I think it's a great question and it reflects back on when this issue about penetration and so forth. It didnt take much market research to know how it depicts and was initially being used or have most drugs are used though he was approved for example in the moderate to severe population atopic dermatitis or physicians initially started with their toughest their hardest.

George D. Yancopoulos: So I think it's a great question and it reflects back on this issue about penetration and so forth. It didn't take much market research to know how Dupixan was initially being used or how most drugs are used though. He was approved, for example, in the moderate to severe population for atopic dermatitis. All physicians initially started with their toughest, their hardest, their more serious patients before then gradually going backwards in the treatment paradigm So I think that gradually, with more confidence, they're going to treat people who are on the more moderate side of things.

There are more serious patients before then gradually going backwards in the treatment paradigm and that is one of the reasons why we've we're only penetrated about 6% of the moderate to severe population. So I think that.

Gradually with more confidence, they're going to treat people who are on the more moderate side of things that said I think the point that debt the efficacy profile, but also the mechanism of action. The fact that you are probably in the long term, maybe benefiting the patient in terms of of slowing or.

George D. Yancopoulos: That said, I think the point that the efficacy profile, but also the mechanism of action, the fact that you are probably, in the long term, maybe benefiting the patient in terms of slowing or preventing the ultimate atopic march that occurs in so many patients demands that we figure out a way to take this product to earlier patients. That will, however, require additional studies. We're trying to figure out the best way to do it.

Preventing the ultimate a topic mark to that occurs and so many patients demands that we figure out a way to take this product to earlier patients. Those will however require additional studies were trying to figure out the best way to do it but I for one do you think that for example, a many more patients with much miles of asthma.

George D. Yancopoulos: But I, for one, do think that, for example, many more patients with much milder asthma or other milder forms of type 2 disease that, in many patients, is just going to get worse over time. We owe these patients. We have to figure out, through a clinical program, how to do the right studies, how to convince the FDA, and how to move this treatment back toward these earlier patients.

Or other milder forms of type two disease that we know in many patients is just going to get worse over time, we owe. These patients we have to figure out through a clinical program how to do the right studies, how to convince the FDA and how to move the street than back towards these earlier patients.

Thank you.

Operator: Thank you everyone for joining the call. Thank you for hanging in there a little longer than normal. Bob Landry and the investor relations team will be around after the call. We hope you enjoy your weekend.

Thanks, everyone for joining the call. Thank you for hanging in there a little longer than normal Bob Landry and the Investor Relations team will be around after the call. We hope you enjoy your weekend and please stay safe.

Operator: Enjoy your weekend. Please stay safe.

Operator: Ladies and gentlemen, this does conclude the program. You may now disconnect. Everyone, have a great day.

Ladies and gentlemen, this does conclude the program you may now disconnect everyone have a great day.

[music].