Q4 2021 Regeneron Pharmaceuticals Inc Earnings Call

February 4, 2022

Welcome to the Regeneron Pharmaceuticals fourth quarter 2021 earnings conference call. My name is Michelle and I'll be your operator for today's call. At this time all participants are in a listen-only mode.

Later, we will conduct a question and answer session.

Please note that this conference is being recorded.

I'll now turn the call over to Mark Hudson Director Investor Relations. You may begin.

Thank you, Michele. Good morning, good afternoon, and good evening to everyone listening around the globe. Thank you for your interest in Regeneron and welcome to the fourth quarter 2021 conference call. An archive of this webcast.

It will be available on our website. Joining me on the call today are Dr. Len Schleifer, founder President and Chief Executive Officer.

Dr. George Yancopoulos, co-founder President and Chief Scientific Officer, [inaudible] Executive Vice President and head of commercial and Bob Landry Executive Vice President and Chief Financial Officer. After our prepared remarks, we'll open up the call for Q&A.

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

Pending litigation and other proceedings and competition. Each forward-looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement.

The complete description of these and other material risks can be found in Regeneron filings with the United States Securities and Exchange Commission, including its Form 10-K for the period ended December 31st 2021 would you are you planning to file with the SEC early next week.

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 financial measures will be discussed on today's call information regarding our use of non-GAAP financial measures and a reconciliation of those measures to GAAP is available in our financial results.

This release, which can be accessed on our website. Once your call concludes, Bob Landry and the IR team will be available to answer further questions. With that, let me turn the call over to our President and Chief Executive Officer, Dr. Len Schleifer.

Thanks, Mark and thanks to everyone joining today's call.

The fourth quarter of 2021 capped off a terrific year for general. Our performance was driven by strong execution across the organization. Despite the ongoing challenges posed by COVID-19.

We're all proud of the incredible work and dedication of our employees, who continuously deliver on our mission to bring important medicines and novel medical breakthroughs to patients in need.

Throughout 2021, we delivered strong top and bottom-line growth. Revenues, excluding our COVID-19 antibody cocktail, grew 19% the testament of our diversified and strengthening our core business. Our innovative and world-class pipeline advanced across a wide variety of disease.

We also unveiled initial clinical data and pipeline advancements from our Regeneron genetics medicines portfolio, which has the potential to unlock significant long term value.

Additionally, we returned substantial cash to shareholders in the form of share buybacks. In '21, we spent approximately $1 7 billion repurchasing over 3 million shares.

Finally at 2021 global sales grew 19% to 9.4 billion.

Even after 10 years on the market and millions of injections later, we continue to view eylea as an enduring product with significant future opportunity despite new market entries.

In the second half of the year, we look forward to the results from our phase III, a flipper set eight-milligram high dose program.

If those data continue to support that Aflibercept eight milligrams provides extended dosing duration without compromising on safety and efficacy.

Aflibercept eight milligrams has the potential to complement and enhance our retinal franchise.

With Dupixent, we're delivering on our goal of transforming the treatment of type two inflammatory diseases.

2021 global sales of Dupixent were $6 2 billion, representing 53% growth for the year.

Looking ahead, Dupixent's outlook is bright. There are significant.

Opportunities to increase market penetration rates in approved indications and we are in the midst of a wave of new data submissions and launches and potential new indications further fueling Dupixent's growth.

In oncology, Libtayo continues to thrive in the approved non-melanoma skin cancers.

We look forward to potentially tie up plus chemotherapy approval later this year in the broader population of non small cell lung cancer patients.

Our oncology footprint continues to expand. We have advanced many candidates and combinations into the clinic with a range of antibodies by specifics and co-stimulatory by specifics to cause many cancer settings.

This year, we look forward to sharing what we hope will be groundbreaking data in difficult to treat solid tumors, such as prostate cancers and ovarian cancers, all of which are conditions with historically low response rates to immunotherapy.

We also remain encouraged in the progress of our maturing CD 3 bi specifics we are confident in the overall safety and efficacy profile for a [inaudible], our CD 20 by CD 3 bio specific.

We are forging ahead with our AG and 5058, BCMA by CD 3 bio specific.

Which we believe will play an active role in the treatment of multiple myeloma given its competitive profile.

Last but not least we are immensely proud of our rapid response efforts against COVID-19.

In 2021, [inaudible] our antibody cocktail was administered to millions of people globally, making a major impact during the darkest days of the pandemic.

Based on preclinical data, we recently announced that [REGN-COV] is heightened unlikely to be active against the omicron variant.

Appropriately the FDA mandate the emergency use authorization.

For [REGN-COV] limiting its use in the US in light of the Omnicom Varian being dominant.

Regeneron remains committed to helping fight the COVID-19 pandemic.

We are progressing next generation of antibodies that are active against all Macquarie on Delta and other variants of concern.

We're scaling up manufacturing efforts in completing the necessary requirements to begin clinical trials for next generation candidate.

In the coming months.

Concurrently, we are working closely and collaboratively

With the FDA and other global regulatory authorities to establish and defined clinical pathways to bring additional safe and effective monoclonal antibody treatment options to patients as quickly as possible.

As one of the leaders in the fight against COVID-19, our velocity, we platform technologies makes us uniquely positioned to promptly develops and deliberate potentially lifesaving medicines.

As the COVID-19 story transforms from pandemic to endemic.

We believe there will remain a significant opportunity to use our next generation monoclonals as a prevention for those immunocompromised individuals who do not respond adequately to COVID-19 vaccines. In addition, monoclonal antibody therapy is likely to play an ongoing role in treatment

for infected individuals.

In conclusion, 2021 was another high performance year for Regeneron with strong commercial results from our inline marketed products 30, plus pipeline candidates progressing to clinical trials, our discovery efforts firing on all cylinders.

A growing portfolio of highly productive external collaborations and our strong financial position with over 12 billion in cash and marketable securities Regeneron is extremely well positioned for the future.

Now, I'll turn the call over to George.

Thanks, Glenn.

I'll start by briefly addressing our novel monoclonal antibodies for COVID-19.

As Lynn mentioned, we are rapidly developing next-generation antibodies that routine potency against omnicron and other bearings of concern.

Early in 2019, we anticipated that the virus will mutate and thus began generating large pools of virus-neutralizing antibody candidates from both human survivors and our velocity in mice. We are continually evaluating and refresh this pool and now have next-generation candidates that based on preclinical studies.

Effectively neutralized omnicron and other bearings are concerned.

We're on track to initiate clinical trials with the first of these in the coming months.

In addition, we are in discussions with the FDA regarding how to streamline the development program for monoclonal antibodies, considering the unwavering unmet need and demand for these medicines, especially with potential.

Future virus variants in mind.

As Len already highlighted, since we believe that monoclonal antibodies will continue to play an especially important role in the treatment and future protection of the several million immunocompromised people in the United States alone. We are committed to undertaking a development pathway that will make this possible in the near future.

Moving on to ophthalmology. At the upcoming angiogenesis meeting, we will present the final phase two data from the Liberty Center eight milligram Candela study in patients with wet AMD.

In this study, Aflibercept eight milligram given at the same protocol specified dosing schedule is currently approved Eylea two milligram met its primary safety endpoint with measures of drawing.

Numerically favoring the eight milligram dose over the two milligram dose.

These phase II results give us more confidence that the upcoming phase [inaudible] has

The potential to show that the higher eight milligram of Aflibercept dose can at least match the efficacy and safety of Eylea, but with more convenient dosing.

Moving onto Dupixent.

Building on the outstanding clinical success Dupixent has shown so far across a wide spectrum of allergic or type two inflammatory diseases.

The second phase III study in Prurigo nodularis recently met primary and key secondary endpoints maintenance it picks and diverse and the only systemic medicine to demonstrate such success in this indication.

These data confirm the results from the first phase III trial, where 60% of Dupixent patients met the primary endpoint of introduction.

Compared to 18% of placebo patients at 24 weeks.

Nearly three times as many Dupixent patients experienced reduced skin lesions compared to placebo as well.

Prurigo nodularis marks the sixth disease for which Dupixent has demonstrated profound benefit for patients providing convincing evidence that the IL four and IL 13 pathways inhibited by Dupixent are the key drivers of the type two inflammation underlying all of these diseases.

We have to appreciate how remarkable the Dupixent's story is in terms of the important benefit it provides with the many patients across this diverse set of clinical conditions.

Together with its well-established safety profile and highlight how Dupixent is delivering on its promise of providing a pipeline in a product.

At the upcoming [inaudible] in addition to the other important Dupixent updates, we will present pivotal results for the recent topline studies Nielsen and Phillip Esophagiti or EOE.

E O.

And for the first chronic spontaneous urticaria or CSU study.

EoE is a complex disease, and we are excited to share these data with the scientific community and patients. Our first regulatory submission for EoE in adolescents and adults is underway with regulatory submissions for Prurigo Nigel nodularis also starting in the first half of this year.

Complex disease, and we are excited to share these data with the scientific community and patients are first regulatory submission for <unk> in adolescents and adults is underway with regulatory submissions for Prurigo Nigel hours also starting in the first half of this year.

Anticipated flow a depiction related clinical data updates continues. We're planning on reporting resulted in additional phase III study in CSU. This time omalizumab experienced patients.

Also for the chronic [inaudible] or a carrier indication in the second half of this year.

These represents more difficult to treat patients or condition and present a higher bar for Dupixent.

We're looking forward to results of these pivotal studies.

Moving on to oncology and first Libtayo.

Progress in oncology portfolio includes pivotal readouts and regulatory filings for Libtayo presented and anticipate data readouts for our bi specifics as well as multiple upcoming milestones with novel diversified pipeline entrants.

As Len mentioned, the Libtayo chemotherapy combination for patients with non-small cell lung cancer is under review at the FDA with the Paducah date September 19, 2022, which could address a larger portion of the patients with lung cancer.

In haematology, at the American Society of Hematology annual meeting, we presented encouraging data for region 5458 or BCMA by CD 3 by specific investigated for relapsed or refractory multiple myeloma.

With safety data that has shown no grade three or higher cytokine release syndrome to date.

And strong efficacy data, we believe our investigational agent is promising and has the potential to be competitive in this indication.

We are planning on investigating this product for earlier lines of myeloma therapy in combination with standard of care and are excited about the combination was inappropriate co stimulatory by specific.

To further enhance responses.

What's your next demand our CD 20 by CD 3 Bispecific has the potential for best in class efficacy profile in both balicki lymphoma, and diffuse large b cell lymphoma, and our updated step up dosing protocol may mitigate safety concerns and decrease the need for hospitalizations to manage cytokine release syndrome.

In terms of progress of our bio specifics of solid tumors.

As previously disclosed we are observing early signs of activity for our MX 16 by CD 3 bispecific monotherapy developed for late stage ovarian cancer.

We are excited to be sharing these early data later this year. In addition to monotherapy MX 16 by CD 3 Bispecific has been tested in combination with Libtayo and in a first of its kind in a combination trial with a MX 16 by CD 28 Bispecific.

These combinations are in early stages are advancing through dose escalations.

Later this year, we are hoping to sharing initial results for our unique bi peril topic met by met antibody.

Studied in advanced non-small cell cancer patients with met protein alterations. Early signs of clinical activity we've observed so far with the naked met by met by specific antibody, especially in patients with met overexpression bode well for our follow on agents the met by met by specific antibodies.

Drug conjugate, which is now enrolling patients in a phase one study.

We're also excited about our early-stage EGFR by CD28 [inaudible] Bispecific program for lung and other cancers.

With prostate cancer, we are expecting initial readouts from our first co-stimulatory Bispecific TSMA by CD 28 later this year as well.

PSMA CD28 is progressing through dose escalation in combination with Libtayo.

We are excited about the potential of our broad oncology portfolio, which includes multiple phase one two and three assets.

As many are beginning to believe the future is going to involve the right combination of targeted immuno therapy agents.

Concluding with our Regeneron genetics medicine efforts, we and our collaborators have made significant strides in expanding the capabilities and scale of our groundbreaking work in genetics medicines.

In terms of our SI RNA collaboration with Alnylam.

Alnylam HSD is progressing through healthy volunteers and initial data in Nash patients are anticipated.

By the middle of this year.

With the C five SI RNA and antibody combination.

Another first of its kind healthy volunteer data were presented at Ash, demonstrating PK and PD results supportive of the monthly subcutaneous dosing regimen selected for pivotal studies phase III studies of the combination for paroxysmal nocturnal hemoglobinuria or [PNG] were also initiated.

Recall in PNG we are planning to test our combination in both naive and switch patients tested against standard of care therapies, including [inaudible].

Also Alnylam has recently announced submission of the CTK applications on island APP. The industry's first-ever investigational.

RNA AI therapeutics for CNS diseases.

This agent will be valid in both a relatively rare disease, driven by amyloid precursor protein known as cerebral amyloid angiopathy, where see a a as well as an early onset Alzheimer's disease.

Finally later this quarter, we didn't tell you will provide an update on our joint TTR. CRISPR based knockout program for transfer Eaton amyloidosis.

This will include additional ascending dose interim clinical data from the Polyneuropathy arm of the ongoing.

[inaudible] 2001 phase one study we have also expanded the stay to include patients with Transtar Eaton amyloidosis with cardiomyopathy, which we believe will address an even broader patient population.

We are very excited by our large and diverse pipeline.

Of [SI RNA] candidates that we are advancing with Alnylam, ranging from targeting the liver, the brain and the eye. As well as our CRISPR based approaches in collaboration with [inaudible] and our viral targeted gene delivery programs such as [with Dupixent] while still early we think these groundbreaking approaches have the potential

to change the practice of medicine.

And with that, I will turn the call over to Mary. Thank you, George. Our fourth-quarter business performance demonstrated the strength and resilience of our inline brands and create the foundation for commercial success as we prepare for future launches. Starting with Alnylam, we recently announced fourth-quarter US net sales of 1.55 billion.

And 5.79 billion in 2021. This represented 17% year over year US growth for the full year, which is noteworthy for a band 10 years post launch. And [Leah.]

Reached a record share across all approved indications and this is the recognized leader in a category that continues to grow due to favorable demographic trends. Alnylam remains physicians top choice for patients, which indicated retinal diseases due to its demonstrated efficacy safety and dosing flexibility and unsurpassed real-world experience.

With more than 40 million administered injections worldwide. We are also excited about ongoing strategic initiatives that position, our retinal franchise for future growth.

Such as our educational efforts in place across our existing indications, where many patients don't receive the treatment they need. Beyond Alnylam. We are encouraged by promising early results for high dose of Aflibercept eight milligram, which is supported by these three clinical results potentially represents next-generation treatment for

Range of eye diseases. Turning to Libtayo. The global net sales in the fourth quarter were 121 million.

US net sales reached 81 million in advanced cutaneous squamous cell carcinoma, which currently drives the majority of performance. Libtayo is the number one systemic treatment and we saw steady growth as the market continued its post-COVID-19 recovery.

In advanced basal cell carcinoma Libtayo is also rapidly being established as standard of care in patients who have progressed or are inappropriate for hedgehog inhibitors building on our strength and non-melanoma skin cancers.

In advance, non-small cell lung cancer, we are making progress in the launch of our monotherapy indication.

With a steadily growing prescriber base. There is also significant opportunity in the chemotherapy combination setting and if proved, Libtayo would be available for a much broader range of first-line lung cancer patients and for monotherapy alone. Our experiences that medical oncologists consider combination treatment first.

And reserve monotherapy for a much smaller group of patients, which in part has limited uptake in lung cancer today.

Turning to our cardiovascular franchise [inaudible].

Our treatment for patients with each of US H was successfully launched in 2021 and it's already the standard of care, we continue to see initiations in both switch and category naive patients. In 2021, we are focused on employing innovative efforts to identify patients not currently diagnosed with HOSH.

Onto Dupixent, which grew 51% in global net sales in the fourth quarter year over year to $1.77 billion.

In the US. Net sales grew 46% to 1.35 billion. Dupixentis well-positioned for ongoing rapid growth based on significant unmet need in existing and potential new disease areas like anticipated expansion into even younger age groups and new geographies worldwide.

In atopic dermatitis prescribing trends are strong across the spectrum of moderate to severe disease.

Dupixent is health care specialists first-line systemic treatment of choice due to several highly differentiating product characteristics, including its dual anti-IL four and IL13 mechanism of action compelling efficacy and rapid symptom relief well-established safety profile with no risk of serious infections.

Future immuno suppression and clinical data in children as young as six months.

If approved, we look forward to expanding to Dupixent skin indications for babies and young children with atopic dermatitis as well as two new dermatologic indications.

There are no currently approved biologic medicines for Parag and Nigel Rs, where we estimate approximately 75,000 patients may benefit from it makes sense in the US alone. We're also progressing an important opportunity to help chronic spontaneous urticaria patients.

It is also steadily growing and highly competitive asthma space, we see ongoing potential to differentiate it takes it in moderate to severe disease to its competitive profile.

Including a broad label that allows us in uncontrolled steroid dependent patients regardless of their central levels as well as used in patients as young as six years of age. Dupixent is also the preferred treatment of ENTs and allergists and chronic rhinosinusitis with nasal polyps.

Regardless of prior surgery and contributes meaningfully to our business.

We are also progressing our lunch transfer send it felt like esophagitis gastrointestinal disease with substantial unmet need we estimate at least 50,000 patients in the US could benefit from detection. If approved we've received positive feedback from key opinion leaders on the strength of our data.

A suitable treatment alternatives for this serious disease.

In summary, in 2021 our commercial team delivered strong growth across the portfolio.

I mentioned a new launch opportunities position us well for future growth now.

Now I'll turn the call over to Bob. Thanks, Maryann.

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

Regeneron's fourth quarter capped off a strong year. In the quarter, we delivered top and bottom-line growth driven by strong execution within our core business.

Fourth quarter total revenue grew 104% year over year to $5 billion.

Excluding revenues related to the COVID-19 antibody cocktail, total fourth-quarter revenue grew 17% year over year to $2.7 billion, demonstrating continuing strength of our core business.

Fourth-quarter total diluted net income per share was $23.72 on net income of 2.7 billion.

Starting with [REGN-COV]. In the fourth quarter, we delivered the remaining 1.1 billion doses from our September 2021 US government supply agreement and recognized $2.3 billion of US net sales.

In accordance with our global collaboration with Roche the amount of manufactured products supplied by each party to the global market resulted in the recognition of a true up payment related to Roche's share of profits. As a result in the fourth quarter, we recognized a $260 million charge in cost of goods sold and recorded no Roche collaboration revenue.

<unk> Roche collaboration revenue.

As mentioned, we completed all deliveries under the September 2021 US government supply contract in the fourth quarter with the FDA's recent amendment to reject Kobes emergency use authorization, we do not expect to record any US [REGN-COV] sales in the first half of 2022.

I will now move to our collaborations starting with Bayer.

Fourth-quarter, 2021 X US Eylea net product sales as reported to us by Bayer were 934 million growing 9% on a reported basis and 12% on a constant currency basis. Total Bayer collaboration revenue was $372 million of which we recorded $354 million for our share of net

Profits from Eylea sales outside the US.

Total Sanofi collaboration revenue was $518 million in the fourth quarter of 2021, despite seasonally higher fourth-quarter operating expenses our share of the profits from the commercialization of Dupixent and [inaudible]

was 388 million, which compares favorably to our share of profits of $230 million in the fourth quarter of last year.

Moving now to fourth quarter 2021 operating expenses. R&D decreased slightly to 639 million, primarily due to lower spending on [REGN-COV] development as compared to the fourth quarter of 2020, SG&A expense increased 30% year over year to $495 million, primarily due to costs related to.

Growth initiatives for Eylea in higher headcount related costs.

Cost of goods sold were 559 million primarily related to [REGN-COV] manufacturing costs and as I mentioned earlier the recognition of the 260 million true up payment to Roche for their share of profits related to the COVID-19 antibody cocktail.

Finally, the fourth quarter 2021 effective tax rate was 12.7%.

Shifting now to cash flow and the balance sheet for the year, Regeneron generated $6.5 billion in free cash flow and ended the year with cash and marketable securities less debt of 9.8 billion.

In the fourth quarter 2021, we exhausted the remaining balance on our 1.5 billion share repurchase authorization and in November we announced a new $3 billion share repurchase authorization. Across both we repurchased approximately 850 million of shares in the fourth quarter of '21. We continue to be opportunistic buyers, where we see.

Dislocation between our stock price and our intrinsic valuation.

Let me conclude with our initial 2022 outlook in guidance. As I mentioned earlier, we did not expect to record any US [REGN-COV] sales in the first half of 2022. For US praluent throughout 2021 we observed significant category and competitive pressures, we expect these pressures to accelerate throughout 2022.

And now for our 2022 expense guidance for Mark for R&D, we forecast or 2022 R&D expense to be in the range of 2.8 billion to 3 billion as we highlighted throughout 2021 critically important development programs are advancing in 2022 including the late-stage randomized studies versus

branded comparators for the lag three Libtayo combination BCMA by CD 3 NC 5 programs in development expenses to advance next generation antibodies against COVID-19.

For SG&A, we forecast or 2022 SG&A expense to be in the range of 1.65 billion to 1.77 billion based on our initial plan, we expect SG&A expenses to be spread evenly across the quarters in 2022 for Cogs.

We forecast 2022 product gross margin on a percentage of net product sales to be between 90, and 92%. We expect cost of collaboration manufacturing to be in the range of 750 million to 830 million driven by continued growth in orthopedics and franchise and finally, we anticipate our '22

effective tax rate to be in the range of 13% to 15%. A complete summary of our full-year guidance is available in our press release issued earlier this morning. In conclusion, our core business continues to advance and strengthen with growth continuing across our existing portfolio and investments.

And our R&D engine supported by our strong balance sheet, we remain well-positioned for sustainable long term growth.

Thanks, Bob, Michelle, that concludes our prepared remarks, we'd now like to open up the call for Q&A. With many callers in the queue and we want to ensure that we're able to address as many as possible. We'll answer one question from each caller before moving to the next. Please go ahead, Michelle.

As a reminder to ask a question. Please press star then one. If your question has been answered and you'd like to remove yourself from the queue, press the pound key.

Our first question comes from Evan Siegelman with BMO. Your line is open.

Hi, all. Thank you so much for taking my question. You touched on your solid tumor oncology franchise, specifically the met by met.

And Mark 16 by CDP bi specifics that were supposed to get this year. Can you elaborate a little as to kind of what we should be expecting with these data readouts and how that could inform potentially pivotal trials or registration path? Thank you very much.

Yeah. These are both being evaluated in late stage patients.

Who have essentially failed all existing therapies and obviously the exciting would be if one showed evidence of convincing.

objective responses that were durable in these settings and those would certainly inform how to move forward on these. And we've already announced that we've been observing encouraging early signs of efficacy and we will be elaborating on these and giving the details in these future presentations.

Great. Thanks, Michelle if we go to the next caller, please.

Our next question comes from Carter Gould with Barclays. Your line is open.

Good morning. Thanks for taking the question.

Maybe I'll just pick on the elephant in the room for Len and Maryanne would love to get your thoughts on.

As you think about the Eylea franchise in the context of.

What looks like a very accommodating label on first the mab and their pricing as we think about the implications for your high dose label and commercial positioning.

Yeah, I can get into the details, but we don't see [inaudible] as a transformative therapy or any kind of notwithstanding any label, it's very hard to see when you look at it as passionately any scientific evidence.

Horace Mann as a transformative therapy or any kind of notwithstanding any label, it's very hard to see when you look at it as passionately any scientific evidence.

For the contribution of [inaudible] blockade.

People forget nobody has a greater interest and would love to see [H2] blockade.

Nobody has a greater interest and would love to see aims to blockade.

Being a valued given that George and his colleagues were the ones who discovered and Clos managed to the first in the world on that but there's really no evidence that we can see where you separate it out. So what we're seeing here is

A higher dose of [inaudible] relative to Lucentis.

And possibly on a molar basis relative to Eylea.

Possibly on a molar basis.

Relative to Eylea.

We remind everybody that a lot of lessons were learned here. And one of the biggest lessons as efficacy is super important, but well beyond that is safety and nothing right now contract that I don't know almost 50 million injections.

A lot of lessons learned here and one of the biggest lessons as efficacy is super important, but well beyond that is safety and nothing right now contract that I don't know almost 50 million injections.

Has been given worldwide with Alnylam so we felt pretty good. Competition is always good obviously competition is going to eat into our products, we suspected terrorists or it may take a lot of the oh of its share initially from Lucentis, but we'll see. Mary might want to elaborate. Thank you.

Certainly to give some very early market feedback that we're getting from key opinion leaders is that they don't see [inaudible] product that potentially is a game-changer and that the dosing is complex and their remaining questions on the clinical trial design and of course as Len mentioned safety. More importantly, I'll go back over

To Eylea, where we certainly are establishing new product as standard of care and more question indications with great flexibility of dosing indications experience real-world evidence pre-sell strange in busy times. So we look forward to strong performance going forward and on Eylea and we're very optimistic about what.

Could be a next-generation product with our own Aflibercept eight milligram high dose product if the phase III data works out.

Michelle. Let's go to the next question.

Our next question comes from Tyler Van Buren with Cowen. Your line is open.

Hey, guys. Good morning, and thank you very much for the question. So for your next-generation COVID antibody cocktail, it looks like it's sort of entering the clinic in the coming months. So was there a slight delay versus the prior Q1 guidance and you referred to FDA streamlining development of monoclonal antibodies. So can you give us your latest thoughts on how long it might take to get to market.

I noticed Bob mentioned that there won't be sales in the first half. So just curious if we could see something in the second half.

Yeah, George can comment on what he thinks is necessary, but I just wanted to be clear I don't think there's any delay whether we come in just at the end of this quarter or early in the next quarter or thereabouts and it's tough to exactly estimate when we will start but we're scaling up and were wrong forward George can comment on some of the global

And US regulatory considerations in guidance is that we go about thus far.

Yes. There's not much to add I mean, we're continuing to discuss with regulators what the program is and what are the abilities as was done with vaccines to expedite.

The development program as compared to what was necessary.

For the first generation agents developed using the same platform. So we will update that as as as we learn more George there's some confusion.

Just maybe you could clarify it.

Our next generation of antibody works on just omicron or does it work on all of them?

<unk> own condos or work on all of them Oh, yeah.

[inaudible] As I mentioned in my script. So obviously, we have one of the largest collections of antibodies to choose from and what we do as a variant emerges is we select new candidate antibodies that will work against the new variant, but will also retain

Their activity against the previous variance of concern and that's exactly the candidates that we're advancing right now they work against Omnicom, but they worked against Delta. They work against all the other variance beforehand anything any comment on cell overcrowding or do you think it'll work there too well yeah, obviously, we take all these things.

Into consideration and so.

When a new variant that looks like it could be coming along that might be important. We certainly have made sure that the candidate that we're advancing now we're gonna be active against all of those as well.

Great. Let's go to the next question.

Our next question comes from [inaudible] Richter with Goldman Sachs. Your line is open.

Good morning. Thanks for taking my question.

Could you just speak to the [RNAi] programs? I think we're gonna get first data this year from [ALM ATP]

From that program and how do you think about the optimization of delivery to the brain and what we might see and how the C5 program can be differentiated.

Okay. So you're asking about the brain in CNS in the APP program, but you're also asking about C5.

So, yes, with the brain obviously.

As we all know there have been disappointing results with antibodies that have been delivered to try to decrease APP levels. They work in a fundamentally different way one of the problems that they caused it causes they think famous.

Inflammatory syndrome that may complicate activity so.

Obviously, the hope of SI RNA programs as they work by a completely different mechanism. They will actually decrease the production of APP allowed to be cleared by normal mechanisms as opposed to letting it be made continuously at the normal rates and then trying to remove it by artificial mechanisms that they themselves may

Hope of SA RNA programs as they work by a completely different mechanism. They will actually decrease the production of a P. P N loud to be cleared by normal mechanisms as opposed to letting it be made continuously at the normal rates and then trying to remove it by artificial mechanisms that they them.

be toxic, ie the antibody efforts. So that's why they may be fundamentally different.

Importantly, we're exploring this not only in Alzheimer's disease as we all know. It's not as if the early results in Alzheimer's disease are going to really address the important endpoints.

Exploring this not only in Alzheimer's disease as we all know it's not as if the early results in Alzheimer's disease are going to really address the important endpoints.

That is cognition in efficacy and slowing down cognitive decline and so forth, they're going to be looking at levels of the biomarkers and so forth. That's why we're also excited that we are developing the same exact agent.

In some ways a much more rapidly progressing, albeit much rare disease known as cerebral amyloid angiopathy or CAA because

The ability to both look at the biomarkers, but also more importantly look at important efficacy parameters is going to allow us to proceed much faster.

And much smaller numbers of patients.

And then we maybe over the next couple of years able to establish both definitive efficacy, but maybe even get this [agent] improved in those indications and that will certainly be.

Wait.

Quite an advance for the entire field of these types of diseases and particularly for the first.

For the entire field of these types of diseases and particularly for the first.

SI RNA that's going into these diseases. So we are very excited about these programs and we have a very large pipeline of other CNS diseases.

And targets that we are going forward in addressing will fell on my own. So it's a very important part of our collaborative efforts with them, which also include a large number of targets in terms of genetic targets genetically validated targets and diseases in the eye, let alone outside of the eye such as for example.

In the liver and that brings us to the C5 that you asked about so as we all know people are taking you know.

Single types of approaches to target C5, you know, some people might have an antibody is now some other types of approaches and so forth. What we realize is that if we could combine and SI RNA.

With an antibody we might have really not only combining the unique advantages of both but incredible synergies and what do we need.

Antibodies have the highest effectiveness because essentially they can bring down activity levels almost to zero, but because of the high target load you have to give these antibodies and these are all the existing approved antibodies and those that are under investigation by other sponsors you'll have to give them a rather large amount.

Have them in relatively frequently so antibodies are great, but by themselves you need to give a lot of antibodies to deal with the high target look SA RNA is a greater reducing the target load, but they don't get you to really almost zero activity and that creates problems, we already know that by putting the two together.

Now get the best of both you reduced the target load and you allowed now a much smaller amount of antibody to control activity hopefully completely. So there really has tremendous synergy with these this is the first of its kind that is combining S. Irony with antibody. We think there is a very exciting.

Potential for this to deliver best in class, both efficacy, but also convenience and dosing regimen, we're going for convenient subcutaneous self administration once a month, which would really I think be game changing for the field and for these patients, but we're also moving these programs also.

Other related indications as well so we're very excited about this combination approach for FIFA and for these types of indications, but once again just like what we're doing in CNS just like what we're doing with these are really franchise and portfolio opportunities. I mean, you can just imagine.

If combining and there's so many other settings, where this could be very useful combining the benefits of S. I RNA and antibodies had bringing them together could really be game changing not only in this area, but in many many other areas and who better to do this than bringing together the leading S iron.

In a company and the leading antibody in Biologics company in Ireland and Regeneron. So we're very excited about the individual programs.

With some of these soi earnings but also these incredible combination opportunity, bringing these two incredible technologies together, taking the advantages of both.

Great Michelle let's go to the next question.

Operator can we go to the next question. Please.

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

Good morning, everybody. Thank you for the great resolve in taking the question why is the Marianne can you talk a little bit about the VEGF market. It seems that we've been seeing coming close to a year for a better than 10% growth and I was wondering how much of this is catch up versus how much is this is just higher natural market growth rate.

Versus what we're expecting and then can you talk a little bit about the dynamics of what it takes to compete in this market kind of like how long do they get a J code how long to have contact with that with the different practices essentially when will it how long would take a competitor coming online whether an innovative a biosimilar to really be able to effectively compete in that market.

Sure Ronny happy to take it and I'm going to take the end of your question first and I first would say that a competitor or a new entrant to the market's ability to compete is really going to be based on the differentiation of their product profile the quality of their studies and the confidence and enthusiasm.

The key opinion leaders have on the product as it comes in so I do think it differs.

Differentiation matters quite a lot in the case certainly our growth in the past year has been quite pronounced we've captured not only the market growth, but we've also captured competitive share gain more than any other products that our market share today Friday. He is approaching 50% of the overall category and 70.

5% of the branded category and we picked up several sharepoint in the last year and this very large category.

Let me go back now to new entrance, you asking that timing of J codes and that is important.

Quality of product as I mentioned reflects confidence and how well it performs but it is a six month period before a new product received a permanent J code. So in that window of time, especially in a product, which is buy and bill there's always the concern on reimbursement theres not experience not with the product, but there's often.

Not experienced with applying for reimbursement under the J code that period of time is six months into my earlier comment private confidential theory based on profile.

I hope that covered.

Most of what you had in that the only thing I think I probably missed is.

And he said just category growth going forward that is a little bit complicated because we're comparing to recovery in the markets market opposite the COVID-19 period to some extent. However, there is growth of the category.

Cause the patient demographics, and because of education and I'll give you is an example of patients who are diagnosed with Tammy only about 47, 48% of those patients are treated and.

Those are are those that are diagnosed there's only if you took all D. M. D ph patients that exist only about 25% of those patients are treated so there's still a tremendous unmet need in the marketplace and we certainly will work hard to educational initiatives to make sure that we performed very well as we have been in on an ongoing basis on on all of our.

So I hope that helps Ronnie can I, just say one thing Ronny on Mac, which is that it's it seems like it's been every single year for the last decade, there has been a threat to eylea.

Alrighty of number of people have predicted.

It would be the next.

It seemed to displace idly and along the way.

The barriers have changed and the most important barrier, but I think now exist is safety and that's safety even foot.

Biosimilar same private safety for a new product, which with reported differences.

People have learned that the eye is a very sensitive place and haven't given scores of millions of injections of Eylea is a great deal of confidence out there I think it's going to take them.

Matter of time behind J codes meeting with practices before that level of confidence is significantly displaced.

Michelle Thanks go to the next question please.

Yeah.

Our next question comes from Robyn <unk> with Truest airline is open.

Hi, Robin if your telephone.

Hello, Good morning, sorry about that.

This is Michael on for Robyn.

This is a really quick question on <unk>.

Yesterday.

Right.

Bio disclosing their general exercising its option to license an allo car T. Can you just comment on the move towards Allo car T and why this particular.

At the end of the question.

He was a little hard to hear the question Yeah, I said, yeah, but what was the question could you repeat why does that matter, which of the importance of it.

So well as you already referred to it I mean this is.

A advance in the car T space, because obviously, so far the approved approach and upcoming approaches are all.

Dependent on getting customized individualized autologous car T cell and the results coming from this relatively novel Gamma Delta approaches the first game that Delta data in the world showed.

Show that you could give allogeneic cells and get very remarkable and very small numbers with very remarkable.

Response rates and so this would take the customization autologous approach.

And take it to two.

To the autologous.

Non autologous or allogeneic way, which will really.

Could potentially revolutionize.

The treatment paradigm here and so we've been long term collaborators with that asset.

And we're pretty excited about.

This allogeneic approach and so we're investing in it.

Great Michelle let's go to the next question. Please.

Our next question comes from Matthew Harrison with Morgan Stanley . Your line is open.

Great. Good morning, Thanks for taking the question I was hoping for one on on coach them.

I know we're supposed to get some data. This year can you just maybe help us think about dosing levels, how youre thinking about safety currently and and and just in terms of initial data you know what we should expect to see whether it's just about safety or we should really start to have some idea on efficacy as well. Thanks, yeah yeah.

That's a great question and as we all know this pathway.

Was explored many years ago now and led to.

Unfortunately, very dramatic safety concerns to patients and that sort of killed the field.

So because of those concerns and that we were re exploring utilization of this very very powerful co stimulatory pathway.

To add to the combination of other immunotherapies the FDA appropriately.

Asked us to move very very slowly so the the first endpoint of most concern was the safety endpoint and of course first do no harm.

And I think that what we announced is that an ongoing dose escalation study. It's only been recently that we have achieved what we think are therapeutic dose.

Potential levels, and and now and we have I think.

The thing that we have said publicly is we successfully.

Cost in terms of getting to these dose levels this very concerning and potentially.

Gamestop, Inc.

Safety hurdles and so now that we're at the potentially therapeutic.

Dose levels, we are now hoping to focus on efficacy and remember in several of these programs, but for example, our prostate program, we're going in a setting where at least if properly identified.

There are essentially no or very rare responses to PD one.

In these types of very carefully characterize prostate patients I mean, theres been very little hope except for rare subsets of characterized patients that have mutations and stuff with <unk>.

For the PD, one immunotherapy class. So if we can show essentially almost any responses.

These types of.

Gary or a couch and hard to treat patients with PD. One alone you know a combinations with our hosting for prostate cancer I think there's a real reason to believe that our scientists have successfully figure it out.

Clearly novel way.

Way of taking advantage of this long known very exciting and powerful but dangerous pathway that we may have figured out a way to take advantage of it and I've done it in a safe manner. So this is what we're hoping to see this year that now that we are at these levels, we have gotten there without <unk>.

Activating these huge safety concerns that were previously seen.

Essentially seeing any objective responses in this setting would really be potentially game changing and so we're looking forward to being able to tell you about this possibility later this year.

Operator, we have time for two more questions can we start the next one please.

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

Hey, good morning, guys. Thanks for taking the question I was wondering if you could frame expectations for the pending update on your program with intaglio that we're getting here near term.

What new might we see relative to last summer's preliminary data disclosure. Thank you.

Yeah, we don't want to get too far in front of our partner George's remarks already indicated.

The kind of things will city, but we should leave it up to and Telia.

To comment beyond what George said about.

Looking at the dose escalation.

Including safety and knockdown of T T R, but Italian should have the benefit of making some comments that may be just a couple of obvious points, there's that feeling anybody's thunder, but obviously the initial results weren't incredibly exciting and revolutionary honestly the first systemic based.

Christopher therapy, I mean, all this excitement for almost 20 years Nobel prizes and all of this I mean, it is incredible that together with our Intel yet colleagues I mean this represents the first ever systemic use of CRISPR to actually modify human genetic gene, but obviously one of the most important.

Things that one will see as the whole promise of this approach is duration that is you are modifying the gene and hopefully you will never have to treat that patient again, okay, and that's part of the dream and the hope with these genetic chores and so.

This is of course, one important thing that we hope that we'll we'll be seeing from the follow up data.

The duration, which is what is really game changing you can permanently cure these patients that's.

That's the theory here by permanent change in their jeans, and so the longer you follow them up the the more you can validates the duration with of course, the appropriate safety and continue to keep the dream alive that this whole new approach could really be game changing for import.

And appropriate clinical indications operator, we have time for one quick last question.

Our last question comes from Mohit Bansal with Wells Fargo. Your line is open.

Great. Thanks for taking my question and congrats on the progress maybe another one on <unk> and given that your competitor also has lucentis, which is facing biosimilar. This year are you seeing any rumblings off you know potential bundling our attractive pricing for those blue bars combined debt could be paid as a strategy.

To take an idea and how much does Bayer, let's just provider matter in this market. Thank you.

Sure. So you know at a high level I'll share just didn't talk about our own business is certainly you know we have a strong market understanding and work closely with all of our customers across the market segments. When it comes to have another company might be looking at there are there pricing our strategy, it's probably best I, let them.

And I appreciate the interest in the category and the question.

Thanks, everyone that concludes today's conference call and thanks for your interest in Regeneron, the IR team and Bob Landry is here to take any questions that you may have.

Everyone have a nice day.

This concludes the program you may now disconnect.

Okay.

[music].

Q4 2021 Regeneron Pharmaceuticals Inc Earnings Call

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