Q3 2021 Regeneron Pharmaceuticals Inc Earnings Call

Good day and thank you for standing by welcome to the Regeneron Pharmaceuticals third quarter earnings Conference call. At this time all participants are in a listen only mode. After the speaker presentation. There will be a question and answer session. Please be.

Thighs that today's conference is being recorded.

To ask a question during the session you will need to press star one on your telephone.

If you require any further assistance. Please press star and zero I would now like to hand, the conference over to your speaker today, Justin <unk> Vice President of Investor Relations. Please go ahead.

Thank you D D. Good morning, good afternoon, and good evening to everyone listening around the globe. Thank you for your interest in Regeneron Pharmaceuticals, and welcome to the third quarter 2021 conference call. An archive of this webcast will be available on our web site.

Joining me today on the call our Doctor Leonard Schlafer, founder President and Chief Executive Officer, Dr. Georgia, Koppel is co founder President and Chief Scientific Officer, Marian Mccourt Executive Vice President and head of commercial and Bob Landry Executive Vice President and Chief Financial Officer.

After our prepared remarks, we will open the call for Q&A.

I'd also like to remind you that remarks made on today's call include forward looking statements about regeneron such statements may include but are not limited to those related to regeneron and its products and business financial forecasting guidance development programs and related anticipated milestones collaborations finances regulatory matters payer coverage.

In reimbursement issues intellectual property pending litigation in 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 description of these and other material risks can be found in regeneron filings with the United States Security.

And exchange Commission, including its Form 10-Q for the period ended September 30th 2021, which we filed with the SEC earlier today Regeneron does not undertake any obligation to update any forward looking statements whether as a result of new information future events or otherwise. In addition, please note that gap and non-GAAP measures will be disc.

<unk> in today's call.

Information regarding our use of non-GAAP financial measures and a reconciliation of those measures to gap is available in our financial results press release, which can be accessed on our website.

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

Thank you Justin and before I begin my remarks, let me just note that this may be justin's last call. It may not be at least in the position of I R. I. He is making a transition. He has decided he wants to make the news not just report and explain the news and he is moot.

Moving over to a commercial organization. So we're very excited but we're not letting him go until his replacement is fully in place so when you're making a movie from Justin and this will let you may not he Justin has done a remarkable job he's quick to point out to me that when he joined the company the stock was only around.

300 Bucks and now he says it's significantly higher just and we thank you for your great service.

Turning to our business and we turned in another strong performance in the third quarter, which was marked by significant double digit top and bottom line growth and continued operating leverage.

This was all possible as a result of the truly exceptional execution by our colleagues across the entire company from on the production commercial and support teams. Despite the challenges that we all faced imposed by the COVID-19 pandemic.

Our core business of Eylea, Dupixent and Libtayo all contributed solid underlying growth. Additionally, we secured a third supply agreement with the United States government fully Genco, our investigation will antibody cocktail for treating and preventing COVID-19 in certain.

Populations with initial deliveries fueling additional growth momentum in the court.

And R&D abroad, and growing pipeline, which now includes more than 30 clinical stage candidates with many more expected to enter the clinic in short order continues to advance new innovations to secure a longterm growth potential.

Importantly, a pipeline continues to be largely composed and comprised of internal innovation, but increasingly this supplemented by external relationships that bring in novel modalities, including CRISPR and S. Irna, creating unique treatment options and combination approaches has.

George will outline momentarily.

In the third quarter, beginning with Hi, Leah Global net sales of Eylea, what 2.4 billion growing 15% compared to the prior year U S. Eylea sales grew 12%, reflecting recovery of the anti VEGF category and share games as the leading anti VEGF treatment.

For retinal diseases.

We see the strength of Eylea, an opportunity for steady growth continuing despite potential upcoming competition from which we currently do not see any disruptive or game changing new entrants to the anti VEGF space put treating retinal diseases dupixent.

Continues to be remarkable and delivering commercially and clinically of course, a wide spectrum of type two inflammatory diseases in the third quarter Global net sales grew 55% to 1.7 billion gross contributions from inside and outside of the United States continue to <unk>.

Prove operating leverage in our lives with Santa Fe.

Moreover, we announce positive results from for Phase three Registrational studies in recent months one in very young children with a tap of dermatitis and three in the potential new indications of eosinophilic esophagitis, Corrado, Nigel arris, and chronic spontaneous or the carrier and.

October the F. D. A expand that are asthma label to include children, aged six to 11, a testament to not only the efficacy, but also the safety of Dupixent and the chronic treatment of type two inflammatory disease with several other disease opportunities in clinical development such.

S C O P D. The expansion possibilities are significant for this remarkable medicine that is already changing the lives of hundreds of thousands of patients.

An oncology Libtayo global net sales 120 million and grew 24%.

Despite the challenges imposed on the college market by COVID-19, we're working hard as the leader in cutaneous squamous cell carcinoma, and progressing in a basal cell carcinoma and lung cancer launches. We are also preparing for potential launch in 2022 and the much larger opportunity of Libtayo come.

Combined with chemotherapy and non small cell lung cancer.

<unk> continues to grow in importance with increased utilization in the treatment of COVID-19. The F. D. A has accepted under priority review, our biologic license application for the treatment and prophylaxis of COVID-19 in certain patients were also under review to expand the.

Emergency use authorization for Jane Kolb in certain hospitalized patients and for pre exposure prophylaxis outside of the United States I'm antibody cocktail has received a full approval in Japan is conditionally approved in Australia, and the U K and has emergency or temporary pants.

Chemical authorizations currently in place in more than 40 other countries.

We janko has the potential for a broad range of prevention and treatment applications from Preexposure prophylaxis to treatment of infected hospital hospitalized patients give.

Given the anticipation of new coven infections overtime increased utilization of Bridgend co inappropriate cases, and the need for prophylaxis immunocompromised individuals we anticipate an ongoing role for adjourn Cove, if global demand warrants we have the capacity.

To produce between four to 5 million 1.2 Gram doses in 2022, excluding any further supply contributions from road.

To conclude as we close out 2021, I growth momentum is strong and our outlook for continued growth fueled by the breadth and depth of a pipeline is bright.

Now I will turn the call over to George.

Thank you Lynn.

I'll pick up where you left me uhm with the region Cove story as.

Has learned mentioned a robust COVID-19 development program involving more than 25000 people to date is provide compelling evidence that region calls has the potential to be used for viewers prevention and treatment applications from preexposure prophylaxis to treating hospitalized patients.

In the United States Region Code is currently authorized under an E way and also being reviewed for full F. D. A approval for the treatment and prevention of COVID-19, and certain patients with an action date of April 13th of 2022.

At Regeneron, we all appreciate it widespread vaccination is the best way to broadly protect as many people as possible from COVID-19, but recent research, but also reveals some important gaps in coverage provided by the vaccines, leaving some individuals uniquely vulnerable, particularly the several million immunocompromised people in the United.

<unk> alone remain prisoners of the pandemic.

First many of them you know compromised population responds suboptimal or not at all to vaccination, even after booster shots set.

Second breakthrough infections in the general population still occur after vaccination, meaning that email compromise people will continue to be at risk of encountering infected individuals.

Even within a highly vaccinated population.

Therefore, we believe that region code could be of particular importance for these immunocompromised individuals who remain under unprotected and also are at highest risk for developing the most severe COVID-19 disease. This includes people with certain hematologic, Kansas for example, and phone was leukemias and myeloma and people who take certain immunosuppressive.

Since for diseases, such as multiple sclerosis, and rheumatoid arthritis for Oregon transplant recipients and for those with primary immune deficiencies.

In the United States Regeneron submitted data in a request to the F. D. A to expand the existing emergency use authorization a region Cove to include chronic prevention back in April further, reflecting regeneron commitment to the immuno compromised recently began a big trial to optimize region code prophylaxis in this population.

Including a valuation of extended dose.

Ah current region code cocktail routines pumped activity against well known bearings of interest, including the Delta beer.

The virus continues to mutate any Bob and sauce as we have previously discussed we were advancing novel anti spike protein antibody cocktail.

Into clinical development, we have done so proactively in the case of the novel innovative antibody cocktail it retains potency against new potential bearings is required in the future.

Moving to ophthalmology reported encouraging top line data of high dose of Liberal set in the phase two can Dallas study and wet AMD. The small proof of concept study medicine primary efficacy endpoint higher proportion of patients in the eight milligram of flips up group had no retinal fluid compared to patients treated with the currently prove to me.

Operator: I would like to hand the conference over to your speaker today, Justin Halko, Vice President of Investor Relations. Please go ahead.

The Grandma Leah dose in week 16.

There were no safety signals observed in the comparison to the currently approved Eylea two milligram dose two large phase three trials and wedding M. D. M. G M evaluating the high dose flipper set and dosing animals of every 12 weeks and every 16 weeks are fully enrolled are expected to report results from the second half of 2022.

Operator: Please go ahead.

Justin Halko: Thank you, Dede. Good morning, good afternoon, and good evening to everyone listening around the globe. Thank you for your interest in Regeneron Pharmaceuticals and welcome to the third quarter 2021 conference call.

Justin Halko: The archive of this webcast will be available on our website.

Justin Halko: 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.

These days three days will be crucial to understanding overall efficacy safety inconvenience of high dose of Bluebird Sir.

Moving onto Dupixent, the remark with clinical success of Dupixent across so many different allergic or type too inflammatory diseases validates our earliest longstanding hypothesis.

Justin Halko: After our prepared remarks, we will open the call for Q&A. I would also like to remind you that remarks made on today's call include forward-looking statements by Regeneron. Such statements may include, but are not limited to, those related to Regeneron and its products and business, financial forecasts and guidance, development programs and related anticipated milestones, collaborations, finances, regulatory matters, payer coverage and reimbursement issues, intellectual property, pending litigation, and other

That this that these conditions are all driven by over activation of the same fundamental immunologic pathway that is deemed to looking for a day or two pathway, which is effectively blocked by two picks it with a disease manifests as asthma chronic line of sight is with nasal polyps in the Airways.

Justin Halko: and Competition. Each forward-looking statement is subject to risks and uncertainties that

As a topic dermatitis or perrigo Nigel Harrison the skin is eosinophilic esophagitis in the G. I tract are clinical data.

Justin Halko: That could cause actual results and events to differ materially from those projected in that statement. A more complete description of these and other material risks can be found in Regeneron's filings.

Have demonstrated an important impact of Dupixent on these men in conditions that initially did not seem related.

Only the past few months to pick some demonstrated positive results in four separate pivotal studies. This is a tremendous accomplishment stemming from the vision and dedication and partying and is great news for patient suffering from these type too inflammatory diseases and.

Justin Halko: with the United States Securities and Exchange Commission, including its Form 10-Q for the period.

Justin Halko: Regeneron does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. In addition, please note that GAAP and non-GAAP measures will be discussed in today's call. Information regarding our use of non-GAAP financial measures and a reconciliation of those measures to GAAP is available in our financial results press release, which can be accessed on our website. Once our call concludes, Bob Landry and the IR team will be available to answer further questions.

And a recent phase three trial and atopic dermatitis in infants and children as young as six months of age two picks it meant all primary and secondary endpoints as well as a lower observer of your skin infections in the Dupixent group compared to placebo.

Detailed results from this trial will be presented at a future medical meeting and data will be submitted to the F. D. A by the end of this year. These data reinforced the well established efficacy and safety profile of Dupixent with over a quarter million patients treated the date.

Justin Halko: With that, let me turn the call over to our President and Chief Executive Officer, Dr. Len Schleifer.

We also reported recent phase III data with two picks in eosinophilic esophagitis or E O E. A progressive disease that damages the sofa esophagus. It impairs the ability to swell more than a third of the patients you know a trial had manifestations of this disease. So severe that they previously had to undergo.

Leonard S. Schleifer: Thank you, Justin. And before I begin my remarks, let me just note that this may be Justin's last call. It may not be, at least in the position of IR. He is making a transition. He's decided he wants to make the news, not just report and explain the news.

Into Scopic delays dilation of the esophagus for symptomatic relief you know our study patients taking weekly depicts and had an approximate 24 point improvement on the zero 84, Dysphasia symptoms questionnaire, representing a 64% improvement compared to a 14 point improvement for placebo.

This update reinforced previously reported phase three results, but which is a 52 week follow up results were recently presented at the United European Gastroenterology week virtual.

2021 Congress completion of a regulatory filing for E O N adolescents and adults is planned for early 2022.

We also recently reported positive results for depicted from our phase through trial and yet another inflammatory skin condition known as Prurigo, Nigel errors and under diagnose disease characterized by extreme itch and skin nudges. The trial met its primary and all to secondary endpoints and compassion to placebo, including reduction each from baseline.

Leonard S. Schleifer: And he is moving over to our commercial organization. So we're very excited, but we're not letting him go until his replacement and bottom line growth and continued operating leverage. This was all possible as a result of the truly exceptional execution by our colleagues across the entire company, from R&D to production, commercial, and support teams, despite the challenges that we all faced imposed by the COVID-19 pandemic. Our core businesses of ILEA, Dupixent, and Leptio all contributed solid underlying growth.

At 12, and 24 weeks, achieving clear skin and improvements in quality of life.

The second trial in for regular Nigel hours is fully enrolled and is expected to read out in the first half of 22 with regulatory submissions plan for the same year.

Leonard S. Schleifer: Additionally, we secured a third supply agreement with the United States government for Regenco, our investigational antibody cocktail for treating and preventing COVID-19 in certain populations, with initial deliveries fueling additional growth momentum in the quarter. In R&D, our broad and growing pipeline, which now includes more than 30 clinical stage candidates, with many more expected to enter the clinic in short order, continues to advance new innovations to secure our long-term growth potential. Importantly, our pipeline continues to be largely composed and comprised of internal innovation, but increasingly, it is supplemented by external relationships that bring in novel modalities, including CRISPR and siRNA, creating unique treatment options and combination approaches, as George will outline momentarily in the third quarter. Beginning with ILEA, global net sales of ILEA were $2.4 billion, growing 15% compared to the prior year.

If all these exciting phase three day to lead to regulatory approvals Dupixent would be approved for six different allergic or type too inflammatory disease indications, including patients as young as six months.

Moving to Libtayo, an oncology positive faithfully date of Libtayo in combination with chemotherapy. The first line advanced non small cell lung cancer represented at the asthma 2021 me. These.

These data Martha.

Is one of only two P D one or P. D. L. One inhibitors to demonstrate positive face the results and first line non small cell lung cancer irrespective of histology, both as mono therapy and in combination with chemotherapy. These.

These libtayo studies were conducted in a patient population that included difficult to treat disease characteristics that reflects everyday clinical practice.

We are rapidly progressing towards regulatory submission for those type of chemotherapy combination across Histologies and P. D O one expression levels, which could unlock an opportunity to help a larger population of lung cancer patients.

Turning to hematology at the upcoming American Society of Hematology annual meeting for Ash, we'll provide updates toward developing hematology portfolio <unk>.

Leonard S. Schleifer: U.S. ILEA sales grew 12%, reflecting recovery of the anti-VEGF category and share gains as the leading anti-VEGF treatment for retinal diseases. We see the strength of ILEA, and an opportunity for steady growth to continue, despite potential upcoming competition from which we currently do not see any disruptive or game-changing new entrants to the anti-VEGF space for treating retinal diseases. Dupixent continues to be remarkable in delivering results commercially and clinically across a wide spectrum of type 2 inflammatory diseases. In the third quarter, global net sales grew 55% to $1.7 billion.

And an oral presentation, we will provide a data update for a potentially registrational first and human trial of region 50, 458 P. C made by <unk> three by specific antibody test in patients with heavily pretreated multiple myeloma.

<unk> 50, 458 to be a major advance and treatment of patients with failed several prior lines of therapy, but the potential utility of our be swimming talking Bispecific is not limited to this patient population.

We will discuss our data further development plans at our virtual ash investor in bed scheduled for Monday December 13th.

Regarding our do next demand R. C. D 20 by C. Three Bispecific, we're pleased with <unk> with recruitment in a potentially pivotal trial since the partial clinical hall was lifted earlier this year.

Leonard S. Schleifer: Growth contributions from inside and outside of the United States continue to improve operating leverage in our alliance with Santa Fe. Moreover, we announced positive results from four Phase III registrational studies in recent months, one in very young children with atopic dermatitis, and three in the potential new indications of eosinophilic esophagitis, corrigonodularis, and chronic spontaneous urticaria. In October, the FDA expanded our asthma label to include children aged 6 to 11, a testament to not only the efficacy but also the safety of Dupixent in the chronic treatment of type 2 inflammatory disease.

Exploration of subcutaneous formulation of your next day Ma'am is on track to start by the end of this year, we are planning to initiate border phase III programs in 2022 or.

Ah Bispecific development <unk>.

Program for solid tumors is progressing.

With our unique approaches, including the muck 16 by C. Three by specific as monotherapy ovarian cancer as well as in combination with with tile or with our muck 16 by C. D 28 Kosta <unk>.

In addition, we expect to have initial data with our P. SMA bye see the 20th post them in patients with prostate cancer in 22 22.

We're also excited about our Egfr by city, 20th costume clinical program across multiple EGF high Kansas settings, including lung cancer as well as a clinical stage met by met Bispecific and are met by met antibody drug conjugate presenting a new for a for regeneron into the realm of drug consequence linked to a potentially.

Leonard S. Schleifer: With several other disease opportunities in clinical development, such as COPD, the expansion possibilities are significant for this remarkable medicine that is already changing the lives of hundreds of thousands of patients. In oncology, Libtio global net sales were $120 million and grew 24%.

Best in class by specific handbags.

In conclusion for oncology, we're approaching an important new face for Regeneron, we have several novel Phase one two programs in clinical development with more expected in the coming months. We also have large phase three studies plane such as a lack three libtayo combination.

Leonard S. Schleifer: Despite the challenges imposed on the oncology market by COVID-19, we're working hard as the leader in cutaneous squamous cell carcinoma and progressing in our basal cell carcinoma and lung cancer programs. We are also preparing for a potential launch in 2022 in the much larger opportunity of Libtio combined with chemotherapy in non-small cell lung cancer. Regencove continues to grow in importance with increased utilization in the treatment of The FDA has accepted under priority review our biologic license application for the treatment and prophylaxis of COVID-19 in certain patients. We are also on review to expand the emergency use authorization for GENCOV in certain hospitalized patients and for pre-exposure prophylaxis.

The first line advanced melanoma against the Pemble Ism had mono therapy compare as well as large registrational programs for a hematology oncology Biospecifics. We're excited about the potential that these important investments in our portfolio they bring to patients.

I would like to conclude with a regeneron genetics medicines and our collaboration updates very.

Uniquely positioned to combine products of our established biologics portfolio and emerging findings from our genetics medicines efforts.

As part of our collaboration with Alnylam, we're looking forward to multiple updates on our C. Five program at the already mentioned Ash meeting, we will show first and human data for our C. Five antibody <unk>, Alabama in combination with the C. Five inhibiting S. Irony. Some disarray will present initial results in healthy volunteers, which supports develop.

Leonard S. Schleifer: Outside of the United States, our antibody cocktail has received full approval in Japan, is conditionally approved in Australia and the UK, and has emergency or temporary pandemic authorizations currently in place in more than 40 other countries. Regencov has the potential for a broad range of prevention and treatment applications, from pre-exposure prophylaxis to treatment of infected hospitalized patients. Given the anticipation of new COVID infections over time, increased utilization of Regencov in appropriate cases, and the need for prophylaxis in immunocompromised individuals, we anticipate an ongoing role for Regencov.

<unk> of the of this first of its kind combination of an antibody and an essay RNA therapeutic early data on S. Irony monotherapy immediate C. Five knock down did not achieve complete terminal complement blockade, which is necessary for adequate disease control.

And panic or paroxysmal nocturnal hematuria and the antibodies specific for the same target protein could provide patients with a lower dose therapy and a more convenient extended dosing regimen, while providing more complete C. Five inhibition, resulting better efficacy and less breakthrough come out of this.

We have also recently initiated phase three study testing to see five antibody and S. I earn a combination in myasthenia gravis for P. N H starting next year, we are planning to test our combo in both naive and switch patients tested against standard of care therapies, including Rubel is revenue Lizardman and activism in this study is that the.

Leonard S. Schleifer: If global demand warrants, we have the capacity to produce between four and 5,000,001.2 gram doses in 2022, excluding any further supply contributions from Roche. To conclude, as we close out 2021, our growth momentum is strong, and our outlook for continued growth, fueled by the breadth and depth of our pipeline, is bright. Now, I will turn the call over to George.

Tempted to show troop benefit of the combination approach for the treatment of this disease.

Also in collaboration with Alnylam some of our initial genetic talk discoveries are reaching the stage of clinical readouts for non alcoholic Seattle, hepatitis or Nash, a disease, where finding compelling treatment options has been difficult. We're using the <unk> approach to silence a gene we identified as a potential target recall.

George D. Yancopoulos: Thank you. I'll pick up where you left me with the Regencove story. As Len mentioned, our robust COVID-19 development program involving more than 25,000 people to date has provided compelling evidence that RegenCo has the potential to be used for various prevention and treatment applications, from pre-exposure prophylaxis to treating hospitalized patients. In the United States, Regencov is currently authorized under an EUA and is also being reviewed for full FDA approval for the treatment and prevention of COVID-19 in certain patients, with an action date of April 13th, 2022.

We discovered that people with a protective HST 17 be 13 gene theory have a 30% to 70% lower us of chronic liver disease, a collaborator Alnylam will show initial healthy volunteers safety data for the L. An island H S D V.

The H S. D 17 be 13 targeting S. Arnie at your upcoming R&D day later this month.

Filing October the Regeneron genetics and to publish it man script, Nishu, which highlight achievement of the Marshall Ah sequencing.

Almost half a million X films from the UK Biobank database. This nature paper for the first time describes rare variants of genes that could be potential drug targets for diseases, such as hypertension diabetes, asthma, and others and with that I will turn the call over to marriage.

George D. Yancopoulos: At Regeneron, we all appreciate that widespread vaccination is the best way to broadly protect as many people as possible from COVID-19. But recent research also reveals some important gaps in coverage provided by the vaccines, leaving some individuals uniquely vulnerable, particularly the several million immunocompromised people in the United States alone who remain prisoners of the pandemic. First, many of the immunocompromised population respond suboptimally, or not at all, to vaccination, even after booster shots. Second, breakthrough infections in the general population still occur after vaccination, meaning that immunocompromised people will continue to be at risk of encountering infected individuals, even within a highly vaccinated population.

George D. Yancopoulos: Therefore, we believe that RegenCOVE could be of particular importance for these immunocompromised individuals who remain unprotected and also are at highest risk for developing the most severe COVID-19 disease. This includes people with certain hematologic cancers, for example, lymphomas, leukemias, and myeloma and people who take certain immunosuppressive medicines for diseases such as multiple sclerosis and rheumatoid arthritis, for organ transplant recipients, and for those with primary immunodeficiency, In the United States, Regeneron submitted data and a request to the FDA to expand the existing emergency use authorization of Regencov to include chronic prevention back in April.

Thank you George I third quarter business performance demonstrates the strength of our commercial portfolio, we are executing well on the inland brands enter maximizing opportunities for diversified and sustainable credit your ongoing lunches first I will highlight recent achievements with Virgin curve I COVID-19 antibody cocktail, which is avail.

Alabama in the U S under emergency use authorization by the F D a and the third quarter U S. Net sales for 677 million primarily based on initial deliveries of our third government agreement, which was announced in mid September demand for <unk> accelerated sharply over the third quarter at this.

Promising treatment option continues to help fight the storage in COVID-19 cases, Virginia code is increasingly seen as standard of care for outpatient treatment and post exposure prophylaxis inappropriate patients are field educators continue to support key stakeholders and healthcare systems administration sites, well COVID-19.

Cases have thankfully decreased over the last several weeks demand for region code remains high with many patients receiving treatment <unk> has arrived therapeutic application and current and potential future indications across the spectrum of disease from Preexposure prevention hospitalization, we look forward to the F D. A.

George D. Yancopoulos: Further reflecting Regeneron's commitment to the immunocompromised, we recently began a large trial to optimize regencode prophylaxis in this population, including evaluation of extended doses. Our current Regen-Co cocktail retains potent activity against all known variants of interest, including the Delta variant. However, the virus continues to mutate and evolve, and thus, as we have previously discussed, we are advancing a novel anti-spike protein antibody cocktail for clinical development.

Decision on an application for a full approval expected in April of 2022.

Andriy Jenkins, we delivered strong growth from our core business in the third quarter, starting with idea third quarter Global net sales crew, 15% year over here to more than 2.4 billion in the U S. Net sales K, 12% year over year to nearly 1.5 billion based on category recovery and.

George D. Yancopoulos: We have done so proactively in the case that a novel innovative antibody cocktail that retains potency against new potential variants is required in the future. Moving to ophthalmology, we reported encouraging top-line data from a high dose of filbicep in the Phase II Candela study in wet AMD. This small proof-of-concept study met its primary efficacy endpoint. A higher proportion of patients in the 8 mg filbicep group had no retinal fluid compared to patients treated with the currently approved 2 mg ILEA dose at week 16. There were no safety signals observed in comparison to the currently approved ILEA 2 mg dose.

Earliest competitors share games.

Secured nearly 50% of the overall category and over 75% of the brand of category based on our overall platform is efficacy safety inconvenience.

There are positive early indicators from our unbranded direct to consumer campaign that educates patients with diabetic eye disease on the importance of vision care redness specialize have applauded our efforts encouraging diabetic patients to seek treatment to prevent irreversible vision loss.

At least competitive profile, coupled with favorable underlying demographic trends give us confidence and regeneron ongoing leadership position and retinal diseases.

George D. Yancopoulos: Two large phase 3 trials in wet AMD and DME evaluating the high dose of FlibriSep in dosing intervals of every 12 weeks and every 16 weeks are fully enrolled and are expected to report results in the second half of 2022. These phase 3 data will be crucial to understanding overall efficacy, safety, and convenience of the high dose of FlibriSep. Moving on to depicts

Turning to look tile global net sales for 120 million in the U S. Net sales reached 78 million. Despite continued cause it impacts on new patient starts with new indication lunches at early stages. The vast majority of sales came from advance kitchen, you squamous cell carcinoma or C. S C.

George D. Yancopoulos: The remarkable clinical success of Dupixent across so many different allergic or type 2 inflammatory diseases validates our early and long-standing hypothesis that these conditions are all driven by over-activation of the same fundamental immunologic pathway, that is, the interleukin-4 and 13 pathway, which is effectively blocked by duplication. Whether the disease manifests as asthma or chronic rhinocitis with nasal polyps in the airways, as atopic dermatitis or prurigo nodularis in the skin, or as eosinophilic esophagitis in the GI tract, our clinical data demonstrate an important impact of Dupixent on these many conditions that initially did not seem related.

<unk> <unk> is the number one systemic treatment.

On our success in C. S. C. C. We are quickly establishing reptile as standard of care in advance basal cell carcinoma for patients in the second line setting or were ahead check inhibitor is not appropriate and lung cancer. We are working to secure physician experience, but the tile S. A competitive monotherapy treatment option.

We look forward to the potential chemotherapy combination approval, which would unlock the much larger paper first one patients eligible for anti P. D. One.

Briefly turning to have cheese, which is now being used to treat more patients than the prior standard of care. We continue to see initiations input switch a new category of patients illustrating how are innovative patient identification efforts can be used to support those with H O S H and in the future.

George D. Yancopoulos: In only the past few months, Dupixent demonstrated positive results in four separate pivotal studies. This is a tremendous accomplishment stemming from the vision and dedication of our team, and it's great news for patients suffering from these type 2 inflammatory diseases. In a recent phase 3 trial of atopic dermatitis in infants and children as young as 6 months of age, Dupixit met all primary and secondary endpoints, as well as a lower observed rate of skin infections in the Dupixent group compared to placebo.

The rare diseases.

And finally to pick sent in the third quarter global that sounds good 55 per cent you over here to 1.7 billion in U S. Net sales give 48% to 1.3 billion is gridspace, Kevin across all approved indications with new patients start above pre COVID-19 levels.

George D. Yancopoulos: Detailed results from this trial will be presented at a future medical meeting, and data will be submitted to the FDA by the end of this year. These data reinforce the well-established efficacy and safety profile of duprexin, with over a quarter million patients treated to date. We also reported recent phase three data with dupixan and eosinophilic esophagitis, or EOE, a progressive disease that damages the esophagus and impairs the ability to swallow. More than a third of the patients in our trial had manifestations of this disease so severe that they previously had to undergo endoscopic dilation of the esophagus for symptomatic relief. In our study, patients taking weekly dupixan had an approximate 24-point improvement on the 0 to 84 dysphagia symptoms questionnaire, representing a 64% improvement compared to a 14-point improvement for placebo.

In a topic dermatitis prescribing trends are strong across the spectrum of moderate to severe disease, including adolescence and pediatric patients. It takes and continues to capture market grade is based on well established efficacy and safety.

His current indications and unmatched physician and patient experience.

<unk> continues to be substantial potential growth in atopic dermatitis, including in children as young as six months in age and more broadly intermetallic <unk> with new potential indications of chronic spontaneously to kayak and Pryor naturalize and respiratory disease depicts and continues to surpass recent competitive biological lunches.

And asthma, we see ongoing potential to differentiate to pick sent to its competitive profile and label expansion as the market recovers from Covid when asthma related emergency room visits for down nearly 50% are launching pediatric asthma is underway extending his treatment option 275000.

George D. Yancopoulos: This update reinforced previously reported Phase 3 results, for which the 52-week follow-up results were recently presented at the United European Gastroenterology Week virtual 2021 Congress. Completion of our regulatory filing for EOE in adolescents and adults is planned for early 2022. We also recently reported positive results for Dupixen from our phase 3 trial in yet another inflammatory skin condition known as Pharyngonodularis, an underdiagnosed disease characterized by extreme itch and skin knots. The trial met its primary and all key secondary endpoints in comparison to placebo, including reduction in itch from baseline at 12 and 24 weeks, achieving clear skin, and improvements in quality of life.

<unk> in the U S is suffer from this often debilitating disease. She picks. This label. It was also recently updated to include an additional marker of type two inflammation called female which extends the eligible population beyond his with high as soon as Alec levels. In addition to pick sent can be prescribed for steroid dependant asthma.

I listen to send us all levels and nasal polyps, we continued to see growth like <unk>, leading the market. Despite new competition. He picks and continues to be the preferred choice of and cheese, an allergist regardless of prior surgery.

In summary, our commercial team continues to deliver strong growth across the portfolio with differentiated brands ongoing a potential future lunches. We remain on track for long term growth now I'll turn the call over to Bob.

George D. Yancopoulos: The second trial in Parigo Nodularis is fully enrolled and is expected to read out in the first half of 2022 with regulatory submissions planned for the same year. All these exciting phase 3 data lead to regulatory approval. PIXEN would be approved for six different allergic or type 2 inflammatory disease indications, including patients as young as six months. Moving to Leptile and Oncology.

Thank you Marilyn my comments today on Regeneron financial results and outlook will be on a non-GAAP basis, where applicable.

In the third quarter Regeneron once again delivered strong top and bottom line growth on increasingly diversified revenue streams with contributions from Virgin Cove, and a robust core business.

George D. Yancopoulos: Positive phase 3 data of Leptio in combination with chemotherapy and first-line advanced non-small-cell lung cancer were presented at the ASMO 2021 meeting. These data mark Lipsayo as one of only two PD-1 or PD-L1 inhibitors to demonstrate positive phase 2 results in first-line, non-small-cell lung cancer, irrespective of histology, both as monotherapy and in combination with chemotherapy. These leptile studies were conducted in a patient population that included difficult-to-treat disease characteristics that reflect everyday clinical practice.

For the third quarter total revenues grew 51% year over year to 3.5 billion.

Total diluted net income per share grew 84% year over year to $15.37 on net income of 1.8 billion.

Excluding revenues related to the COVID-19, anybody cocktail total revenues grew 18% versus the prior year.

Starting with Virgin Cove.

George D. Yancopoulos: We are rapidly progressing towards regulatory submission for the entire chemotherapy combination across histologies and PD-L1 expression levels, which could unlock an opportunity to help a larger population of lung cancer patients. Now, turning to hematology. At the upcoming American Society of Hematology Annual Meeting, or ASH, we will provide updates on our developing hematology portfolio. In an oral presentation, we will provide a data update for our potentially registrational first-in-human trial of Regen5458, our BCMA by CD3 bispecific antibody tested in patients with heavily pretreated multiple myeloma.

In the third quarter, we recognized 677 million of U S. Net sales, which consists largely of the initial deliveries of approximately 300000 doses to the U S government under the new 1.4 million dose contract as announced in September or collaborator Roche record.

Sales of the COVID-19, anybody cocktail known as <unk> outside the U S.

In accordance with our Roche agreement.

As a true a payment for global profits, we recorded an additional 127 million as Roche collaboration revenue.

George D. Yancopoulos: Regen5458 could be a major advance in the treatment of patients who have failed several prior lines of therapy, but the potential utility of our BCMA-targeted bispecific is not limited to this patient population. We will discuss our data and further development plans at our virtual ASH investor event, scheduled for Monday, December 13th.

In the fourth quarter, we expect to deliver approximately 800000 doses over a gym cold in the U S out of <unk>, which Roche will supply approximately half of these doses, we will record all Virgin Cove U S. Net product sales given them mixed up manufactured product supply to the market by Roche and Regeneron.

The true up payment for global profits is expected to result in zero Roche collaboration revenues in the fourth quarter. The remaining doses from the U S. Government contract are expected to be delivered in the first quarter of 2022.

George D. Yancopoulos: Regarding our next demand, our CD20 by CD3 by CD4 by CD4 by CD4 by CD4 by CD4 by CD4 by, We are pleased with recruitment in our potentially pivotal trial since the partial clinical hold was lifted earlier this year. Exploration of Subcutaneous Formulation of Utrin-X Demand is on track to start by the end of this year. We are planning to initiate Border Phase III programs in 2020, or Buy Specific Development.

I will now move toward Bayer collaboration X U S. Eylea net product sales reported to us by bear with 931 million for the third quarter of 2021, representing growth of 19% on a reported basis and 18% on a constant currency basis.

George D. Yancopoulos: The Program for Solid Tumors is progressing. With our unique approaches, including the MUC-16 by CD3 bispecific asmonotherapy in ovarian cancer as well as in combination with Leptile or with our MUC-16 by CD28 co-synthesis. In addition, we expect to have initial data with our PSMA by CD20 in patients with prostate cancer in 2022.

Total Bayer collaboration revenue was 365 million of which we recorded 351 million for our share of net profits from my Lea sales outside the U S.

Total San Iffy collaboration revenue was 582 million in the third quarter of 2021, our share of the profits from the commercialization of depicts it in clubs or was 387 million, which compares favorably to our share of profits of $213 million in the prior year. We also recognized a 50 million dollar sales mine.

George D. Yancopoulos: We are also excited about our EGFR by CD28 CoStim Clinical Program across multiple EGF-high cancer settings, including lung cancer, as well as our clinical stage met-by-met bispecific and our met-by-met antibody drug conjugate, presenting a new foray for Regeneron into the realm of drug conjugates linked to our potentially best-in-class bispecific antibody. In conclusion, in oncology, we are approaching an important We have several novel Phase I-II programs in clinical development, with more expected in the coming months.

Stone payment related to achievement of 1.5 billion of X U S sales for the collaboration on a rolling 12 month basis.

Moving on to operating expenses R&D decreased slightly to 592 million, primarily due to lower spending a Virgin Cove development as compared to the third quarter of 2020.

George D. Yancopoulos: We also have large Phase III studies planned, such as our LAG-III-Liptov combination for First-Line Advanced Melanoma against a Pembrolizumab Monotherapy Comparator, as well as large registrational programs for our hematology oncology vice. We're excited about the potential that these important investments in our portfolio may bring to patients. I would like to conclude with our Regeneron Genetics medicines and our collaboration with Elm Island. We are uniquely positioned to combine products of our established biologics portfolio with emerging findings from our genetics medicine efforts. As part of our collaboration with Elm Island, we are looking forward to multiple updates on our C5 program.

Next SG&A expense increased 34% year over year to 391 million, primarily due to costs related to growth initiatives, Roy Leah and higher headcount.

Cost of goods sold increase versus the prior year from 122 million to 224 million, primarily due to Virgin Cove manufacturing costs.

Cost of collaboration manufacturing increased 50% year over year to 214 million driven by higher production to support the growing to pick some sales.

Finally, the effective tax rate was 10.8% in the third quarter of 2021.

Shifting to cash flow and the balance sheet year to date Regeneron has generated 4.3 billion in free cash flow and ended the quarter with cash and marketable securities less debt of 8.7 billion. We continue to utilize our strong balance sheet in accordance with our capital allocation priorities of investing in internal R&D funding strategic external.

George D. Yancopoulos: At the already mentioned ASH meeting, we will show first-in-human data for our C5 antibody prazolamab in combination with the C5-inhibiting siRNA syndiceran. We will present initial results in healthy volunteers, which supports the development of this first-of-its-kind combination of an antibody and an siRNA therapeutic. Early data on siRNA monotherapy mediated C5 knockdown did not achieve complete terminal inhibition in PNH or

R&D partnerships and returning cashed the shareholders accordingly in the third quarter, we repurchased approximately $191 million of our shares.

To conclude I'd like to provide select updates two or 2021 guidance a complete summary of our latest for your guidance is available in our press release published earlier this morning.

George D. Yancopoulos: Adding the antibody specific for the same target protein could provide patients with a lower dose therapy and a more convenient extended dosing regimen while providing more complete C5 inhibition, resulting in better efficacy and less breakthrough hemolysis. We have also recently initiated a Phase III study testing the C5 antibody and siRNA combination in myasthenia gravis. For PNH, starting next year, we are planning to test our combo in both naive and switch patients, tested against dandruff care therapies including rivulizumab and eculizumab.

With <unk>, we are updating our 2021 gross margin guidance to be approximately 88%. This estimate is inclusive of unexpected payment to Roche as a true up of global profits for the COVID-19, anybody cocktail, which will be reported as cost of goods sold as a result, we expect our gross margin percentage and.

The fourth quarter to be the lowest of the year.

We are also updating our 20th 21, Oregon R&D guidance to be in the range of 2.55 to 2.6 billion. The change to the guidance range is related to updating updated phasing of expenses and lower spend on Virgin Cove. Looking ahead, we will continue to make investments into both of our commercial business and are brought pipeline for long term.

George D. Yancopoulos: This study has the potential to show a true benefit of the combination approach for the treatment of this disease. Also, in collaboration with Elnilam, some of our initial genetic target discoveries are reaching the stage of clinical readouts. For non-alcoholic steatohepatitis, or NASH, a disease where finding compelling treatment options has been difficult, we're using the siRNA approach to silence a gene we identified as a potential target. Recall, we discovered that people with a protective HSD17B13 gene variant have a 30 to 70 percent lower odds of chronic liver disease.

Growth in particular, we expect to advanced critically important development programs in 2022, including the late stage studies for the lag three Libtayo combo B C. M. A buy C. D. Three N C. Five along with branded Comparators as George mentioned mentioned earlier and advancing programs with our collaborators in conclusion, we're pleased with the <unk>.

Third quarter as we invest in a robust pipeline to drive sustained long term growth I will now turn the call back to Justin.

George D. Yancopoulos: Our collaborator, Elnilam, will show initial healthy volunteer safety data for the Elnilam HSD, the HSD-17B13-targeting sRNA, at their upcoming R&D day later this month. Finally, in October, the Regeneron Genetics Center published a manuscript in Nature, which highlighted the achievement of the mycelium, a sequencing, almost half a million exomes from the UK Biobank database. This Nature paper, for the first time, describes rare variants of genes that could be potential drug targets for diseases such as hypertension, diabetes, asthma, and others. Thank you, George.

Thank you Bob D. D that concludes our prepared remarks, we'd now like to open the call for Q&A, we have several colors in the queue. So to ensure we were able to address as many as possible. We'll answer one question from each color before moving to the next please go ahead D D.

Certainly that's a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound key please stand by while we can pile the Q&A roster and one moment.

Our first question comes from Jeff Portas of S. B B lyric. Please proceed.

Marion McCourt: Our third quarter business performance demonstrates the strength of our commercial portfolio. We are executing well on our inline brands and are maximizing opportunities for diversified and sustainable growth through ongoing launches. First, I will highlight recent achievements with Regencove, our COVID-19 antibody cocktail, which is available in the US under emergency use authorization by the FDA. In the third quarter, US net sales were $677 million, primarily based on initial deliveries of our third government agreement, which was announced in mid-September.

Thank you very much and congratulations on the really remarkable with ultimate and the and the outlook.

<unk>, perhaps like about feel about the the <unk> weapon wondering when we go to say the first guy that for the city 20, I'd post them could you clarify exactly what we should expect the same next year I'm from which combinations I remember just related to about 50, it's coming up.

Marion McCourt: Demand for Regencove accelerated sharply in the third quarter as this promising treatment option continues to help fight the surge in COVID-19 cases. Regencove is increasingly seen as standard of care for outpatient treatment and post-exposure prophylaxis in appropriate patients. Our field educators continue to support key stakeholders in healthcare systems and administration sites.

And there's a lot of discussion about four one baby could you clarify why you chose to pursue city 28 feel close to them rather than four one baby.

Yeah, well as we indicated will be hopefully providing data in the coming year and it all depends on how the trials progress. Obviously, one is one has to deal with combination trials, where one is dose escalating and.

So those are what are limiting getting too effective doses and so forth in terms of the choices. It all depended on the science are various studies Preclinically and humanized animal models would show that it was in our minds. It made no sense to initiate our efforts with the.

Marion McCourt: While COVID-19 cases have thankfully decreased over the last several weeks, demand for Regencove remains high, with many patients receiving treatment. Regencove has broad therapeutic application in current and potential future indications across the spectrum of disease from pre-exposure prevention to hospitalization. We look forward to the FDA's decision on our application for a full approval expected in April of 2022. Beyond Regencove, we delivered strong growth from our core business in the third quarter

28 costume approach.

The next question please.

Thank you. Our next question comes from Chris Raymond of papers can there. Please proceed.

Hey, Thanks for taking the question I guess, maybe more of a macro question I know the ink is hardly even dry I guess on some of the prescription drug pricing framework negotiations in the right up that's a company that from Congress, but.

Marion McCourt: Starting with ILEA, third quarter global net sales grew 15% year-over-year to more than $2.4 billion. In the U.S., net sales grew 12% year-over-year to nearly $1.5 billion based on category recovery and ILEA's competitive share gains. ILEA secured nearly 50% of the overall category and over 75% of the branded category based on our overall platform of efficacy, safety, and convenience. Additionally, there are positive early indicators from our unbranded direct-to-consumer campaign that educates patients with diabetic eye disease on the importance of vision care.

This is something I I'm sure you guys are watching closely and obviously any changes to Medicare part b as potentially impactful to your business just any of thoughts here on the impact eylea, especially when considering you know the cap on out of pocket spending that's been proposed and discussed.

X.

So thanks for the question of course, you're right. The ink isn't dry some of <unk>. Some of that Bill has been written and disappearing ink pens.

Marion McCourt: Retina specialists have applauded our efforts, encouraging diabetic patients to seek treatment to prevent irreversible vision loss. ILEA's competitive profile, coupled with favorable underlying demographic trends, gives us confidence in Regeneron's ongoing leadership position in retinal diseases. Turning to Liptio, global net sales were $120 million.

<unk> is.

And changing ink, but so it's odd to to get a fix on it I would say that as I understand the bill and based on the most recent update the cap on expenditures is limited to part D. As in David drugs. So it would not affect part b.

Marion McCourt: In the U.S., net sales reached $78 million, despite continued COVID impacts on new patient starts. With new indication launches at early stages, the vast majority of sales came from advanced cutaneous gramous cell carcinoma, or CSCC, where Liptio is the number one systemic treatment. Building on our success in CSCC, we are quickly establishing Leptio as standard of care in advanced basal cell carcinoma for patients in the second line setting or where a hedgehog inhibitor is not appropriate.

B as in Boy I think I've got that right as I said, the as you said the Incas really not dry I will say that generally speaking it is quite remarkable just from my personal perspective, I that the industry that is most responsible for getting the country in the world.

Out of the pandemic in as bad shape as we can is the source of such a great attack, but Fortunately I think that some rational heads have prevailed and the most draconian uhm ideas have.

Marion McCourt: In lung cancer, we are working to secure physician experience with Leptio as a competitive monotherapy treatment option. We look forward to potential chemotherapy combination approval, which would unlock a much larger group of first-line patients eligible for anti-PD-1. Turning to Afkiza, which is now being used to treat more patients than the prior standard of care, we continue to see initiations in both switch and new to category patients, illustrating how our innovative patient identification efforts can be used to support those with HOFH and, in the future, other rare diseases.

Been written admit disappearing ink.

Next question please.

Thank you.

Our next question comes from Yarran Werber of Kellen and company. Please proceed.

Alright, and rest of the team out a great quarter. Thanks, very much for taking the questions, but I'm really just a quick one actually on the please element of some disarray combo I know you mentioned some potential combo treatment studies P N H and M G.

Some of the other C. Five really kind of wanted to add a little bit about how you are thinking about real world use of this one I know, there's a lot of movement and especially the M. J space is this something that we should expect to compete maybe more with Solaris or are you thinking a little bit farther up the line against Ivy a G or somebody F. C. R and just kind of want to get your thoughts there. Thanks.

Marion McCourt: And finally, for DEPIXENT, in the third quarter, global net sales grew 55% year-over-year to $1.7 billion, and U.S. net sales grew 48% to $1.3 billion. This growth was driven across all approved indications, with new patient starts above pre-COVID levels. In atopic dermatitis, prescribing trends are strong across the spectrum of moderate to severe disease, including adolescent and pediatric patients. DEPIXENT continues to capture market growth based on well-established efficacy and safety, breadth of current indications, and unmatched physician and patient experience. There continues to be substantial potential growth in atopic dermatitis, including in children as young as six months in age, and more broadly in dermatology with new potential indications of chronic spontaneous uticaria and prior nodularis.

Yeah, and we were hoping that this is gonna turn out to be the.

Best in class in terms of efficacy and also in terms of convenience for these disease category. So yeah, we're thinking about and depending on how the landscape evolves that that could be the opportunity that we'd be going after.

Next question please.

Thank you. Our next question comes from Josh swimmer of Evercore ISI. Please proceed.

Alright, great. Thanks, so much for taking the questions for the high dose of Flipper Sept Phase three studies what signals are you looking for for for a potential filing is is C. T sickness benefit alone is sufficient to move forward is that gonna be under a new b L. A or an S. BLA <unk>, how do you think that would.

Marion McCourt: And respiratory disease depicts and continues to surpass recent competitive biologic launches. In asthma, we see ongoing potential to differentiate Dupixent through its competitive profile and label expansion as the market recovers from COVID, when asthma-related emergency room visits were down nearly 50%. A launch in pediatric asthma is underway, extending this treatment option to 75,000 children in the U.S. who suffer from this often debilitating disease. Dupixent's label was also recently updated to include an additional marker of type 2 inflammation called Pheno, which extends the eligible population beyond those with high eosinophilic levels.

Fall under proposed drug pricing legislation.

And whether it would reset the clock for for that product. Thank you.

Okay I'll comment on the regulatory so it can enjoy some kind of like maybe on the design aspects, but at the moment. We don't think this would be a new b L. A.

Would be part of the this will likely be an S b like George.

Marion McCourt: In addition, Dupixent can be prescribed for steroid-dependent asthma regardless of eosinophil levels. In nasal polyps, we continue to see growth with Dupixent leading the market despite new competition. Dupixent continues to be the preferred choice of ENTs and allergists regardless of prior surgery.

Yeah basically we are as you said, we're looking of course to look at differences in terms of anatomic improvements, but the trial as a noninferiority study. We're what we're gonna be testing is whether patients that are being treated at a dramatically increased interval do as well.

Marion McCourt: In summary, our commercial team continues to deliver strong growth across the portfolio. With differentiated brands, ongoing, and potential future launches, we remain on track for long-term growth. Now, I'll turn the call over to Bob. Thank you, Marion.

Has regular dose eylea at an eight week intervals. So it's gonna depend on hopefully see that substantially higher numbers of patients who are gonna be able to be treated at extended dos intervals compare to the two milligram dose while achieving similar.

Robert E. Landry: My comments today on Regeneron's financial results and outlook will be on a non-GAAP basis where applicable. In the third quarter, Regeneron once again delivered strong top and bottom line growth on increasingly diversified revenue streams. Contributions from RegenCove in our robust core business. For the third quarter, total revenues grew 51% year-over-year to $3.5 billion. Total diluted net income per share grew 84% year-over-year to $15.37 on a net income of $1.5 million.

Uhm.

Visual acuity effects.

Next question please.

Thank you. Our next question comes from Carter Code of Barclays. Please proceed great. Good morning, excellent golf guys. Thanks for taking the question I wanted to ask on <unk> 14256, like if they're running partner for an endeavour map and if it's development was really in response to specific shift you're saying in the variance in her lower effort.

Robert E. Landry: of $1.8 billion.

C or if you were looking to optimize on other domains and I guess in responding to that could you also address kind of your expectations for running studies conducting studies it with a I guess a lower background rate of hospitalization. Thank you.

Robert E. Landry: Excluding revenues related to the COVID-19 antibody cocktail, total revenues grew 18% versus the prior year. Starting with Regencov, in the third quarter, we recognized $677 million in U.S. net sales, which consisted largely of the initial deliveries of approximately 300,000 doses to the U.S. government under the new 1.4 million dose contract as announced.

Yeah, well all good and somewhat complicated questions right now obviously as we've said our cocktail remains active against all the known variance of concern that have emerged and created issues for other antibodies and so forth how.

Robert E. Landry: as announced in September.

Robert E. Landry: Our collaborator, Roche, records sales of the COVID-19 antibody cocktail known as Ronapreve outside the U.S. in accordance with our Roche agreement. As a true-up payment for global profits, we recorded an additional $127 million as Roche Collaboration Revenue. In the fourth quarter, we expect to deliver approximately 800,000 doses of RegenCoV in the U.S., out of which Roche will supply approximately half of these doses. We will record all Regencove U.S. net product sales.

However, we want to be prepared so we're creating a complimentary cocktail that if ever variance would array arise that that would raise problems for our current cocktail. We would have a complimentary cocktail that the way we designed it would hopefully be unaffected by the same types of mutations so it has to be <unk>.

Repaired for that possibility that as the virus continues to evolve we might need a cocktail that might not.

Not be sensitive to the same mutations as the first cocktail, but the current cocktail is still active against.

Robert E. Landry: Given the mix of manufactured products supplied to the market by Roche and Regeneron, the true up payment for global profits is expected to result in zero Roche collaboration revenues in the fourth quarter. The remaining doses from the U.S. government contract are expected to be delivered in the first quarter of 2022. I will now move to our Bayer collaboration.

The variance of concern yes.

Yes, there's a lot of questions in terms of how to design the study where to do it depending on rates of hospitalization and rates of of infection. So these are the complications that we've had to navigate through out this pandemic you might remember and.

Robert E. Landry: Ex-U.S. ILEA Net Product Sales, reported to us by Bayer, worth $931 million for the third quarter of 2021, representing growth of 19% on a reported basis and 18% on a constant currency. Total Bayer Collaboration revenue was $365 million, of which we recorded $351 million for our share of net profits from ILEA sales outside the U.S. Total Sanofi collaboration revenue was $582 million in the third quarter of Our share of the profits from the commercialization of Depixit and Kevzar was $387 million, which compares favorably to our share of profits of $213 million in the prior year. We also recognized a $50 million sales milestone payment related to the achievement of $1.5 billion of ex-U.S. sales for the collaboration on a rolling 12-month basis.

Throughout this pandemic, we have managed to carry out the largest COVID-19 program.

For for treatment and for prevention, using using antibodies and we hope that that all the knowledge that we gain from learning how to navigate changing fluctuating infection rates and hospitalization rates and so forth. We can continue to take advantage of that and continue to carry out our program.

Efficiently and as quickly as possible Yeah, let me just add to that and emphasize with George and set in his early remarks, which is that a lot of what we see as the big future knee is in the Preexposure prophylaxis, and then Preexposure prophylaxis is likely not to go away because.

Robert E. Landry: Moving on to operating expenses, R&D decreased slightly to $592 million, primarily due to lower spending on Regencove development as compared to the third quarter of 2020. Next, SG&A expense increased 34% year-over-year to $391 million, primarily due to costs related to growth initiatives for ILEA and higher headcount. Cost of goods sold increased versus the prior year, from $122 million to $224 million, primarily due to Regencov manufacturing costs. The cost of collaboration manufacturing increased 50% year-over-year to $214 million, driven by higher production to support the growing number of picks and sales. Finally, the effective tax rate was 10.8% in the third quarter of 2021.

Cause of the ongoing infections, the breakthrough infections that still occur and fully vaccinated people mind, you with the Orange coming we'll see whether they actually get to the United States. They do have some safety and efficacy issues.

Class so far that they have not demonstrated the comparable cross studied comparisons notwithstanding the kind of efficacy yep monoclonal have <unk>.

Delivered nor have they satisfy so many people's satisfaction at the safety concerns around using a mutagen, perhaps okay for short term, but when you're getting into longer term prophylaxis.

The immuno compromised, which is weird George mentioned, we have a lot of work on going it's really important to remember that we expect to have our molecules should be able to be given quite less frequently I've been one might expect.

Robert E. Landry: Shifting to cash flow on the balance sheet, year-to-date, Regeneron has generated $4.3 billion in free cash flow and ended the quarter with cash and marketable securities, less debt of $8.7 billion. We continue to utilize our strong balance sheet in accordance with our capital allocation priorities of investing in internal R&D, funding strategic external R&D partnerships, and returning cash to shareholders. Accordingly, in the third quarter, we repurchased approximately $191 million of our shares.

Because you're looking at a prophylaxis mode and we.

We think that they should based on the evidence we have delivered really rather remarkable efficacy in that setting as they already have and the non immuno compromised. So has the market transitioning to a prophylaxis mode, we see or an ongoing.

Robert E. Landry: To conclude, I'd like to provide select updates to our 2021 guidance. A complete summary of our latest four-year guidance is available in our press release published earlier this morning. With our, we are updating our 2021 gross margin guidance to be approximately 88%. This estimate is inclusive of an expected payment to Roche as a true up of global profits for the COVID-19 antibody cocktail, which will be reported as cost of goods sold.

Demand and need which were preparing to meet up for Monical cocktail therapy.

Next question. Please thank.

Thank you. Our next question comes from Kenya, K F. R. B C capital markets. Please proceed.

Alright, thanks for taking the question.

First let me say that to 11, but I love your commentary towards political or rather governmental purchasers that the rich uncovered and about to talk to you. All thank you for for being the voice of science and reason here maybe.

Robert E. Landry: As a result, we expect our gross margin percentage in the fourth quarter to be the lowest of the year. We are also updating our 2021 R&D guidance to be in the range of $2.55 to $2.6 billion. The change to the guidance range is related to updated phasing of expenses and lower spend on RegenCoV. Looking ahead, we will continue to make investments in both our commercial business and our broad pipeline for long-term growth.

<unk> for my question I've actually really admired your B D strategy, which has a lot of awareness recognizing areas of expertise, but also a limitation <unk> I'm looking to to be the medium partnerships and licensing <unk> to outsource. The ladder I was wondering what are you really interested now on on the beat it from if there are any technologies that are that are jumping.

Robert E. Landry: In particular, we expect to advance critically important development programs in 2022, including late-stage studies for the LAG-3-Liptio combo, BCMA by CD3, NC5, along with branded comparators, as George mentioned earlier, and advancing programs with our collaborators. In conclusion, we're pleased with the third quarter as we invest in our robust pipeline to drive sustained long-term growth. I will now turn the call back to you. Thank you, Bob. DeeDee.

Outage additional areas of opportunity for the company of men sort of partial about whether you're at all interested in this newly emerging field of protein degradation and protein degraders as oncology targets. Thank you.

George should take this he's been the architect of the scientific underpinnings of a b D strategy and having a remarkable vision to be able to integrate that with a core expertise George.

Operator: That concludes our prepared remarks. We'd now like to open the call for Q&A. We have several callers in the queue, so to ensure we are able to address as many as possible, we will answer one question from each caller before moving to the next, certainly

Well, yeah, I I I think if we were looking to get into new technologies, and and and have new relationships. I don't think we would be telling you about them. At this time next crashed right Church could you comment on your prior strategy and how how.

Operator: Certainly. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster in one moment. Our first question comes from Jeff Porges of SVB Lyric. Please proceed.

How about that Renee and well I I think yeah, what what lends referring to is I I think that the the whole team the whole company and many levels from the business development group through the science research folks through our our our pre manufacturing group has done a spectacular job of.

Len Schleifer: Thank you very much and congratulations on the really remarkable results and the outlook. George, perhaps I could ask you about the co-STEMs. We've been wondering when we're going to see the first data for the CD28 co-STEMs. Could you clarify exactly what we should expect to see next year and from which combinations? And then just related to that, CISTI's coming up, and there's a lot of discussion about 4.1bb. Could you clarify why you chose to pursue CD28 for your co-STEMs rather than 4.1bb?

Pivoting us from a solely biologics company to a genetic medicine company.

What we managed to do starting with a regeneron genetic center is create what we believe is perhaps the world's most powerful technology to identify new genetic targets based on our sequencing of almost 2 million.

Individuals all linked to electronic digital records that allows us to understand we think more powerfully the name, but he else the role of genetic variation both in disease protection and causation, which have led to a whole series of new disease targets for both protection and causation and.

George D. Yancopoulos: Yeah, as we indicated, we'll hopefully be providing data in the coming year, and it all depends on how the trials progress. Obviously, one has to deal with combination trials where one is dose escalating, and so those are what are limiting getting to effective doses and so forth.

For those some of those are addressable by biologics and they're part of our.

Existing approaches with biologics, but we have to use new approaches and for those purposes. We started creating some of these important outside alliances and collaborations with companies like on the island for the S. I R. Nay approaches that we talked a little bit about and within Telia with CRISPR based approaches.

George D. Yancopoulos: In terms of the choices, it all depended on the science. The City 28 Coastal, Next question, please. Thank you. Our next question comes from Chris Raymond of Piper Sandler. Please proceed. Hey, thanks for taking the question. I guess it's more of a macro question.

Many of these we've been able to to build and create and take him to another level based on our very productive collaborations with these two great companies that were now collaborating with and we also invested enormously internally in terms of building our own gene therapy approaches. So we believe that we are.

Christopher Joseph Raymond: I know the ink is hardly even dry, I guess, on some of the prescription drug pricing framework negotiations in the write-up that's accompanied that from Congress. This is something I'm sure you guys are watching closely, and obviously any changes to Medicare Part B are potentially impactful to your business. Just any thoughts here on the impact to ILEA, especially when considering the cap on out-of-pocket spending that's been...

Positioning ourselves to become leaders for the foreseeable future over the next decade or so in the genetic medicine space, it's becoming increasingly important in larger part of our portfolio. It's almost a whole separate company. We believe in terms of the opportunities and value that a general.

Rates, while we're maintaining our leadership position with biologics not only with classical antibodies, but also with Bispecifics and all sorts of engineered formats of biologics. So so I think it's been a tremendous job by by our entire team and organization to essentially create this entirely new K.

Leonard S. Schleifer: been proposed and discussed. Thanks. So, thanks for

Leonard S. Schleifer: So thanks for the question, Chris. You're right; the ink isn't dry yet. Some of the bill has been written in disappearing ink, and some is in changing ink, so it's hard to get a fix on it. But I would say that, as I understand the bill, and based on the most recent update, the cap on expenditures is limited to Part D, as in David Drugs. So it would not affect Part B, as in Boyd.

<unk> ability.

Next question. Please thank.

Thank you. Our next question comes from Ronnie Galle Alliance Bernstein. Please proceed.

Good morning, some falling out of the last question can you come in a little bit about when we can see your first can I CRISPR based technology at a trial that you run coming into the clinical it being 2022 or 2023, and then with this at four additional companies should we expect the R&D cost too right continued to rise roughly at the rate.

Leonard S. Schleifer: I think I've got that right. As I said, and you said, the ink is really not dry yet. I will say that, generally speaking, it is quite remarkable, just from my personal perspective, that the industry that is most responsible for getting the country and the world out of the pandemic in its best shape as we can is the source of such a great attack. But fortunately, I think that some rational heads have prevailed, and the most draconian... ideas have been written in that Next question, please. Thank you. Our next question comes from Yaron Werber of Cowan & Company. Please proceed.

They have historically been thank you.

Okay, I'll remind you that I believe we announced last quarter. Our first CRISPR Ah results was where the first obtained by anybody in history in terms of using a systemic CRISPR based therapy.

To actually modify genes within human beings. It was incredibly successful study that we did in collaboration and with <unk>. It was the first ever systemic investigational CRISPR base gene knockout approach and in the first set of patients that we treated.

We show that a single dose of this CRISPR based therapy led to very dramatic and dose dependent reductions in the target protein coming from the target gene I think that the world view this as incredibly exciting data believe we announced it in.

Yaron Werber: I congratulate the team on a great quarter. Thanks very much for taking the questions, guys. Really just a quick one, actually, on the Pazellumab-Cindicerin combo. I know you mentioned it.

George D. Yancopoulos: and some potential combo treatment studies, such as PNH and MG.

George D. Yancopoulos: I really kind of wanted to ask a little bit about how you're thinking about real world use of this one. I know there's a lot of movement in, especially, the MJ space. Is this something that we should expect to

June of of 21, and I think it's just the beginning of a very large program we have about 20.

George D. Yancopoulos: Are you thinking a little bit farther down the line against IVIG or some of the FCRNs?

Preclinical programs now under evaluation that will be rolling out in terms of going into the clinic and producing a clinical results over the next couple of years.

George D. Yancopoulos: FCRN. Just kind of want to get your thoughts there. Thanks.

Josh Schwimmer: Yeah, I mean, we are hoping that this is going to turn out to be the best in class in terms of efficacy and also in terms of convenience for these disease categories. So yeah, we're thinking about, and depending on how the landscape evolves, that that could be the opportunity that we would be going Next question, please. Thank you. Our next question comes from Josh Schwimmer of Evercore ISI. Please proceed.

Let me just kind of punctuate right. So we'll give kind of guidance.

And our fourth quarter earnings and in early February you know I I will tell you. If you look at our kind of run rate. This year R&D relative to 2020, you know we're coming out at roughly.

A 7% increase if you take the mid point of my guidance and you know I guess my my word of caution is a lot of that's heavy reject coven, 2020th So we're going up against the big reject code number in 2020 as compared to what we incurred in 2021. So that's seven percentage I'd say artificially light compared to where where we're going to eventually end.

Josh Schwimmer: Great, thanks so much for taking the questions.

Josh Schwimmer: So the high dose of Flibercept in phase 3 studies, what signals are you looking for for a potential filing? Is OCT thickness benefit alone sufficient to move?

When we do give that guidance. So I just want to make sure people are not kind of doing same year, one right says they're seeing in 2021.

Josh Schwimmer: forward. Is it going to be under a new BLA or an SBLA? And as such, how do you think that would fall under proposed drug pricing legislation?

Next question please.

Josh Schwimmer: Thank you.

Thank you. Our next question comes from Matthew Harrison of Morgan Stanley. Please proceed.

Leonard S. Schleifer: I'll comment on the regulatory aspects, and George can comment maybe on the At the moment, we don't think this would be a new BLM. And this would be part of the, this would likely be an SPLA, George.

Thanks for taking the question. This is Charlie all for Matthew.

Can you please come in on the <unk> activities and the commercial dynamics, you know given the relatively modest called quarter to quarter growth. Thank you.

Sure. Charlie This is Marianne let me let me take that first off we have great ambition of course for Libtayo as I mentioned the bulk of our sales today are from our lines of cutaneous squamous cell carcinoma. Understandably are more recent launches have brought us again into germ with basal cell carcinoma, where libtayo isn't.

George D. Yancopoulos: Yeah, basically, as you said, we're looking, of course, to look at differences in terms of anatomic improvements. But the trial is a non-inferiority study, where what we're going to be testing is whether patients that are being treated at a dramatically increased interval do as well as regular-dose ILEA at an eight-week interval. So it's going to depend on, hopefully, seeing that substantially higher numbers of patients are going to be able to be treated at extended-dose intervals compared to the two-milligram dose while achieving similar outcomes, such as the visual acuity effect. Next question, please.

Very quickly, becoming the standard of care for appropriate patients based on its clinical profile and based on you know obviously patients. Unfortunately fail with a hedgehog inhibitors, which can also can be really difficult to tolerate. So we're very pleased with how that long just going early days. Most important however is a long lunch the initial.

Lunch, we had in mono therapy is understandably for a smaller target group of patients. We do believe however, though the experienced that physicians are gaining libtayo in first line monotherapy treatment is very very important and bodes well for one we hopefully have the large or indication approved for.

Operator: Thank you. Our next question comes from Carter Gould of Barclays. Please proceed.

Carter Gould: Great. Good morning. Excellent results, guys.

Carter Gould: Thanks for taking the question. I wanted to ask about Regin 14256, I guess, the new running partner for Endevimab, and if its development was really in response to a specific shift you're seeing in the variants or lower efficacy, or if you were looking to optimize on other domains. And I guess in responding to that, could you also address kind of your expectations for, you know, running studies, conducting studies with a, I guess, lower background rate of hospitalization? Thank you.

Chemo combo and that as many are aware is a much larger population of patients perhaps four to five fold more patients and we certainly look forward to to potentially being able to launch that large or indication in long.

Next question please.

Thank you. Our next question comes from Robin come ask us that too. Please proceed.

Hi, Thanks for taking my question I was wondering if you could satisfy a little bit of my curiosity about the new slow coming out of your <unk> partnership I guess the first question. They ask is in the event that they'll be hosting next year and the first quarter, how much their ability data it might be get four P. T. R. And then George you mentioned you had a decent Linda.

George D. Yancopoulos: Yeah, all good and somewhat complicated questions. Right now, obviously, as we've said, our cocktail remains active against all the known variants of concern that have emerged and created issues for other antibodies and so forth. However, we want to be prepared. So we're creating a complementary cocktail that, if ever variants arise that would raise problems for our current cocktail, we would have a complementary cocktail that, the way we designed it, would hopefully be unaffected by the same types of mutations.

George D. Yancopoulos: So we need to be prepared for the possibility that as the virus continues to evolve, we might need a cocktail that might not be sensitive to the same mutations as the first cocktail. But the current cocktail is still active.

<unk> over the next few years that you'll be going into when are we gonna be hearing about those what can we hear about a lot of them in the beginning of the year will just hear them or the cause of course <expletive> I know and tell you. It's a huge investor interest US we'll hook my thanks.

I Wonder if we shouldn't give tell me the opportunity to give that kind of guidance Robyn.

Sure that might be that approach.

Okay. Thank you.

Six question. Please. Thank you. Our next question comes from a Li P. A young of Cantor. Please proceed.

George D. Yancopoulos: Yes, there are a lot of questions in terms of how to design this study, where to do it, depending on rates of hospitalization and rates of infection. So these are the complications that we've had to navigate throughout this pandemic, you might remember, and throughout this pandemic, we have managed to carry out the largest COVID-19 program for treatment and for prevention using antibodies, and we hope that all the knowledge that we gained from learning how to navigate changing, fluctuating infection rates and hospitalization rates and so forth can continue to be taken advantage of and continue to carry out our program efficiently and as quickly as possible.

Hey, guys. Thanks for taking my question that question I I do think just just just at help Robin out a little bit I think one really important point is yes as.

The the data continues to mature and certainly we expect.

Excellent duration data coming out over time, and so forth, but I think we all have to recognize that this represents the first true validation of this entire field and approach and our ability working with Intel you're using our specific approach to actually turn it.

From dream into reality and this obviously dramatically increases the probability of success of all of our future programs based.

Based on our collaborative technology within tell Ya.

Including both knock out and insertion approaches and we have to of course highlight and point out the lack of such proof of concept.

George D. Yancopoulos: Let me just add to that and emphasize what George said in his early remarks, which is that a lot of what we see as the big future need is for pre-exposure prophylaxis, and that pre-exposure prophylaxis is likely not to go away because of the ongoing infections, the breakthrough infections that still occur in fully vaccinated people. Mind you, with the orals coming, we'll see whether they actually get into the United States.

Concept and success with any other approaches to date and I think that that really distinguishes our collaboration within talia and obviously should adjust the risk profile for all of our programs going forward, which as Len said, hopefully we in and tell you will be giving more.

More more resolution on going forward.

Leonard S. Schleifer: They do have some safety and efficacy issues as a class so far that they have not demonstrated the comparable cross-study comparisons, notwithstanding the kind of efficacy that monoclonals have delivered, nor have they satisfied, to many people's satisfaction, the safety concerns around using a mutagen, perhaps okay for short-term, but when you're getting into longer-term prophylaxis of the immunocompromised, which is where George mentioned we have a lot of work ongoing, it's really important to remember that we expect to have, our molecules should be able to be given quite less frequently than one might expect because you're looking at a prophylaxis mode, and we think that they should, based on the evidence we have, deliver a really rather remarkable efficacy in that setting, as they already have in the non-immunocompromised. So as the market transitions to a prophylaxis mode, we see an ongoing demand and need, which we're preparing to meet, for monoclonal cocteils.

Alright go ahead with your.

Thank God for taking my question and congrats on the corner I just had a question about kind of obviously, a very robust alea data with defects and can you just talk a little bit about what you think about the market opportunity there and like how it what diagnosis is like there and how you could ever since like fan that thanks.

Sure. So uhm, we're very excited about the possibility of launching depiction also first tend to fill a guest arthritis is George was describing this tremendous unmet need in the marketplace patients who truly are suffering in it'll often end up in the emergency room with difficult procedures to try to remedy for the show.

Short term some of the the difficult symptoms. They have besides a patient population for them issue undergoing recurrent treatment is about 48000, and then obviously there are patients who <unk> who are entering the system.

Beyond that but probably just as a starter number that 48 to 50000, who failed multiple treatments is the core group and then we will extend beyond that too probably about another hundred and 50000 patients with easily who also have Aaron the need of treatment, but the seal your group obviously.

Is 50000 as the the most severe.

<unk>, we have time for two more quick questions.

Okay.

Leonard S. Schleifer: Next question, please. Thank you. Our next question comes from Kenan McKay of RBC Capital Markets. Please proceed. Hi, thanks for taking the question. First, let me say to Len that I love your commentary on political or rather governmental purchases of the RegenCov antibody.

Our next question is from <unk>.

Extra Roger Bailey of U B S. Please proceed.

Good morning. Thank you for taking my question I have gone and Alea, perhaps about the clock question can you give us some details unused diabetics nondiabetic patients and it's the uptake among diabetic type two more consistent yes, I'm I'm treated patients are are you on boarding new diabetics.

Kenan McKay: I really admired your BDE strategy, which shows a lot of awareness, recognizing areas of expertise but also limitations and looking to BDE and partnerships.

And lastly, anything you can share on N. P. D. R vices diabetic mackler demarcation could be helpful as well.

George D. Yancopoulos: and looking to BD and partnerships and licensing to outsource the latter. I was wondering what you're really interested in now on the BD front, if there are any technologies that are jumping out as additional areas of opportunity for the company, and then, sort of related to that, whether you are at all interested in this newly emerging field of protein degradation and protein degraders as oncology targets. Thank you. George should take this.

Sure. So let me, let me give you a little bit it back on and some characterization uhm certainly are indications for diabetic eye disease Uhm are the fastest growing in terms of new patients proportionally coming into the treatment paradigm. We also see a growth in the diabetes treatment populate.

<unk> friendly opposite for example, wet Andy So now our web M. D treatment is under 60 per cent of the total utilization of Eylea in the U S market place.

George D. Yancopoulos: He's been the architect of the scientific underpinnings of our BD strategy and has a remarkable vision to be able to integrate that with our core expertise, George. Well, yeah, I think if we were looking to get into new technologies and have new relationships, I don't think we would be telling you about them at this time. Next question.

Specific growth on diabetic eye disease by indication, it's difficult to give you the exact breakdown, but we are very optimistic uneven D. Early efforts, we've seen market based on our new unbranded direct to consumer T V campaign, which is really educating diabetic patients Bradley.

George D. Yancopoulos: Wait, Terence, could you comment on your prior strategy and how fRNA and CRISPR differ? Well, I think, yeah, what Len's referring to is, I think that the whole team, the whole company at many levels, from the business development group through the science research folks through our pre-manufacturing group, has done a spectacular job of pivoting us from a solely biologics company to a genetic medicine company. What we've managed to do, starting with our Regeneron Genetic Center, is create what we believe is perhaps the world's most powerful technology to identify new genetic targets, based on our sequencing of almost 2 million individuals, all linked to electronic digital records, that allows us to understand, we think, more powerfully than anybody else, the role of genetic variation both in disease protection and causation, which has led to a whole series of new disease targets for both protection

<unk> unimportance of having their vision checked making sure. It's part of their you know with a regular check in as patients with diabetes have other areas that they standard Lee review and make sure of their of their care I disease has often been neglected with very disastrous situations of vision loss that can't be corrected. So let me see.

That is a really important area and one that will fuel diabetic eye disease treatment broadly, but even today in before we embarked upon that program you see it as a high growth indication.

D D. We have time for one more question.

Alright, alright.

Our last question comes from Jack into nature of Guggenheim Partners. Please proceed.

Thanks for choosing man congrats on the on the quota good Performant just quickly on the compliment F. Can you just talk about Ah the C. N S Y neurology applications with either the amount of therapy Odyssey combination and then wood yeah.

With respect to the S. I out any approach could we take that could you take that into the eye and what the long term vision.

George D. Yancopoulos: And for some of those, some of those are addressable by biologics, and they're part of our existing approaches with biologics, but we had to use new approaches that we talked a little bit about and with Intelia using CRISPR-based approaches.

Thank you.

Yeah, we're not going to say too much about your first question, but in terms of your second question, absolutely and so when we establish his relationship with Alnylam in terms of using S. Iron is it was actually directed towards three separate areas. So it really was three separate <unk>.

<unk> the one in the first that we thought that we'd be moving most rapidly into the clinic and that has turned out to be the case, where with liver targets both sort of more conventional talk just like the C. Five but also targets that were coming from our own pipeline like the H S. D targets that we talked about and that those are all.

George D. Yancopoulos: Many of these we've been able to build and create and take to another level based on our very productive collaborations with these two great companies that we're now collaborating with. And we have also invested enormously internally in terms of building our own gene therapy approaches. We believe that we have positioned ourselves to become leaders for the foreseeable future over the next decade or so in the genetic medicine space. It's becoming an increasingly important and larger part of our portfolio.

Moving along forward and we think very exciting fashion as we discussed another key area that you just opened up which is still preclinically, but we're we're hoping to eventually move into the clinic is targeting D. I targets with S. I R.

George D. Yancopoulos: It's almost a whole separate company, we believe, in terms of the opportunities and the value that it generates. Meanwhile, we're maintaining our leadership position with biologics, not only with classical antibodies but also with bispecifics and all sorts of engineered formats of biologics. So I think it's been a tremendous job by our entire team and organization to essentially create this entirely new capability. Next question, please. Thank you. Our next question comes from Ronnie Gall of Alliance Bernstein. Please proceed.

And that's really a very important area for us and it was a very important separate part of the entire alnylam collaboration and the third really critical.

Foundational part of our collaboration with Alnylam involve using us are nice target targets in the in the bright and that's also moving forward and very exciting fashion and we'll be talking a lot more about that going forward. So really it's a it's a three sort of tiller program.

Liver targets I targets and CNS targets, we're very excited and moving forward on all of them and as we had died in early on the first set of targets of course would be in the liver and then we'd be moving.

Ronnie Gall: Good morning. So following on from the last question, can you please comment a little bit?

Ronnie Gall: and a little bit about when we could see the first kind of CRISPR-based technology in a trial that you run.

Ronnie Gall: Coming into the clinic, will it be in 2022 or 2023? And then, with this full additional company, should we expect the R&D cost to continue to rise roughly at the rate

Into the other two areas uhm.

As rapidly as possible.

Great. Thanks, everyone that will conclude our call Bob Landry and the I R team will be available today to answer any additional questions. You may have thanks, everyone and stay safe Goodbye.

Ronnie Gall: That's roughly the rate they have historically been. Thank you.

George D. Yancopoulos: Okay, I'll remind you that last quarter we announced our first CRISPR results, which were the first obtained by anybody in history in terms of using a systemic CRISPR-based therapy to actually modify genes within human beings. It was an incredibly successful study that we did in collaboration with Intelia. It was the first ever systemic investigational CRISPR-based gene knockout approach, and in the first set of patients that we treated, we showed that a single dose of this CRISPR-based therapy led to very dramatic and dose-dependent reductions in the target protein coming from the target gene.

This concludes today's conference call. Thank you for participating and you may now disconnect.

Yeah.

[music].

George D. Yancopoulos: I think that the world viewed this as incredibly exciting data. I believe we announced it on June 21, and I think it's just the beginning of a very large program. We have about 20 preclinical programs now under evaluation that will be rolling out in terms of going into the clinic and producing clinical results over the next couple of years. Rodney, let me just kind of punctuate right so we'll give kind of guidance in our fourth quarter earnings in early February.

George D. Yancopoulos: You know, I will tell you, if you look at our kind of run rate this year, R&D relative to 2020, we're coming out at roughly a 7% increase if you take the midpoint of my guidance. And, you know, I guess my word of caution is a lot of that's heavy Regencove in 2020. So we're going up against a big Regencove number in 2020 as compared to what we incur in 2021.

George D. Yancopoulos: So that 7% is, I'd say, artificially light compared to where we're going to eventually end up when we do give that guidance. So I just want to make sure people are not kind of doing the same year run rates as they're seeing.

Robert E. Landry: you're seeing in 2021. Next question, please.

Operator: Thank you. Our next question comes from Matthew Harrison of Morgan Stanley. Please proceed.

Matthew Harrison: Thanks for taking the question. This is Charlie Yang for Matthew. Can you please comment on the Libertario activities and the commercial dynamics, you know, given the relatively modest kind of quarter-to-quarter growth? Thank you.

Marion McCourt: Sure, Charlie, this is Marion. Let me take that. First off, we have great ambition, of course, for Libtio. As I mentioned, the bulk of our sales today are from our launch of cutaneous squamous cell carcinoma. Understandably, our more recent launches have brought us again into DERM with basal cell carcinoma, where Libtio is very quickly becoming the standard of care for appropriate patients based on its clinical profile and based on, obviously, patients unfortunately fail with hedgehog inhibitors, which also can be really difficult to tolerate.

Marion McCourt: So we're very pleased with how that launch is going in its early days. Most important, however, is our lung launch. The initial launch we have in monotherapy is understandably for a smaller target group of patients. We do believe, however, though, that the experience that physicians are gaining with Libtio in first-line monotherapy treatment is very, very important. And bodes well for when we hopefully have the larger indication approved for chemo combo. And that, as many are aware, is a much larger population of patients, perhaps four- to five-fold more patients.

Marion McCourt: And we certainly look forward to potentially being able to launch that larger indication in the lungs. Question, please. Thank you. Our next question comes from Robyn Karnauskas of Truist. Please proceed. Hi, thanks for taking my question. I was wondering if you could...

Robyn Kay Shelton Karnauskas: I'm going to stop by a little bit with my curiosity about the new slow coming out of your Intelia partnership. I guess the first question I'd ask is about the event that they'll be hosting next year.

George D. Yancopoulos: Our next question is from George. He's asking, what are your expectations for TTR? In the first quarter, how much durability data might we get for TTR? And then George, you mentioned the additional indications over the next few years that you're going into. When are we going to be hearing about those? Can we hear about when we will be seeing those?

Operator: https://www.larryschott.com I wonder if we could...

Operator: I wonder if we shouldn't give Intelli the opportunity to give that kind of guidance, Robert. Okay, thank you. Next question, please. Thank you. Our next question comes from Alicia Young of Cantor. Please proceed.

George D. Yancopoulos: Before you get to that question, I do think, just to help Robyn out a little bit, I think one really important point is yes, as the data continues to mature and certainly we expect excellent duration data coming out over time and so forth, but I think we all have to recognize that this represents The first true validation of this entire field and approach, and our ability working with Intelia using our specific approach to actually turn it from dream into reality. And this obviously dramatically increases the probability of success of all of our future programs based on our collaborative technology with Intelia, including both knockout and insertion approaches and we have to of course highlight and point out the lack of such proof of concept and success with any other approaches to date and I think that that really distinguishes our collaboration with Intelia and obviously should adjust the risk profile for all of our programs going forward which as Len said hopefully we and Intelia will be giving more a more more resolution on going forward.

Marion McCourt: Go ahead, Alethea. Oh, thanks, guys, for taking my question. And congrats on the quarter. I just had a question about, kind of, obviously, you have very robust EOE data with defects. Can you just talk a little bit about how you think about the market opportunity there?

Marion McCourt: So we're very excited about the possibility of launching Dupixent also for synophilic esophagitis. As George was describing, there is a tremendous unmet need in the marketplace. Patients who truly are suffering and often end up in the emergency room with difficult procedures to try to remedy for the short term some of the difficult symptoms they have. The size of the patient population for those who are undergoing recurrent treatment is about 48,000. And then obviously there are patients who are entering the system beyond that. But probably, just as a starter number, 48,000 to 50,000 who have failed multiple treatments are the core group. And then we will extend that to probably about another 150,000.

Marion McCourt: and 50,000 patients with EOE who also have earned the need for treatment, but the failure group, obviously, of 50,000 is the most severe.

Operator: Davey, we only have time for two more quick questions.

Operator: Our next question is from Esther Raja Bailu of UBS. Please proceed. Hey, good morning. Thank you for taking my question. I have one on ILEA, perhaps a multi-part question. Can you give us some details on use among diabetics versus non-diabetic patients? And is the uptake among diabetics tied to more consistent...

Operator: For more information, visit www.ISGlobal.org

Marion McCourt: And lastly, anything you can share on NPDR versus diabetic macular edema patients would be helpful as well. So, let me give you a little bit of a background and some characteristics.

Marion McCourt: Certainly, our indications for diabetic eye disease are the fastest growing in terms of new patients proportionally coming into the treatment paradigm. We also see a growth in the diabetes treatment population for ILEA opposite, for example, wet AMDs. So now, our wet AMD treatment is under 60% of the total utilization of ILEA.

Marion McCourt: The specific growth in diabetic eye disease by indication is difficult to give you the exact breakdown, but we are very optimistic about even the early efforts we see in the market based on our new unbranded direct-to-consumer TV campaign, which is really educating diabetic patients broadly on the importance of having their vision checked, making sure it's part of their regular check-in as patients with diabetes have other areas that they standardly review and make sure of. Eye disease has often been neglected, with disastrous situations of vision loss that can't be corrected. So we see that as a really important area and one that will fuel diabetic eye disease treatment broadly.

Marion McCourt: and Broadly, but even today and before we embarked upon that program, we see it as a high growth indication.

Operator: Dede, we have time for one more question.

Operator: Our last question comes from Jackson Taneja of Guggenheim Partners. Please proceed. Thanks.

Jackson Taneja: Thanks for choosing me and congrats on the quarter; good performance. Just quickly on the complement effort, can you just talk about other CNS or neurology applications with either monotherapy or the combination? And then, with respect to the siRNA approach, could we take that, could you take that into the eye, and what is the long-term vision there? Thank you.

George D. Yancopoulos: Yeah, we're not going to say too much about your first question, but in terms of your second question, absolutely. And so when we established this relationship with Almilam in terms of using sRNAs, he was actually directed towards three separate areas, so it really was three separate collaborations. The one and first that we thought that we'd be moving most rapidly into the clinic, and that has turned out to be the case, were liver targets, both sort of more conventional targets like the C5, but also targets that were coming from our own pipeline, like the HSD target that we talked about.

George D. Yancopoulos: And those are all moving along forward in, we think, very exciting fashion, as we've discussed. Another key area that you just opened up, which is still pre-clinical, but we're hoping to eventually move into the clinic, is targeting the eye targets with sRNAs. And that's really a very important area for us, and it was a very important separate part of the entire Almilam collaboration. And the third really critical...

George D. Yancopoulos: The most foundational part of our collaboration with Elnayem involved using SRNAs to target targets in the brain. And that's also moving forward in a very exciting fashion, and we'll be talking a lot more about that going forward. So really, it's a three sort of pillar program, liver targets, eye targets, and CNS targets. We're very excited and moving forward on all of them. And as we had predicted early on, the first set of targets, of course, would be in the liver, and then we'd be moving into the other two areas as rapidly as possible. Great. Thanks, everyone. That will conclude our call. Bob Landry and the IR team will be available today to answer any additional questions.

Operator: I will be available today to answer any additional questions you may have. Thanks, everyone, and stay safe.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.