Q2 2022 Regeneron Pharmaceuticals Inc Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
George Yancopoulos: The patient discontinued therapy due to a grade three immune-related adverse event of the skin that was considered to be a recurrence of a pre-existing condition.
Unknown Executive: I guess we're ready for the next question.
Unknown Executive: I guess maybe a two-part question here.
Unknown Executive: To raise your hand during Q&A, you can dial star 1 1.
Unknown Executive: To raise your hand during Q&A, you can dial star 1 1.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Unknown Executive: Thank you, Bella.
George Yancopoulos: This is consistent with previous trials with anti-PD-1 immunotherapy, where an IRAE's have been reported to occur at a higher rate in responding patients.
Unknown Executive: Thanks, George.
Unknown Executive: First, maybe talk about the plan to sort of mitigate this, you know, either before the high-dose format or even after.
Unknown Executive: Good morning, good afternoon, and good evening to everyone listening around the globe.
Unknown Executive: Bella, next question, please.
Unknown Executive: And I guess is the plan with the high-dose, one would expect that switching paradigm for the high-dose ILEA would be easier than the BISO.
Unknown Executive: Thank you for your interest in Regeneron, and welcome to our second quarter 2022 earnings conference call.
Okay.
Unknown Executive: An archive of this webcast will be available on our investor relations website shortly after the call ends.
Welcome to the Regeneron Pharmaceuticals second quarter 2020.
Unknown Executive: Joining me today 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.
So your earnings conference call. My name is stellar 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 today's conference is being recorded.
Unknown Executive: After our prepared remarks, we will open the call for Q&A.
Unknown Executive: I would also like to remind you that remarks made on this call today include forward-looking statements about Regeneron.
I will now turn the call over to Ryan Crowe, Vice President Investor Relations you may begin.
Unknown Executive: Such statements may include, but are not limited to, those related to Regeneron and its products and businesses, financial forecasting 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.
Thank you Bella good morning, good afternoon, and good evening to everyone listening around the globe. Thank you for your interest in Regeneron and welcome to our second quarter 2022 earnings conference call. An archive. This webcast will be available on our Investor Relations website. Shortly after the call ends.
Joining me today are Dr. Leonard Schleifer, founder President and Chief Executive Officer, Dr. George John Co founder President and Chief Scientific Officer.
Unknown Executive: 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's filings with the United States Securities and Exchange Commission, including its Form 10-Q for the quarterly period ended June 30, 2022, which was filed with the SEC this morning.
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 would also like to remind you that remarks made on this call. Today include forward looking statements about regeneron.
Such statements May include but are not limited to.
Unknown Executive: Regeneron does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.
Those related to regeneron and its products and businesses.
Business financial forecasts and guidance development programs and related anticipated milestones collaborations finances regulatory matters payer coverage and reimbursement issues intellectual property.
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.
Unknown Executive: In addition, please note that GAAP and non-GAAP measures will be discussed in today's call.
George Yancopoulos: No grade 4 IRAE's or greater than or equal to grade 2 cytokine release syndrome have been observed in the trial to date. There was one death that was considered unrelated to treatment. In this trial, IRAE's are being treated according to standard management practices used for checkpoint inhibitors.
Unknown Executive: Your next question comes from the line of Tyler Van Buren from Cohen.
Unknown Executive: Is that sort of part of the plan?
More complete description of these and other material risks can be found in regeneron filings with the United States Securities and Exchange Commission, including its Form 10-Q for the quarterly period ended June 30th 2022, which was filed with the SEC. This morning.
Unknown Executive: Information regarding our use of non-GAAP financial measures and the reconciliation of those measures to GAAP is available in our financial results press release, which can be accessed on our website.
George Yancopoulos: We are planning on sharing more detailed data from this study at an upcoming medical meeting.
Unknown Executive: Your line is now open.
Unknown Executive: And then the second part is our checks also indicate, surprisingly low awareness of this high-dose format among docs.
Unknown Executive: Once our call concludes, Bob Landry and the IR team will be available to answer any further questions.
Unknown Executive: Are these signals at odds with what you're seeing or is that correct?
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 your answer any further questions with that let me turn the call over to our President and Chief Executive Officer, Dr. Len Schleifer.
Thank you Ryan and thank you to everyone joining today's call.
General and had a strong second quarter with notable execution across R&D commercial and business development functions.
Total revenues increased by 20% when excluding contributions from our Covid antibody cocktail with net sales for Eylea to pixel Enlink tayo, each reaching new all time quarterly highs and growing by double digit year over year on a constant currency basis.
In addition to exceptional commercial execution, we made significant pipeline progress with three regulatory approvals to accepted regulatory filings and one positive phase III readout. We also completed the acquisition of Checkmate pharmaceuticals, and the third quarter purchase of worldwide rights to lift tie.
George Yancopoulos: Let me remind you that through extensive preclinical research, we hypothesized that augmenting T-cell co-stimulation alongside PD inhibition could be a key to turning immunologically cold tumors hot.
George Yancopoulos: These preliminary data for a PD-CMA by CD28 co-stimulated bispecific provide the first clinical evidence supporting the promise of our broader pipeline of co-stimulatory bispecifics in diverse solid tumors as well as hemologic malignancies.
George Yancopoulos: By combining these co-stimulatory bispecifics with both trials or with our CD3 bispecifics, we have the opportunity to create novel therapeutic synergies to address some of the most difficult to treat cancers.
George Yancopoulos: We look forward to partnering with the oncology community on this ambitious and potentially groundbreaking effort.
George Yancopoulos: In addition to these exciting early data, we anticipate several important oncology milestones in the second half of the year. At the upcoming ESMO conference, we will provide updates on Pheanlamab, our LAG-3 antibody in combination with Leptile in a Phase II cohort of metastatic melanoma that will hopefully confirm the encouraging combined efficacy that we previously reported in this setting.
Oh from Santa Fe.
Both of which we believe will strengthen our oncology franchise and the near medium and long term.
We also reported today are preliminary but promising anti tumor activity and safety data for Regeneron 50, 678 R. P. SMA by CD 28, co stimulatory Bispecific in combination with the lib tile in patients with advanced metastatic castrate with.
Just in prostate cancer, George will have more to say on this shortly but we believe this represents an important step towards validating our co stimulatory approach to fighting cancer and potentially advancing the science.
Immuno oncology.
Turning to our commercial performance in the second quarter Eylea Global net sales grew 13% at constant exchange rates to $2 5 billion.
In the U S. Eylea net sales were $1 6 billion up 14% year over year and outperforming anti VEGF category growth of approximately 8%. Despite new competition at least share was approximately half of the anti VEGF category and 75%.
Among branded agents affirming its status as the gold standard anti VEGF therapy.
We believe a flavor set represents a significant potential growth opportunity going forward, given the favorable demographic trends as well as the potential for a flipper set eight milligrams to augment the category and complement our retinal franchise.
Regarding our investigational flip a set eight milligrams the goal of our clinical program is to evaluate what the visual acuity among wet AMD and D. Ami patients can be maintained or improved compared to eylea, while extending the interval between doses equally important is maintaining the high bar for.
Safety that has been set by Eylea over the past 10 years 55 million in Jackson's worldwide and 8 million patient years of experience. We anticipate pivotal results in late quarter, three or early quarter, four and with supportive data and BLA submission completed.
By early 2023.
The pixel continued to grow at a remarkable pace after five years and more than 450000 patients treated since launch. According to global net product sales were $2 1 billion, an increase of 43% at constant exchange rates compared to last year.
Reflecting to pyxis differentiated clinical profile and the bill or the ability to effectively treat more and more patients with the type two inflammatory diseases, where it depicts and is approved.
In the U S. We saw growth across all indications, including initial contributions from atopic dermatitis patients as young as six months to five years of age and from eosinophilic Esophagitis, both of which are indications approved by the FDA during the second quarter.
And represents the first approved systemic treatment options for these patients.
We hope to add a third first in class indication with the pixel later this year in patients with Prurigo, Nigel Arris, which is currently under priority review with the FDA.
And oncology lip Tayo net product sales grew 25% globally at constant currency to 141 million in the second quarter of 2022, including 17% growth in the U S driven by non melanoma skin cancer indications and monotherapy non small cell lung.
Cancer.
We have long believed that the key to fully unlocking the opportunity in oncology is through differentiated combinations with leap tayo, possibly serving as a foundation for many of them.
That belief was the basis for our acquisition of the global rights to live time.
We plan to invest further in the tire based combinations pairing it with promising candidates in our oncology pipeline such as lag three antibody Coreana lab and many investigation of bi specifics as well as with candidates come external collaborations.
We continue to make progress with these slipped io combinations and intend to share initial data in the second half of this year from our emerging oncology pipeline, which George will discuss in more detail.
Regarding the Fda's review of our led Tayo chemo combo supplemental BLA for the treatment of non small cell lung cancer. We are pleased with the progress that we have made as the FDA continues its review.
However, we recently were informed that in F. D. A travel complication related to scheduling a routine clinical trial site inspection and eastern Europe will likely delay their decision until after September 19th could do per day, while any delay is disappointing and new site inspection date has been scheduled.
Therefore, we do not expect a lengthy extension of the review period, and we do not expect it to meaningfully impact our launch plans assuming FDA approval.
George Yancopoulos: In addition, we will present initial data for Ubimatumab, our MUC16 by CD3 bispecific in metastatic ovarian cancer.
Unknown Executive: You must be on mute.
Unknown Executive: And, you know, outside of, you know, actually just having the data presented?
Unknown Executive: We have to answer that.
We continue to actively work with the FCA, believing the ongoing review otherwise progressing well and all other elements of the review remain on track.
Regarding our COVID-19 response, we generally remains committed to combating the virus by developing additional novel antibodies. We continue to work with the FDA to establish a regulatory pathway for these antibodies.
George Yancopoulos: I would like to remind you that we have also combination studies ongoing with both co-stimulatory bispecifics and Leptile.
Unknown Executive: By the way, we don't market products before they were approved.
Unknown Executive: So it's not surprising that there is a non-awareness of a product that's an investigational product.
Could potentially serve an important role in protecting immuno compromised individuals who do not respond adequately to COVID-19 vaccines as well as treating infected patients, whom oral anti viral therapy is not appropriate.
In closing.
As I reflect on our performance during the first half of the year I'm very proud of our numerous achievements, which were only made possible by the dedicated regeneron employees around the world together, we have continued to serve patients in need while strength strengthening the foundation of the company and leveraging our financial strength.
Len Schleifer: With that, let me turn the call over to our President and Chief Executive Officer, Dr. Len Schleifer.
Unknown Executive: We don't hear a question, but maybe we could take the opportunity to amplify even a little, further and repeat what George said about the safety and the one thing.
Unknown Executive: Mary can comment on the other stuff.
Unknown Executive: Len?
Len Schleifer: Thank you, Ryan, and thank you to everyone joining today's call.
Unknown Executive: Can you hear me?
Unknown Executive: Let me take a start on some of the situation in market and perhaps George will add to that.
Unknown Executive: But first, let me comment that, you know, obviously we presented today very strong results on the growth of ILEA standard of care in the marketplace, both in the U.S. and the worldwide information.
Len Schleifer: Regeneron had a strong second quarter with notable execution across R&D, commercial, and business development functions. Total revenues increased by 20% when excluding contributions from our COVID antibody cocktail, with net sales for ILEA, Dupixent, and LibTile each reaching new all-time quarterly highs and growing by double digits year-over-year on a constant currency basis.
Unknown Executive: Sorry.
Unknown Executive: You know, today in the branded category, U.S. anti-VEGF category, we have 75% of the branded market.
To better position regeneron to achieve sustainable growth over time.
We are excited about the increasing commercial momentum for our core products and the important progress we have made in advancing our pipeline our strategy.
Unknown Executive: It cut out.
Unknown Executive: Yes.
As he continues to focus on investing in our internal R&D capabilities, while exploring potential collaborations that will enable us to fully realize the power of our science.
We remain confident in our strategy and in our growth prospects as well as in our ability to deliver breakthroughs for patients and value to shareholders now I'll turn the call over to George.
Unknown Executive: Good morning.
Thanks Lynn.
I will start with ophthalmology.
We are looking forward to the upcoming phase III readouts of the slip receptor eight milligram in patients with diabetic macular edema and in wet age related macular degeneration photon in patients with <unk> and pulsar and patients with wet AMD will test where the patients treated with eight milligram dosed every 12 weeks or every 16 weeks.
Unknown Executive: We have approaching 50% of the overall market.
Unknown Executive: So truly ILEA is the standard of care.
Unknown Executive: Thanks very much for taking the question.
Unknown Executive: You know, it's probably best that First Lab organization comments on where their product is being used.
Unknown Executive: I wanted to ask about PULSAR and FOTON, just to follow up, can you elaborate on the decision, to randomize patients to the 12-week and 15-week arms prior to assessing their response to loading doses?
Unknown Executive: I'll comment anecdotally that early, days the response has been fairly muted, fairly low-grade use in concentrated accounts rather than market-wide.
Can achieve none theory best corrected visual acuity at week 48 compared to the currently approved Eylea two milligram dosed every eight weeks.
Unknown Executive: As for the future, you know, we're very excited and optimistic that the Aflibrisate 8 milligram will represent a new standard of care with true durability of dosing, and the same type of efficacy and safety that we see with ILEA.
Unknown Executive: So we're really excited and, you know, certainly our clinical organization has put together trial designs that truly test the durability of the product.
Unknown Executive: And then we'll allow the commercial organization to determine what the best strategy is for launch if and when we get FDA approval.
Unlike studies from other sponsors in which patients were assigned to a dosing interval based on disease activity assessments.
Unknown Executive: Let me just add to that that it's important to point out that the reason why ILEA has become the leading anti-VEGF agent, branded VEGF agent, is because it allows most of the ILEA patients to go on longer interval dosing and have, and be very satisfied with the response.
Following the loading phase patients enrolled in the photon and cultural studies were randomized at baseline into one of the three treatment groups, which we believe will allow us to determine whether extended dosing can truly be achieved.
Unknown Executive: Now of course, as with any disease and situation, not every patient is going to do perfectly well. And we know that there's a small percentage of patients who do need more frequent ILEA.
Unknown Executive: And of course, if one has a new untested agent that doctors haven't seen, their hope and the place that they would first try in these small percentage of patients who don't, who are not doing well.
Unknown Executive: Since patients can only be rescued during that first year or moved down a dosing interval, and not moved up to a less frequent regimen, even though they might be doing well, doesn't this make the comparison to the babysmotonia and Lucerne studies difficult?
Unknown Executive: And of course, that's why it's being used in that setting.
The studies are positive and the high safety standard established with Eylea is maintained we believe our flavors have eight milligram would represent a significant clinical advance for patients and we would target a U S regulatory filing by early 2023.
Unknown Executive: And given this, how do you expect to communicate the data to the physicians when we see it?
Unknown Executive: Now our goal, of course, with the high dose of ILEA is to take now the best-in-class agent and hopefully produce even better results in terms of allowing these small percentage of patients who are being dosed more frequently, or even the patients who are now on eight-week regimens or 12-week regimens, to go to more extended regimens.
Unknown Executive: And that's the whole point of the design and the study.
Unknown Executive: So I don't think there's any surprises that it's the small percentage of very hard-to-treat patients where somebody would try an untested agent that they're hoping might work better.
Unknown Executive: But we have a real logical, rational way that we are now taking ILEA, bringing forth this high-dose formulation, and hope to extend the benefits that we're already seeing with this tried-and-true, in terms of both safety and efficacy, reagent, and even expand it and get even for these small percentage of patients, longer dosing, and even extend maybe everybody else.
Moving to depicts it which continued to deliver notable milestones in the second quarter of the year depicts and was recently approved in children with atopic dermatitis as young as six months old, making two picks up the first and only biologic medicine approved to treat atopic dermatitis from infancy grew adulthood.
Unknown Executive: Well, we have to admit, we were somewhat confused by the whole babysmotonia data and its meaning, and its intent because of the confusing study design, where basically only after you see how well patients are doing, you then shift them.
Unknown Executive: So if you take your best patients and you shift them, for example, to a Q12 or Q16 regimen, and you say, oh, X percent of patients can stay on this regimen, you're not really understanding how good your drug is and what percent of the patients can actually achieve that dosing regimen.
Unknown Executive: We know, and we've already published on this, that patients who do well can be dramatically, extended.
Unknown Executive: We're trying to answer a very different question, which we think is going to be very, very important, to the community, which is whether you can truly achieve extended dosing and whether you can prospectively put people into these dosing regimens and get substantial numbers of them to stay at these dosing regimens because we're giving the higher dose of ILEA, which we believe has this ability to maintain more patients at these longer intervals. We really believe that this would represent a significant clinical advance and would also, clarify how to use these drugs as opposed to the prior, somewhat confusing approach.
Unknown Executive: Thank you George.
Mary will talk more about this as well as about our recent earlier than expected.
The approval for a brand new gastro Enterology indication eosinophilic esophagitis or E O E. Since receiving approval in adults and adolescents, aged 12 and over we have reported positive data in pediatric patients with OA as young as one year of age our phase III study in children, one to 11 years.
Unknown Executive: Okay, that's helpful.
Unknown Executive: Just a brief follow-up.
Unknown Executive: In year two, people are going to be able to be...
Unknown Executive: I think we have to move to the next one.
<unk> met the primary endpoint with 68% of patients on the higher depicting dose and 58% on a lower depicts and dose achieving histological disease remission compared to 3% of children on placebo at 16 weeks yearly symptoms can be difficult to assessing these young patients. However, we also observed.
Unknown Executive: Okay.
Unknown Executive: Thanks, George.
America improvement in the early symptom score in an exploratory analysis, we recorded three 1% increase from baseline in body weight for age percentile for the higher dose group compared to <unk>, 3% in placebo. These data will be discussed with the regulatory authorities starting with the FDA later this year.
Unknown Executive: Last question, please.
Regarding approvals for new indications expected in the near future for Prurigo Natural Arris, we received a <unk> action date from the FDA of September 30.
Unknown Executive: And your last question comes from the line of Carter Gould.
The European Commission decision expected in the first half of 2023, well also in the first half of next year. We're also looking forward to the readout of the first to pick some study in chronic obstructive pulmonary disease or COPD.
Unknown Executive: Your line is now open.
Unknown Executive: Hi, sorry.
Moving on to look tile and oncology.
As Len mentioned, we are excited to have acquired Santa fees taken little tier, thereby gaining exclusive worldwide rights to a PD one inhibitor, we view as foundational for our oncology franchise, which has the potential to be utilized in numerous combinations with other candidates in our pipeline such as our co stimulatory bi specifics are.
Unknown Executive: Thanks.
Unknown Executive: Good morning.
Unknown Executive: Thanks for taking the question.
<unk> three bite specifics and novel checkpoint inhibitors, such as piano man.
Regarding such combinations I'd like to provide a brief update on our first clinical data from our co stimulatory pipeline involving re Gen 5678, RP SMA by CD 20, co stimulatory Bispecific in combination with wood tile.
Unknown Executive: Thanks for squeezing us in.
This combination is being studied in patients with advanced metastatic castrate resistant prostate cancer, who have previously progressed on multiple anti androgen therapies. These patients. Unfortunately have a poor prognosis with approximately one to two years of life expectancy and with limited treatment options.
Unknown Executive: I guess now that you fully own sort of Liptayo, can you update us on kind of where you stand on a subcutaneous formulation, given what we've seen data from some of your competitors there and the importance of that to kind of keep pace?
Metastatic SaaS.
Castrate resistant prostate cancer is considered an immunologically cold tumor and is largely resistance to immune checkpoint inhibitor with large trials of PD, one antibodies showing monotherapy response rates in the single digits.
Unknown Executive: And I guess, you know, looking down the road, then can you talk about the feasibility of potentially co-formulating Liptayo with one of these bi-specifics, excuse me, co-stimulatories, and if that's, you know, even feasibly possible, recognizing it's a ways away.
Unknown Executive: Thank you.
As just announced today by Merck.
Unknown Executive: It's only useful if you're going to try to have a single regimen that covers both.
Sounds of metastatic castrate resistant prostate cancer in terms of the lack of efficacy for checkpoint inhibitors used in standard ways is emphasized by the failure of their large phase III trial in an earlier stage of this disease.
Our coastal program was designed to innovative Lee enhance responsiveness in these types of cold tumor classes, such as prostate cancer and essentially turn these cold tumors into hot tumors I remind you of the extensive preclinical data we have published supporting this hypothesis.
2019, we have been in careful dose escalation for this prostate cancer program in close collaboration with the FDA.
In our study patients are dosed weekly with re Gen 5678, and every three weeks with lip tile. However, first dose of the tie was not code I'm staring until week for permitting a period of PSA by CD 28, leading to evaluate monotherapy safety and efficacy.
Earlier today, we announced the first clinical data from 33 patients across eight dose levels, which showed dose dependent anti tumor activity.
The key efficacy endpoint in the study is objective response rate defined as a greater than 50% decline of prostate specific antigen or PSA from baseline Andrew or tumor shrinkage.
<unk> is a protein produced by the prostate gland and by prostate tumors and it's commonly used as a biomarker to diagnose and bulk prostate cancer.
As many.
Metastatic castration resistant prostate cancer patients have disease limited to bone lesions and cannot be assessed by conventional resist criteria.
Preliminary data from the ongoing dose escalation portion of the trial across eight dose level cohorts in a total of 33 patients showed dose dependent anti tumor activity as assessed by Psa values.
At the five lowest dose levels, which are preclinical models predicted might be sub therapeutic there was almost no evidence of any anti tumor activity.
With only.
One of 17 patients showing a decrease in PSA there were no greater than grade three greater or equal to grade three immune related adverse events or aes at these doses the lack of anti tumor activity. Among these patients was consistent with the approximate 6% response rate reported in other trials with anti.
PD one monotherapy.
At the next three dose levels, we began to see clear evidence of dose dependent anti tumor activity, which was generally seen within six weeks of starting the combination treatment.
A dose level six one in four patients experienced a 100% decrease in PSA and a complete response in target lesions based on resist criteria the patient discontinued therapy due to a grade three immune related adverse event of the skin.
That was considered to be a recurrence of a preexisting condition.
And has since resolved with treatment per investigator report.
Despite.
Termination of the treatment. He has maintained his 100% decrease in PSA and complete response in target lesions for approximately 10 months to date per investigator report.
We continued to see anti tumor activity at the next dose level or dose level seven and in our Ace and most recent dose level three out of four patients had dramatic and rapid Psa reductions to with greater than 99% reductions and one was an 82% reduction.
Of the two patients with greater than 99% PSA reductions one experienced a grade three case of Mucositis, which has resolved and the other experienced a grade three case of acute inflammatory demyelinating poliwrath jalopy, which is ongoing.
In terms of safety very importantly, no grade three or higher IR aes were observed in patients without anti tumor activity and the occurrence of IR aes was correlated with anti tumor activity.
This is consistent with previous trials with anti PD, one immunotherapy, where an IR aes had been reported to occur at a higher rate in responding patients no grade four I, our aes were greater than or equal to great to cytokine release syndrome have been observed in the trial to date. There was one death that was considered unrelated to treatment.
In this trial I, our aes are being treated according to standard management practices used for checkpoint inhibitors.
We are planning on sharing more detailed data from this study at an upcoming medical meeting.
Let me remind you that through extensive preclinical research we had hypothesized that augmenting T cell co stimulation alongside PD inhibition could be a key to turning immunologically cold tumors Hot these preliminary data for our P. CMA by 328 <unk> by specific provides the first.
Clinical evidence supporting the promise of our broader pipeline of coast inventory biospecifics in diverse solid tumors as well as hematologic malignancies.
By combining these co stimulatory, bispecific, who bow tie up well with our CD three bi specifics.
We have the opportunity to create novel therapeutic synergies to address some of the most difficult to treat cancers.
We look forward to partnering with uncle oncology community on this ambitious and potentially groundbreaking efforts.
George Yancopoulos: We will also report initial data for our MET-by-MET bispecific in advanced MET-altered non-small cell lung cancer as well for Leptile monotherapy in neoadjuvant cutaneous squamous cell carcinoma.
In addition to these exciting early data we anticipate several important oncology milestones in the second half of the year.
George Yancopoulos: Moving on to our hematology pipeline, Ogenectinamab has the potential to be the first C20 by C3, bispecific to be approved for both major types of advanced B-cell lymphoma, that is, both follicular lymphoma and diffuse large B-cell lymphoma. Based on interim data from a cohort of patients, those with a recently modified step-up regimen, we believe Ogenectinamab may have the lowest rates of grade 3 or higher cytokine release syndrome for this class of bispecifics in follicular lymphoma and diffuse large B-cell lymphoma, while still maintaining the efficacy profile previously reported.
At the upcoming ESMO conference, we will provide updates on piano man or lag three antibody in combination with <unk> in a phase II cohort in metastatic melanoma that will hopefully confirm the encouraging combined efficacy that we previously reported in this setting. In addition, we will present initial data for Uber Madam App.
Our MX <unk> by <unk> Bispecific in metastatic ovarian cancer, where I'd like to remind you that we are also combination studies ongoing with both co stimulatory Bispecific and look Tayo. We will also report initial data for a met by <unk> Bispecific and advanced met altered non small cell lung cancer as well for la <unk>.
George Yancopoulos: We look forward to presenting these updated data and potentially submitting a BLA for, both indications in the second half of this year, pending feedback from the FDA.
Monotherapy and neo adjuvant cutaneous squamous cell carcinoma.
Moving onto our hematology pipeline <unk> has the potential to be the first <unk> <unk> by <unk> bispecific to be approved for both major types of advanced B cell lymphomas that is both follicular lymphoma, and diffuse large b cell lymphoma.
George Yancopoulos: We also plan to share updated data for a BCMA by C3 bispecific study in relapse or, refractory multiple myeloma by the end of the year.
George Yancopoulos: Pending regulatory feedback, we are planning to submit for regulatory approval in 2023.
Based on interim data from a cohort of patients.
George Yancopoulos: An umbrella study in multiple myeloma investigating BCMA by C3 in combination with various standard, of care products and investigational candidates is now open to enrollment, while we plan to initiate an additional study in earlier lines of multiple myeloma later this year.
With our recently modified step up regimen, we believe <unk> may have the lowest rates of grade three or higher cytokine release syndrome for this classified specifics in follicular lymphoma, and diffuse large b cell lymphoma, while still maintaining the efficacy profile previously reported.
George Yancopoulos: As you can see, the pace of innovation in our oncology pipeline has been accelerating, building upon Leptio as a foundation, with data readouts for novel mechanisms for cancer indications that historically have not responded to immunotherapy, including with our Regeneron Genetics medicines, where we and collaborators continue to progress our pipeline and discovery, Our siRNA collaboration with El Nino, a non-alcoholic steatohepatitis, or NASH, contains product candidates addressing various targets, including those discovered by the Regeneron Genetics, Center.
We look forward to presenting these updated data and potentially submitting a BLA for both indications in the second half of this year pending feedback from the FDA.
We also plan to share updated data for our <unk> by <unk> Bispecific study in relapsed or refractory multiple myeloma by the end of the year.
Pending regulatory feedback we are planning to submit for regulatory approval in 2023.
And umbrella study in multiple myeloma investigating do see made by two three in combination with various standard of care products and investigational candidate is now open to enrollment while we plan to initiate an additional study in earlier lines of multiple myeloma later this year.
George Yancopoulos: First data in NASH for ALN-HSG are anticipated this fall. We are progressing a second target, PNPLA-3, into the clinic later this year, and we have, recently identified an additional novel promising target for NASH, Side B.
As you can see the pace of innovation in our oncology pipeline has been accelerated building upon that Tayo as a foundation with data Readouts for novel mechanisms for cancer indications that historically have not responded to immunotherapy.
George Yancopoulos: As we just published in the New England Journal of Medicine, we found unprecedented association of very rare, Side B loss-of-function variants with lower risk of liver disease. In the largest association study examined, Protection from Liver Disease Ever Described, individuals with loss-of-function Side B variants had about 53% lower risk of developing non-alcoholic fatty liver disease and about 54% lower risk of developing non-alcoholic cirrhosis.
Concluding with our Regeneron genetics medicines, where we and collaborators continue to progress our pipeline and discovery engine.
Our <unk> collaboration with on the island are nonalcoholic, <unk> hepatitis or Nash contains product candidates addressing various targets, including those discovered by the Regeneron genetic center.
George Yancopoulos: Regeneron and El Nino are developing siRNA therapeutic candidate leads to advance to, the clinic.
First data in Nash.
For <unk> our anticipated. This fall we are progressing our second target P. MPLA three into the clinic later this year and we have recently identified an additional novel promising target for Nash <unk>.
Unknown Executive: And with that, I will turn the call over to Marianne.
Unknown Executive: I'm sorry, Tyler.
Unknown Executive: So we're a long way from worrying about that.
Unknown Executive: We're far more focused on the fact that we've turned cold to hot, which is a big damn deal, at least in our eyes.
Unknown Executive: Thank you, George.
Len Schleifer: In addition to exceptional commercial execution, we made significant pipeline progress with three regulatory approvals, two accepted regulatory filings, and one positive Phase III readout.
Unknown Executive: Regeneron's commercial business achieved another strong quarter, demonstrating durable growth across our brands.
Len Schleifer: We also completed the acquisition of Checkmate Pharmaceuticals and the third quarter purchase of worldwide rights to LibTile from Sanofi, both of which we believe will strengthen our oncology franchise in the near, medium, and long term.
Unknown Executive: We're building on the momentum of inline brands, including Alia, Dupixen, and Leptio, and also accelerating the potential across our portfolio for new and anticipated future launches.
Len Schleifer: We also reported today preliminary but promising antitumor activity and safety data for Regen5678, our PSMA by CD28 co-stimulatory bispecific in combination with LibTile in patients with advanced metastatic castrate-resistant prostate cancer.
As we've just published in the New England Journal Medicine, We found unprecedented association a very rare side the loss of function variance with lower risk of liver disease in the largest association study examined protection from liver disease ever described individuals with loss of function <unk>.
Len Schleifer: George will have more to say on this shortly, but we believe this represents an important step towards validating our co-stimulatory approach to fighting cancer and potentially advancing the science of immuno-oncology.
Unknown Executive: Let me start with Alia.
Unknown Executive: Bella, can we go to the next question?
Len Schleifer: Turning to our commercial performance, in the second quarter, ILEA global net sales grew 13% at constant exchange rates to $2.5 billion.
Unknown Executive: Second quarter global net sales grew 13% year-over-year at constant currency to $2.5 billion.
Len Schleifer: In the U.S., ILEA net sales were $1.6 billion, up 14% year-over-year, an outperforming anti-VEGF category growth of approximately 8%, and others.
Unknown Executive: In the U.S., Alia net sales exceeded $1.6 billion, a 14% year-over-year increase driven, by prescribing demand, with strong demand continuing into the third quarter.
At about 53% lower risk of developing non alcoholic fatty liver disease, and about 54% lower risk of developing non alcoholic cirrhosis regeneron and on myeloma are developing.
As I RNA therapeutic candidate leads to advance to the clinic.
Len Schleifer: Despite new competition, Aliyah's share was approximately half of the anti-VEGF category, and 75% among branded agents, affirming its status as the gold standard anti-VEGF therapy.
Unknown Executive: Alia year-over-year growth significantly outpaced the category, gaining competitive, share and further enhancing Alia's position as the anti-VEGF agent of choice for retinal disease.
And with that I will turn the call over to Maryann. Thank you George we general commercial business achieved another strong quarter, demonstrating durable growth across our brands.
Unknown Executive: We continue to see durable growth based on patient flow and new patient starts. Ongoing demographic trends such as the aging population and prevalence of diabetes support, anticipated mid-to-high single-digit category growth for the foreseeable future.
<unk> on the momentum of inline brands, including Eylea depicts an inlet pile and also accelerating the potential across our portfolio from new and anticipated future launches, let me start with EMEA second quarter Global net sales grew 13% year over year at constant currency, so $2 5 billion and the.
Unknown Executive: In diabetic eye disease, increasing diagnosis rates are also driving strong growth for Alia. With more than 55 million injections worldwide since launch and well over 1 million injections, in the U.S. alone in the second quarter of 2022, physicians continue to recognize and prefer Alia's differentiated efficacy and safety profile.
S. Eylea net sales exceeded $1 6 billion, a 14% year over year increase driven by prescribing demand with strong demand continuing into the third quarter eylea year over year growth significantly outpaced the category gaining competitive share and further enhancing <unk> position.
Unknown Executive: We are confident in our ability to continue to build on our leadership over the long term.
Unknown Executive: Pending FDA approvals, there are potential incremental opportunities for ALEA, including, extending the dosing interval up to 16 weeks for diabetic retinopathy and treating preterm infants suffering from retinopathy of prematurity.
As the anti VEGF agent of choice for retinal disease, we continue to see durable growth based on patient flow and new patient starts ongoing demographic trends such as the aging population and prevalence of diabetes support anticipated mid to high single digit category growth for the foreseeable future and die.
Len Schleifer: We believe a Flibercept represents a significant potential growth opportunity going forward, given favorable demographic trends as well as the potential for a Flibercept 8 mg to augment the category and complement our retinal franchise. Regarding our investigational Flibercept 8 mg, the goal of our clinical program is to, evaluate whether visual acuity among wet AMD and DME patients can be maintained or improved compared to Aliyah while extending the interval between doses.
Unknown Executive: In addition, our Flibersep 8mg investigational program has garnered significant enthusiasm, from the retinal community and has the potential to significantly enhance the anti-VEGF treatment paradigm.
Len Schleifer: Equally important is maintaining the high bar for safety that has been set by Aliyah, over the past 10 years, 55 million injections worldwide and 8 million patient years of experience.
But guy disease, increasing diagnosis rates are also driving strong growth for eylea with more than 55 million injections worldwide since launch and well over 1 million injections in the U S alone in the second quarter of 2022.
Unknown Executive: Turning now to Liptio, global net sales in the second quarter grew 25%, a constant currency, to $141 million, with U.S. net sales of $91 million.
<unk> continued to recognizing prefer a less differentiated efficacy and safety profile. We are confident in our ability to continue to build on our leadership over the long term.
Unknown Executive: Liptio continues to grow across all approved indications, including non-melanoma skin, cancers, where Liptio is the leading immunotherapy treatment.
Unknown Executive: In monotherapy, non-small cell lung cancer, we are generating increased utilization across, a broader number of prescribers. We are launch-ready for the potential chemotherapy combination approval, which will significantly, expand the patient opportunity and physician choice for Liptio in treating lung cancer.
Pending FDA approvals, there are potential incremental opportunities for eylea, including extending the dosing interval up to 16 weeks for diabetic retinopathy and treating preterm infants suffering from retinopathy of Prematurity. In addition, our flourished eight milligram investigational program has garnered significant enthusiasm.
Len Schleifer: We anticipate pivotal results in late quarter 3 or early quarter 4 and with supportive data, a BLA submission completed by early 2023.
Unknown Executive: Regeneron's full ownership of Liptio presents many exciting opportunities across our current, and future oncology portfolio.
Unknown Executive: And obviously it hasn't escaped yours or I'm sure anybody's attention that now with this just appreciated new data where it looks like we're on the way of turning cold tumors to hot in combination with Liptayo, we are, in retrospect, very happy that we now have taken on sole ownership of Liptayo.
From the retinal community and has the potential to significantly enhance the anti VEGF treatment paradigm.
Unknown Executive: Key thought leaders recognize our growing commitment to oncology and have high interest, in the potential for Liptio combinations to meaningfully advance the standard of care in many cancer indications.
Turning now to live Tayo global net sales in the second quarter grew 25% at constant currency to $141 million with U S. Net sales of $91 million leaped higher continues to grow across all approved indications, including non melanoma skin cancers, where <unk> is the leading immunotherapy treatment and man.
Unknown Executive: We are taking a measured approach to expanding our global commercial footprint in key international, markets to maximize the impact of our innovations to patients and Regeneron. These capabilities and infrastructure will support Liptio and, over time, future medicines.
<unk> non small cell lung cancer, we are generating increased utilization across a broader number of prescribers. We are launch ready for the potential chemotherapy combination approval, which will significantly expand the patient opportunity and physician choice for lip tayo in treating lung cancer.
Len Schleifer: Dupixent continued to grow at a remarkable pace after 5 years and more than 450,000 patients, treated since launch. In quarter 2, global net product sales were $2.1 billion, an increase of 43% at constant, exchange rates compared to last year, reflecting Dupixent's differentiated clinical profile and ability to effectively treat more and more patients with the type 2 inflammatory diseases where Dupixent is approved.
Unknown Executive: And now turning to Dupixent, in the second quarter, global Dupixent net sales grew 43% year-over-year, a constant currency to $2.1 billion. Dupixent's performance was fueled by strong uptake across all indications, with recent, launches performing well across new diseases, age groups, and geographies. In the U.S., Dupixent net sales grew 38% to $1.58 billion.
Unknown Executive: Thanks, Len and George.
Len Schleifer: In the U.S., we saw growth across all indications, including initial contributions from atopic, dermatitis in patients as young as 6 months to 5 years of age and from eosinophilic esophagitis, both of which are indications approved by the FDA during the second quarter and represent the first approved systemic treatment options for these patients.
General full ownership of lip Tayo presents many exciting opportunities across our current and future oncology portfolio key thought leaders recognize our growing commitment to oncology and have high interest in the potential for lip tayo combinations to meaningfully advance the standard of care in many cancer indications, we are taking a measured approach to it.
Unknown Executive: We continue to expand Dupixent's leadership position as the first-line systemic treatment, in atopic dermatitis. There's robust demand for Dupixent across the spectrum of moderate and severe disease, as well as across age groups. With the recent approval in children as young as six months, Dupixent is the first and only, biologic medicine approved to treat moderate to severe atopic dermatitis from infancy through adulthood. And the launch in our youngest patients is off to a very strong start based on initiations.
Our global commercial footprint in key international markets to maximize the impact of our innovations to patients and regeneron is capabilities and infrastructure will support the pile and over time future medicines and now turning to the <unk> in the second quarter Global depicts it net sales grew 43% year.
Every year at constant currency to $2 1 billion to <unk> performance was fueled by strong uptake across all indications with recent launches performing well across many diseases age groups and geographies in the U S. It takes as net sales grew 38% to $1 five 8 billion, we continue to it.
Len Schleifer: We hope to add a third first-in-class indication for Dupixent later this year in patients with, prurigo nodularis, which is currently under priority review with the FDA.
Unknown Executive: We are also preparing for the potential approval next month in Paragonodularis, a dermatologic, condition where approximately 75,000 U.S. patients have no FDA-approved medicines and are most in need.
Len Schleifer: In oncology, Liptio net product sales grew 25% globally at a constant currency to $141, million in the second quarter of 2022, including 17% growth in the U.S., driven by non-melanoma skin cancer indications and monotherapy non-small cell lung cancer.
Len Schleifer: We have long believed that the key to fully unlocking the opportunity in oncology is through, differentiated combinations, with Liptio possibly serving as our foundation for many of them. That belief was the basis for our acquisition of the global rights to Liptio. We plan to invest further in Liptio-based combinations, pairing it with promising candidates, in our oncology pipeline, such as LAG-3 antibody, Threoninamab, and our many investigational bi-specifics, as well as with candidates from external collaborations.
Unknown Executive: In asthma, Dupixent is the number one biologic prescribed by both allergists and pulmonologists.
<unk> leadership position as the first line systemic treatment in atopic dermatitis, there's robust demand for <unk> across the spectrum of moderate and severe disease as well as across age groups with the recent approval in children as young as six months. It takes it is the first and only biologic medicine approved to treat moderate.
Len Schleifer: We continue to make progress with these lip-tile combinations and intend to share initial data, in the second half of this year from our emerging oncology pipeline, which George will discuss in more detail.
Unknown Executive: We continue to see strong growth in new patient starts and total prescriptions driven by Dupixent's, differentiated profile, unique mechanism of action, ease of prescribing, broad label, and demonstrated efficacy and safety.
Len Schleifer: Regarding the FDA's review of our Lip-Tile Chemo Combo Supplemental BLA for the treatment, of non-small cell lung cancer, we are pleased with the progress that we have made as the, FDA continues its review. However, we recently were informed that an FDA travel complication relating to scheduling, a routine clinical trial site inspection in Eastern Europe will likely delay their decision until after our September 19th PDUFA date.
Len Schleifer: While any delay is disappointing, a new site inspection date has been scheduled.
Len Schleifer: Therefore, we do not expect a lengthy extension of the review period, and we do not expect, it to meaningfully impact our launch plans, assuming FDA approval. We continue to actively work with the FDA, believing the ongoing review is otherwise, progressing well and all other elements of the review remain on track.
Len Schleifer: Regarding our COVID-19 response, Regeneron remains committed to combating the virus by, developing additional novel antibodies. We continue to work with the FDA to establish a regulatory pathway for these antibodies, which could potentially serve an important role in protecting immunocompromised individuals who do not respond adequately to COVID-19 vaccines, as well as treating infected patients for whom oral antiviral therapy is not appropriate.
Len Schleifer: In closing, as I reflect on our performance during the first half of the year, I am very, proud of our numerous achievements, which were only made possible by the dedicated Regeneron employees around the world.
Len Schleifer: We are excited about the increasing commercial momentum for our core products and the important, progress we have made in advancing our pipeline.
Len Schleifer: Together, we have continued to serve patients in need while strengthening the foundation, of the company and leveraging our financial strength to better position Regeneron to achieve sustainable growth over time.
Len Schleifer: Our strategy continues to focus on investing in our internal R&D capabilities while exploring, potential collaborations that will enable us to fully realize the power of our science.
Len Schleifer: We remain confident in the strategy and in our growth prospects, as well as in our ability, to deliver breakthroughs to patients and value to shareholders.
Unknown Executive: In nasal polyps, robust demand continues with Dupixent capturing the majority of market, share and increased prescribing from ENTs.
Severe atopic dermatitis from infancy through adulthood, and a launch in our youngest patients is off to a very strong start based on initiations. We are also preparing.
Unknown Executive: In ischemic esophagitis, our first gastroenterology indication, Dupixent is the only approved, medicine for adults and children age 12 and above.
For the potential approval next month, and probably not Dolores a dermatologic condition, where approximately 75000 U S patients have no FDA approved medicines.
Unknown Executive: Early launch indicators have been favorable with encouraging adoption from both allergists, and gastroenterologists. In addition, we are expanding our outreach to educate patients and caregivers about Dupixent, as a new therapeutic option that provides meaningful symptom relief.
<unk> are most in need and asthma depicts is the number one biologic prescribed by both allergists and Pulmonologists. We continued to see strong growth in new patient starts and total prescriptions driven by <unk> differentiated profile unique mechanism of action ease of prescribing broad label and demonstrated efficacy and safety.
Unknown Executive: Turning now to Dupixent in markets outside the U.S., in the second quarter, net sales grew 61% on a constant currency basis to $510 million, driven by robust growth across all indications. Regeneron continues to expand our presence in key international markets to bring Dupixent to patients.
In nasal polyps robust demand continues with depicts and capturing majority of market share and increased prescribing from <unk> and Michelle <unk>. Our first gastroenterology indications depicts it is the only prove medicine for adults and children age 12 and above early launch indicators have been favorable.
Unknown Executive: In summary, Dupixent is transforming the type 2 inflammatory disease landscape and has significant growth potential ahead driven by further penetration in existing indications, as well as from potential future indications.
With encouraging adoption from both Allergists and Gastroenterologists. In addition, we are expanding our outreach to educate patients and caregivers about depicts it as a new therapeutic option that provides meaningful symptom relief.
Unknown Executive: In conclusion, our commercial execution delivered solid results for the second quarter, bringing our life-changing medicines to even more patients, our inline brands continue to perform well, and new launches provide additional opportunities for sustainable long-term growth.
Unknown Executive: We'll deal with that privately, Tyler.
Turning now to pick sent in markets outside the U S. In the second quarter net sales grew 61% on a constant currency basis to $510 million driven by robust growth across all indications in general continues to expand our presence in key international markets to bring depiction.
Unknown Executive: Now, I will turn the call over to George.
Unknown Executive: Now I'll turn the call to Bob.
Unknown Executive: Sorry.
Unknown Executive: I think that's all we have time for today.
Unknown Executive: Thank you, Marion.
Unknown Executive: Sure.
Unknown Executive: Bella, could you please conclude the call?
George Yancopoulos: Thanks, Len.
Unknown Executive: My comments today on Regeneron's financial results and outlook will be on a non-GAAP basis, unless otherwise noted.
Unknown Executive: And your next question comes from the line of Salveen Richter from Goldman Sachs.
Unknown Executive: Thank you.
Unknown Executive: Regeneron's outstanding performance continued in the second quarter as our core business maintained a strong growth trajectory and we have leveraged our strong financial position to complete two business development oncology transactions. Excluding global revenues related to the COVID-19 antibody cocktail, second quarter total revenues increased 20% year-over-year to $2.9 billion, demonstrating continued momentum across our business.
Unknown Executive: Your line is open.
Unknown Executive: This concludes today's conference call.
Patients in summary, it kicks in is transforming the type two inflammatory disease landscape and has significant growth potential ahead, driven by further penetration in existing indications as well as from potential future indications in conclusion, our commercial execution delivered solid results for the second quarter, bringing.
Unknown Executive: Thank you for your participation.
Our life changing medicines to even more patients are inline brands continued to perform well and new launches provide additional opportunities for sustainable long term growth now I'll turn the call to Bob Thank.
Unknown Executive: Second quarter total diluted net income per share was $9.77 on net income of $1.1 billion.
Unknown Executive: Beginning with collaboration revenue and starting with Bayer, second quarter 2022 ex-US ILEA net product sales were $870 million, up 13% on a constant currency basis, versus second quarter 2021. Total Bayer collaboration revenue was $358 million, of which $340 million related to our share of ILEA net profits outside the U.S.
Thank you Marion My comments today on Regeneron <unk> financial results and outlook will be on a non-GAAP basis.
Less otherwise noted were general <unk> outstanding performance continued in the second quarter as our core business maintained its strong growth trajectory and we have leveraged our strong financial position to complete two business development oncology transactions.
Unknown Executive: Total Sanofi collaboration revenue was $678 million in the second quarter of 2022, improved 55% from the prior year driven by Dupixent.
Excluding global global revenues related to the COVID-19 antibody cocktail second quarter total revenues increased 20% year over year to $2 9 billion demonstrating continued momentum across our business.
Unknown Executive: Finally, we recorded Roche collaboration revenue of $8 million related to Roche's sales of Ronapreave outside the U.S. We expect to record additional revenue from this collaboration in the fourth quarter of 2022.
Second quarter total diluted net income per share was $9 77 on net income of $1 1 billion.
Beginning with collaboration revenue and starting with Bayer second quarter, 2022 X U S. Eylea net product sales were $870 million up 13% on a constant currency basis versus second quarter 2021, total Bayer collaboration revenue was $358 million of which $340 million related to our share.
Unknown Executive: Moving now to our operating expenses, R&D increased 7% year-over-year to $690 million, driven by higher headcount in cost to support our expanding pipeline, partially offset by lower development costs for Virgin Cove.
Unknown Executive: In the second quarter of 2022, acquired IPR&D was $197 million, which includes a previously disclosed $195 million charge related to our acquisition of Checkmate Pharmaceuticals.
<unk> net profits outside the U S. Total scientific collaboration revenue was $678 million in the second quarter of 2022 in grew 55% from the prior year driven by depiction.
Unknown Executive: SG&A expense increased 14% year-over-year to $418 million, primarily due to costs related to growth initiatives for ILEA and higher headcount to support our growing organization.
Finally, we recorded Roche collaboration revenue of $8 million related to Roche, whose sales have grown approved outside the U S. We expect to record additional revenue from this collaboration in the fourth quarter of 2022.
Unknown Executive: Cost of goods sold decreased 73% year-over-year to $137 million, primarily due to sales of Virgin Cove in the prior year that did not reoccur.
Moving now to our operating expenses R&D increased 7% year over year to $690 million driven by higher head count and cost to support our expanding pipeline, partially offset by lower development costs for good Jen Cove in the second quarter of 2022 acquired IP R&D was 197.
Unknown Executive: Finally, the second quarter of 2022 effective tax rate was 13.6%, compared to 17% in the prior year. The lower rate is partially related to the non-recurrence of Virgin Cove sales.
Which includes a previously disclosed $195 million charge related to our acquisition of Checkmate pharmaceuticals.
Unknown Executive: Shifting now to cash flow in the balance sheet.
Unknown Executive: Year-to-date in 2022, Regeneron has generated, $2.4 billion in free cash flow and ended the second quarter of 2022 with cash and marketable securities, less debt of $11.3 billion.
SG&A expense increased 14% year over year to $418 million, primarily due to costs related to growth initiatives for eylea and higher head count to support our growing organization.
Unknown Executive: We continue to deliver on our capital allocation priorities, completing our acquisition of Checkmate Pharmaceuticals, the first acquisition in Regeneron's history, and the purchase of Sanofi Steak and Liptio. In addition, we repurchased approximately $400 million of our shares in the second quarter of 2022, bringing our year-to-date total through July to over $1.1 billion.
Cost of goods sold decreased 73% year over year to $137 million, primarily due to sales of Virgin cold in the prior year that did not reoccur.
The second quarter 2022, effective tax rate was 13, 6% compared to 17% in the prior year. The lower rate is partially related to the non recurrence of Virgin pulp sales.
Unknown Executive: We continue to be opportunistic buyers where we see dislocation between our stock price and our intrinsic valuation.
Shifting now to cash flow in the balance sheet.
Unknown Executive: I will now discuss updates to our full year 2022 guidance driven by the closing of the, Liptio transaction. We are updating full year R&D expense guidance to be in the range of $3.1 billion to $3.24 billion, an increase of $170 million at the midpoint from our previous guidance. Approximately one-third of the increase is driven by Regeneron now recording all R&D expense for Liptio, which was previously shared with Sanofi.
Year to date in 2020 to Regeneron has generated $2 4 billion in free cash flow and ended the second quarter of 2022 with cash and marketable securities less debt of $11 3 billion.
Unknown Executive: The remaining two-thirds reflects the recording of our full 50 percent share of antibody collaboration spend as incurred, beginning in the third quarter of 2022. Previously, our share of antibody collaboration expenses was only partially expensed in the period incurred, with the remaining share added to the antibody collaboration development balance.
We continue to deliver on our capital allocation priorities completing our acquisition of Checkmate Pharmaceuticals. The first acquisition in Regeneron history, and the purchase of <unk> stake in lip Tayo. In addition, we repurchased approximately $400 million of our shares in the second quarter of 2022, bringing our year to date total through July .
Hi to over $1 1 billion, we continue to be opportunistic buyers, where we see dislocation between our stock price and our intrinsic valuation.
Unknown Executive: We are updating full year SG&A expense guidance to be in the range of $1.74 billion to $1.84 billion. The updated range reflects the inclusion of 100 percent of Liptio commercial expenses, which were previously shared with Sanofi, net of anticipated synergies.
I will now discuss updates to our full year 2022 guidance driven by the closing of the lip Tayo transaction.
We are updating full year R&D expense guidance to be in the range of $3 1 billion to $3 $2 4 billion, an increase of $170 million at the midpoint from our previous guidance.
Approximately one third of the increase is driven by Regeneron now recording all R&D expense for lip Tayo, which was previously shared with Santa Fe.
Unknown Executive: We are also updating full year gross margin guidance to be in the range of 92 to 93 percent. The more favorable gross margin is due to the removal of the payment of, Sanofi's share of U.S. Liptio gross margin that was previously recorded in this slide.
The remaining two thirds reflects the recording although a full 50% share of antibody collaboration spend as incurred beginning in the third quarter of 2022 previously our share of antibody collaboration expenses was only partially expense in the period incurred with the remaining share added to the antibody collaboration development balance.
Unknown Executive: A complete summary of our latest full year guidance is available in our press release, issued earlier this morning.
Unknown Executive: Let me conclude by highlighting four important financial modeling considerations related to the Liptio transaction. First, effective July 1, Regeneron will record 100 percent of the global Liptio net product sales. We previously recorded only U.S. Liptio, net product sales. Second, the Liptio upfront payment milestones and royalties will be recorded as an intangible asset on the balance sheet and amortized through cost of goods sold over the useful life of Liptio.
We are updating full year SG&A expense guidance to be in the range of 174 billion to $1. Eight 4 billion. The updated range reflects the inclusion of a 100% of lift higher commercial expenses, which were previously shared with Santa fee net of anticipated synergies.
We are also updating full year gross margin guidance to be in the range of 92% to 93%. The more favorable gross margin is due to the removal of the payment of <unk> share of U S law Tayo gross margin that was previously recorded in this line.
Unknown Executive: This amortization expense will be excluded from non-GAAP results.
Unknown Executive: Third, as you may recall, we will now pay 20 percent of our share of antibody profits to reduce the antibody development balance instead of the previous 10 percent arrangement. The quarterly development balance repayment going forward will be reflected in our P&L as incremental antibody R&D expense I mentioned earlier when discussing revised R&D guidance with the remainder coming, in the form of a reduction to antibody collaboration revenue. Therefore, the reduction to antibody collaboration revenue will be less than 20 percent of our share of antibody profit.
Complete summary of our latest latest full year guidance is available in our press release issued earlier this morning.
Let me conclude by highlighting the important financial modeling considerations related to the lip Tayo transaction first effective July one regeneron will record a 100% of the global lift titled net product sales. We previously recorded only U S look tayo net product sales.
Dilip Tayo upfront payments milestones and royalties will be recorded as an intangible asset on the balance sheet and amortized through cost of goods sold over the useful life of lip Tayo. This amortization expense will be excluded from non-GAAP results third as you may recall, we will now pay 20.
Unknown Executive: As a result of the Development Balance Repayment step-up, we expect to shorten the period to fully repay the development balance, resulting in an earlier and very significant inflection in collaboration profits in the outer years. Finally, in the third quarter of 2022, we will record a one-time Development Balance Repayment per the LIBTIO Transaction Agreement of approximately $55 million in addition to our regular quarterly repayments, which will be recorded as a deduction within the Antibody Collaboration Revenue Line.
Percent of our share of antibody profits to reducing antibody development balance instead of the previous 10% arrangement.
Quarterly development balanced repayment going forward will be reflected in our P&L as incremental antibody R&D expense I mentioned earlier when discussing revised R&D guidance with the remainder coming in the form of a reduction to antibody collaboration revenue.
George Yancopoulos: I will start with ophthalmology.
Unknown Executive: In conclusion, Regeneron is performing well and we continue to make investments in our business supported by our strong financial position to drive sustainable long-term growth.
Unknown Executive: Good morning.
Therefore, the reduction to antibody collaboration revenue will be less than 20% of our share of antibody profits.
George Yancopoulos: We are looking forward to the upcoming phase 3 readouts of a flip-recept 8 mg in patients, with diabetic macular edema and in wet age-related macular degeneration.
Unknown Executive: With that, I will pass the call back to Ryan.
Unknown Executive: Thank you for taking our question.
Unknown Executive: You may now disconnect.
George Yancopoulos: Photon in patients with DME and Pulsart in patients with wet AMD will test whether patients, treated with 8 mg dose every 12 weeks or every 16 weeks can achieve non-inferior, best-corrected visual acuity at week 48 compared to the currently approved dilea, 2 mg dose every 8 weeks.
As a result of the development balanced repayment step up we expect to shorten the period to fully repay the development balance resulting in an earlier in very significant inflection in collaboration profits in the outer years.
Unknown Executive: Thank you, Bob.
Unknown Executive: This is Salveen Richter from Goldman Sachs.
Unknown Executive: The conference will begin shortly.
We continue to make investments in our business supported by our strong financial position to drive sustainable long term growth with that I will pass the call back to Ryan.
Thank you Bob Bellow that concludes our prepared remarks, we'd now like to open the call for Q&A.
With several callers in the queue and to ensure we were able to address as many questions as possible. We will answer one question from each caller before moving to the next Bill. Please go ahead and poll for questions.
At this time to ask a question you will need to press star one on your telephone please standby, while we compile the Q&A roster.
Unknown Executive: To raise your hand during Q&A, you can dial star 11.
And our first question comes from the line of Mohit Bansal from Wells Fargo. Your line is now open.
Great. Thanks for taking my question and congrats on the quarter and data.
Maybe a question on high dose Eylea, DMD trial, especially with the loading dose sticking to that.
Back in the memory Lane it seems like the use of five loading doses only came along after the <unk> protocol T. Because I couldn't find anything which are there in the historic history would suggest that you should use file loading doses. So could you could you talk a little bit about that and also what is the realistic utility a fourth and fifth loading dose.
Unknown Executive: Bella, that concludes our prepared remarks.
Unknown Executive: We'd now like to open the call for Q&A.
Unknown Executive: With several callers in the queue and to ensure we are able to address as many questions as possible, we'll answer one question from each caller before moving to the next.
Even for standard dose eylea, especially in the context of one year long trial. Thank you.
Yeah, those are really interesting questions and they get into the details of very specific points of the regimen. Many of these as you point out have not been directly study in sort of head to head studies. So well we would have to you know maybe offline discuss some of these issues, but as.
I said details that would require a lot of experimentation may be answer.
Thanks, Darren spelled out when we go to the next question. Please.
<unk>.
Your next question comes from the line of Avon's Siegelman from BMO capital. Your line is now open.
Hey, guys. Thank you so much for taking my question I'd Love for you to expand on kind of some of the next steps for 5678, what do you want to see an additional cohort eight patients and even at potentially higher dose cohorts to move into a registration directed trial. Thank you.
Yeah no. Thanks, we are obviously very excited about these data that I have long been coming as you. All know we have to go through a very careful dose escalation starting with very low doses, but what we've now seen at.
The dose level six seven and eight.
Really.
Yeah.
<unk> been very exciting I think that what we're gonna be doing is we're gonna be continuing to expand the number of patients at these dose levels, we're going to continue to evaluate the tumor activity as well as the safety and we hope that we're going to see that the responses remain profound and durable.
<unk>.
While the safety hopefully most of them will resolve.
We managed well and.
We continue down that path, we will as you say also continue to explore other dose levels and so forth, but the level of tumor activity.
And balanced by.
The safety events that we're seeing there.
Doses are occurring now at levels, where we think that.
Unknown Executive: Bella, please go ahead and pull for questions.
And they could be providing.
New standard for benefit risk for this population I think that it's important to point out and remind everybody I mean, I said, it but just to say it again.
Iras were only seen in the patients who had profound anti tumor activity that is the patients who didn't benefit did not really indicate in terms of higher level iras to have.
<unk> safety concern and that is of course, what you want to see that the patients who have the benefit that the safety is limited to those who are not doing harm to the patients that youre not benefit.
Unknown Executive: All right.
Unknown Executive: At this time, to ask a question, you will need to press star 11 on your telephone.
Unknown Executive: Please stand by while we compile the Q&A roster.
George Yancopoulos: Unlike studies from other sponsors in which patients were assigned to a dosing interval, based on disease activity assessment
Unknown Executive: And our first question comes from the line of Mohit Bansal from Wells Fargo.
Okay, I guess, we're ready for next question.
Thanks, George Bella next question please.
George Yancopoulos: Following the loading phase, patients enrolled in the Photon and Pulsar studies were randomized at baseline into one of the three treatment groups, which we believe will allow us to determine whether extent dosing can truly be achieved.
Unknown Executive: Your line is now open.
Your next question comes from the line of Tyler Van Buren from Cowen. Your line is now open.
Yeah.
Yeah.
You must be on mute.
Okay.
We don't hear a question, but maybe we could take that up to kind of amplify even a little further and repeat what George said about the safety.
Hum.
Can you hear me sorry.
It's not ours.
Sure.
Good morning, Thanks, very much for taking the question.
I wanted to ask about.
Pulsar and photon just a follow up can you elaborate on the decision to randomize patients to the 12 week 16 week arms prior to assessing their response for loading doses.
Patients can only be rescued during that first year or move down a dosing interval.
Got to a less frequent regimen, even though they might be doing.
Well, let's make the comparison to the goodbyes mode Tonight Lucerne study, it's difficult given this how do you expect to communicate the data to the physicians.
See it.
Well, we have to admit we are somewhat confused by the whole of business data and its new and its intent because of the confusing study design. We are basically only after you see how well patients are doing do you then shift. So if you take your best patients and you shift them for example to <unk>.
Q2, I believe 2016 regimen, and we say all.
X percent of patients can stay on this regimen youre not really understanding how good your drug is and what percent of the patients can actually achieve that dosing regimen, we know and we've already published on this that patients who do well can be dramatically extended we're trying to answer a very different question, which we think is going to be very very <unk>.
George Yancopoulos: If the studies are positive and the high safety standard established with ILEA is maintained, we believe a Flivicep 8 mg would represent a significant clinical advance for patients and we would target a U.S. regulatory filing by early 2023.
George Yancopoulos: Moving to Dupixan, which continued to deliver notable milestones in the second quarter of the year. Dupixan was recently approved in children with atopic dermatitis as young as six months old, making Dupixan the first and only biologic medicine approved to treat atopic dermatitis from infancy through adulthood.
George Yancopoulos: Marion will talk more about this, as well as about our recent earlier than expected FDA approval for a brand new gastroenterology indication. Eosinophilic esophagitis, or EOE. Since receiving approval in adults and adolescents aged 12 and over, we have reported positive data in pediatric patients with EOE as young as one year of age. Our phase three study in children 1 to 11 years of age met the primary endpoint with 68% of patients on the higher Dupixan dose and 58% on the lower Dupixan dose, achieving histological disease remission compared to 3% of children on placebo at 16 weeks.
George Yancopoulos: EOE symptoms can be difficult to assess in these young patients. However, we also observed a numerical improvement in EOE symptom score.
George Yancopoulos: In an exploratory analysis, we recorded 3.1% increase from baseline in body weight for age percentile for the higher dose group compared to 0.3% on placebo. These data will be discussed with the regulatory authorities starting with the FDA later this year.
And to the community which is.
George Yancopoulos: Regarding approvals for new indications expected in the near future. For parigorinagularis, we received a FDUFA action date from the FDA of September 30th and the European Commission's decision expected in the first half of 2023.
Whether you can truly achieved extended dosing and whether you can prospectively put people into these dosing regimens and get substantial numbers of them to stare at these dosing regimen, because we're giving the higher dose of Eylea, which we believe has this ability to maintain more patients.
George Yancopoulos: Also in the first half of next year, we are also looking forward to the readout of the first Dupixan study in chronic obstructive pulmonary disease, or COPD.
George Yancopoulos: Moving on to leptio and oncology.
George Yancopoulos: As Len mentioned, we are excited to have acquired Sanofi Staken Leptio, thereby gaining exclusive worldwide rights to a PD-1 inhibitor review as foundational for our oncology franchise, which has the potential to be utilized in numerous combinations with other candidates in our pipeline, such as our co-stimulatory bispecifics, our CD3 bispecifics, and novel checkpoint inhibitors such as phenylmeth.
George Yancopoulos: Regarding such combinations, I'd like to provide a brief update on our first clinical data from our co-stimulatory pipeline involving Regen5678, our PSMA by CD20 co-stimulatory bispecific, in combination with Leptio. This combination is being studied in patients with advanced metastatic castrate-resistant prostate cancer, who have previously progressed on multiple antiandrogen therapies.
George Yancopoulos: These patients, unfortunately, have a poor prognosis with approximately one to two years of life expectancy and with limited treatment options.
Unknown Executive: Can you walk us through how to think about implications from the potential Medicare negotiation, provision to high-dose cilia, given that there is no distinct IP there, but there will be a biosimilar for the regular dose by mid-24?
At at these are longer intervals. So we really believe that this would represent a significant clinical advance and we're also clarify how to use these drugs as opposed to the prior <unk>.
Unknown Executive: Thanks so much.
Unknown Executive: It's a complicated question that until we see the final language in the statute, how, it's interpreted and how it's actually implemented, as to whether and how we file for the high-dose, whether or not there'll be separate considerations for high-dose versus the standard-dose cilia.
Confusing approaches.
Thanks, Joe that's helpful.
A brief follow up in year two.
Unable to be.
Yes.
Well Im sorry, Tyler.
Hello can we go to the next question will deal with that privately Tyler sorry.
Sure.
And.
Your next question comes from the line of.
Unknown Executive: If it turns out that we get a separate BLA, obviously you get, I can't remember what the, statute says now, 11 or 12 years before this comes into play.
Celgene richer from Goldman Sachs. Your line is open.
Good morning. Thank you for taking our question. This is andrea on for solving.
Can you walk us through how to think about implications from the potential Medicare negotiating provisioned hydro cilia.
Given that there is no distinct IP, there, but there will be a biosimilar for the regular dose by mid 'twenty four thanks, so much.
Unknown Executive: And based on our current understanding of the bill, we believe that a new BLA would, constitute a new biologic product, and therefore the 8 milligrams would not be subject to price negotiation for those 11 years.
Yes, its a complicated it's a complicated question.
On that until we see the final language.
Unknown Executive: But we have to see what the final bill looks like and how it's interpreted.
And the statute how its interpreted in how it's actually implemented as to whether and how we file for the high dose whether or not.
Unknown Executive: So we're as anxious to see some of that as you are, Toby, and so we will keep you informed, of our thinking as the bill is finalized and starting to be interpreted.
There'll be separate considerations for high dose.
<unk> versus the <unk>.
Standard dose Eylea. If there is if it turns out that there are set if it turns out that there are separate.
Unknown Executive: Thanks, Len.
Unknown Executive: Bella, next question, please.
Unknown Executive: Yes.
Unknown Executive: Your next question comes from the line of Matthew Harrison from Morgan Stanley.
Get a separate BLA, obviously, you get I can't remember what the statute says now 11 or 12 years before this comes into play and based on our current understanding of the Bill we believe that our new BLA would constitute a new biologic product and therefore, the eight milligrams would not be subject to price negotiation for those 11 years.
Unknown Executive: Your line is now open.
Unknown Executive: Great.
Unknown Executive: Great.
Unknown Executive: Thanks for taking my question and congrats on the quarter and data.
Unknown Executive: Good morning.
Unknown Executive: Maybe a question on high-dose ILA-DME trials, especially with the loading dose, sticking to that.
Unknown Executive: Thanks for taking the question.
Unknown Executive: So if you go back in the memory lane, it seems like the use of five loading doses only came along after the DRCR protocology because I couldn't find anything in the history which suggests that you should use five loading doses.
Unknown Executive: So could you talk a little bit about that?
Unknown Executive: I was wondering if you could comment maybe a bit more broadly on co-STIMs and how the, impact of today's data makes you think about investment in additional tumor types or a broader investment across co-STIMs and other combinations.
But we have to see what the final bill looks like and how it's interpreted.
Unknown Executive: Thanks very much.
Unknown Executive: And also, what is the realistic utility of fourth and fifth loading dose, even for standard-dose ILA, especially in the context of one-year-long trials?
Unknown Executive: That's a great question.
So where we're as anxious to see some of that is U S. Only and so we will keep you informed of our thinking has the bill is finalized and starting it could be interpreted.
Unknown Executive: Thank you.
Unknown Executive: I think you bring up a great point.
George Yancopoulos: Metastatic castrate-resistant prostate cancer is considered an immunologically cold tumor and is largely resistant to an immune checkpoint inhibitor, with large trials of PD-1 antibodies showing monotherapy response rates in the single digits.
Unknown Executive: Yeah, those are really interesting questions, and they get into the details of very specific points of the regimen.
Unknown Executive: And I think those of us who have been in this field now were, of course, so excited by the, early promise of immunotherapy, checkpoint inhibitors, and particularly PD-1 antibodies.
Unknown Executive: Many of these, as you point out, have not been directly studied in sort of head-to-head studies.
Unknown Executive: So we would have to, you know, maybe offline discuss some of these issues.
Thanks Lynn Bella next question please.
Yes, you're right.
Unknown Executive: But as I said, details that would require a lot of experimentation may be answered.
Unknown Executive: But of course, over the years, it's been recognized that only a small percentage of tumors, even, in responding, even in the most responsive cancers, not all the patients respond.
Next question comes from the line of Matthew Harrison from Morgan Stanley . Your line is now open.
Great. Good morning, Thanks for taking my question I was wondering if you could comment maybe a bit more broadly on.
George Yancopoulos: As just announced today by Merck, the challenge of metastatic castrate-resistant prostate cancer in terms of the lack of efficacy for checkpoint inhibitors used in standard ways is emphasized by the failure of their large Phase III trial in an earlier stage of this disease.
Unknown Executive: And for many tumor classes, as we just saw with Merck's announcement of their failure, today, in many classes, there's almost no detectable activity.
Co Stims and how the impact of today's data makes you think about investment in additional tumor types or a broader investment cross co stems and other combinations. Thanks very much.
Unknown Executive: Thanks, George.
Unknown Executive: So the holy grail in the field that people have been looking for is an answer to the, question of how do you activate immunotherapy in all these cold tumors, which is, unfortunately, the vast majority of cancers, both solid tumors and hemologic malignancies.
Yeah. That's a great question I think you bring up a great point and I think I think.
Unknown Executive: Bella, can we go to the next question, please?
Those of US who've been in this field now where of course, so excited by the early promise of immunotherapy checkpoint inhibitors, and particularly PD one.
Unknown Executive: Your next question comes from the line of Evan Segerman from BMO Capital.
George Yancopoulos: Our COASSTIN program was designed to innovatively enhance responsiveness in these types of cold tumor classes, such as prostate cancer, and essentially turn these cold tumors into hot tumors. I remind you of the extensive preclinical data we have published supporting this hypothesis.
Unknown Executive: Your line is now open.
Unknown Executive: And so we went down this path based on the science that we could add the second signal, signal two, to the first signal that could activate T-cells.
George Yancopoulos: Since 2019, we have been in careful dose escalation for this prostate cancer program in close collaboration with the FDA.
George Yancopoulos: In our study, patients are dosed weekly with Regen 5678 and every three weeks with Leptile.
George Yancopoulos: However, first dose of Leptile is not co-demonstrated until week four, permitting a period of PSMA by CD28, leading to evaluate monotherapy safety and efficacy.
Antibodies.
But of course over the years, it's been recognized that only a small percentage of tumors even in responding even in the most responsive cancers not all the patients respond and for many tumor classes as we just saw with merck's announcement their failure today in many classes there's almost.
George Yancopoulos: Earlier today, we announced the first clinical data from 33 patients across eight dose levels, which showed dose-dependent anti-tumor activity. The key efficacy endpoint in the study is objective response rate defined as a greater than 50% decline of prostate-specific antigen, or PSA, from baseline and or tumor shrinkage. PSA is a protein produced by the prostate gland and by prostate tumors, and is thus commonly used as a biomarker to diagnose and follow prostate cancer.
Unknown Executive: Hey, guys.
George Yancopoulos: As many metastatic, castration-resistant prostate cancer patients have disease limited to bone lesions and cannot be assessed by conventional resist criteria. Preliminary data from the ongoing dose escalation portion of the trial across eight dose-level cohorts and a total of 33 patients showed dose-dependent anti-tumor activity is assessed by PSA value.
George Yancopoulos: At the five lowest dose levels, which our preclinical models predicted might be sub-therapeutic, there was almost no evidence of any anti-tumor activity, with only one of 17 patients showing a decrease in PSA.
Unknown Executive: Thank you so much for taking my question.
Unknown Executive: And these preliminary data suggest that that hypothesis, and taking immunotherapy now to the next level where all of us in the field were hoping it was going to go with the early advances with checkpoint inhibitors and have been frustrated over over the obviously the last decade or so that we haven't been able to get there this may be the way to get there for the field we have a very broad pipeline of cost inventory by specific by the way we believe this validates the concept of the combinations not only with with tile and the pd-1 class but also with our c3 class of by specifics because it suggests that the preclinical data which is so strongly supported now with this clinical data might also be very predictive for that class so a lot of exciting possibilities across very broad areas diverse solitudes hemological malignancies this is I think could represent the next breakthrough for immunotherapy yeah let me just add to what George said in terms of the investment side we're prepared and we're able to make the investment across many different areas that George is talking about and having under one roof all the reagents owning all of the tile having the variety of coastings having a variety of the cd3 by specs and having all that knowledge we think and the ability to invest puts us in a really terrific position it is early going we have to work through the safety but to me it's sort of reminiscent of what you start to start to see the excitement around the CAR T cells and the CAR T cells actually provide a pretty good lesson in that they gave they give very high levels of activity response rate 75% in some tumors are higher and when you get those very high response rates you also got very high levels of these immune reactions you had in the and you look at the labels you'll see 25% grade 3 neurologic adverse events and a whole bunch of other not to mention all the, cytokine release syndrome so I think that these this is sort of an equivalent stage we've got this tiger by the tail I really believe and George has described it well and and the amazing thing that should be echoed is that the pre clinical data was extremely valuable so regenerate is not a company that just has all these molecules that we've acquired from others these are all homegrown molecules home tested home validated cetera there's a whole collection we couldn't be more excited I could keep going on but maybe I'm getting waved off we should take the next I just want to add and build on what lenses I think just like he said in some ways the Cartes in terms of high efficacy particularly in hematologic malignancies because that's where it's seen high efficacy is seen along with The AEs and some of the responding patients, that's a good analogy, but I do have to point, out the many differences.
No detectable activity, so the Holy Grail in the field.
That that people have been looking for is an answer to the question of how do you activate immuno therapy in all of these cold tumors, which is unfortunately, the vast majority of cancers.
Solid tumors and hematologic malignancies, and so we went down this path based on the science that we could add the second signal signal too.
The first signal that can activate T cells and these preliminary data suggest that that hypothesis.
B right and that we are on the way to this Holy Grail, but this is we believe very early data we have a long way to go but it's a spectacular indication that we have done where we are in the midst of doing and on the path doing exactly what we set out to do which is to turn.
George Yancopoulos: There were no greater than grade three, greater or equal to grade three immune-related adverse events, or IRAEs, at these doses.
Immunotherapy cold tumors into hot tumors with dramatic anti tumor activity.
And the implications here based on all the preclinical data suggest that this is going to be broadly applicable and as you. All know we have been developing a very broad co stimulatory pipeline across many many tumor classes.
And several of them are already in the clinic I mentioned.
We have the prostate data we have ongoing studies with the coastal <unk> for ovarian cancer. We have other costumes that are in the clinic for <unk>.
We have other costumes that are going to be entering into the clinic over the next short period of time. These are going to cover all sorts of Kansas from the lung cancers.
They don't respond to.
To hematologic malignancies, and so forth and so on so we really think that this this could be.
Groundbreaking and taking immunotherapy now to the next level, where all of us in the field. We're hoping it was going to go with the early advances with checkpoint inhibitors and have been frustrated over over the obviously the last decade or so that we haven't been able to get there. This may be the way to get there for the field, we have a very broad pipe.
Line of co stimulatory Bispecific by the way we believe this validates the concept of the combination not only with lip tile and the PD one class, but also with our Cds reclassify specifics because it suggests that the preclinical data, which is so strongly supported now with this clinical data.
It also be very predictive for that class. So a lot of exciting possibilities across very broad.
Areas diverse solid tumors hematologic malignancies.
This is I think could represent the next breakthrough for immunotherapy in.
Matthew Let me just add to what George said in terms of the investment side, we're prepared and we're able to make the investments across many different areas that George was talking about and having under one roof all of them with the agents.
Owning all of Lib tayo, having the variety of co stims, having a variety of the <unk> III <unk> and having all that knowledge.
Thank you.
You really need to invest puts us in a really terrific position. It is early going we have to work through the safety, but to me, it's sort of reminiscent of or to start that started to see the excitement around.
The car T cells, and the car T cells actually provide a pretty good lesson and that they can make it very high levels of activity and response rate, 75% and some tumors are higher and when you get those very high response rate you also got very high levels of these immune reactions.
And you look at the labor Youll see 25% grade three neurologic adverse events and a whole bunch of other not to mention all of the cytokine release syndrome. So I think that this is sort of an equivalent space. We've got the tiger by the tail I really believe and George has described it well and and.
Unknown Executive: These are off-the-shelf reagents, okay, which, God forbid, if there is a safety issue, can, be stopped, and it's much easier, as we're already demonstrating, to create a whole pipeline across a whole variety of broad cancers, and unlike the CAR-T world right now, anyway, these are dramatic effects in solid tumors, which were never really seen before by any other modality.
The amazing thing that should be echoed is that the preclinical data was extremely valuable. So regeneron is not a company that just has all these molecules that we've acquired some others. These are homegrown molecules home tested home validated et cetera, Theres a whole collection, we couldnt be more excited I could keep going on but maybe.
I'm getting waved off we should take the next caller.
Wanna add and build on what lenses I think just like you said in some ways the car Ts in terms of.
Unknown Executive: So this is actually pretty exciting.
Hi, up because he particularly in hematologic malignancies, because thats, where it seems high efficacy.
Unknown Executive: There are analogies there in terms of dramatic efficacy, but also very important differences, here that establish this as a potential breakthrough new class.
As seen along with.
The <unk> and some of the responding patient that's a good analogy, but I do have to point out there are many differences. These are off the shelf reagents, okay, which god forbid if there is a safety issue can be stopped.
Unknown Executive: Okay, thank you, George and Len.
Unknown Executive: Next question, please, Bella.
Unknown Executive: Sure.
And it's much easier as we are already demonstrating to create a whole pipeline across a whole variety of broad cancers.
Unknown Executive: Your next question comes from the line of Chris, Tim Anderson with Wolf Research.
Unknown Executive: Your line is open.
And unlike the car T World right now anyway. These are dramatic effects.
Unknown Executive: Thank you.
Unknown Executive: I'd love for you to expand on kind of some of the next steps for 5, 6, 7, 8.
Unknown Executive: A question on the 5, 6, 7, 8 data.
Unknown Executive: What do you want to see in additional cohort 8 patients and even at potentially higher-dose cohorts to move into a registrationally-directed trial?
Unknown Executive: You report out one CR, but no other response rate data using Rhesus criteria, so I'm wondering, if there's anything else you can say about tumor shrinkage beyond that one CR in those upper three cohorts, and then to clarify, you mentioned a host of grade three AEs in the press release, and some of those, to me, don't seem like the classic immune-related, AEs.
Solid tumors.
We're in ever really seen before by any other modality. So this is actually pretty exciting there are analogies there in terms of dramatic efficacy.
Unknown Executive: Thank you.
Yeah.
But also.
Very important differences here that establish this as a potential.
Breakthrough new class.
Unknown Executive: So are you...
Unknown Executive: I'm hoping you can clarify which of those you consider to be IRAEs, maybe you consider, all of them to be.
Okay. Thank you George and Len next question. Please Bella.
Unknown Executive: Thank you.
Unknown Executive: And if we continue down that path, we will, as you say, also continue to explore other dose levels and so forth.
Unknown Executive: I think we've given a lot of detail, and we're going to be giving a lot more details, obviously, in the upcoming meeting.
Sure. Your next question comes from the line of.
Chris Tim Anderson with Wolfe Research your line is open.
Unknown Executive: Suffice it to say that, as I mentioned, for most of these patients, actually, or many, of these patients, they don't have lesions outside of the bone, which is why we use PXA as the indicator of total disease activity, because you don't have that many lesions.
Thank you.
Question on the 5678 data you report out one CR, but no other response rate data using recessed criteria.
Im wondering if theres anything else you can say about tumor shrinkage beyond that one if you are in those upper three cohorts.
And then to clarify you mentioned a host of grade three AE is in the press release.
Unknown Executive: So that's one point where we're focusing on the PSA.
Unknown Executive: We do believe that many of the IRAEs are the sort of IRAEs that you do see with both PD-1, therapy, and as Len mentioned, also with CAR-T therapy, and I think we indicated every single grade 3 that we had, and indicated that actually, even though these are very early data in the treatment of most of these patients, many of these are actually already resolving or resolved.
And some of those to me don't seem like the classic immune related Aes. So are you.
I'm, hoping you can clarify what you consider to be maybe you consider all of them to be thank you.
Well I think we've given a lot of detail.
We're going to be giving a lot more details obviously in upcoming meetings suffice it to say that.
As I mentioned.
For most of these patients actually have many of these patients. They don't have lesions that side of the bone we choose one right, which is why we use PSA is as the indicator of total disease activity. Because you don't have that many lesions. Okay. So that's one point, while we're focusing on the PSA.
Unknown Executive: And we're going to continue to follow these patients and look for, hopefully, as seen, remember, cohort 6, that one patient.
Unknown Executive: The reason we highlighted them is they were the first responding patients, and we've now, had almost a year of follow-up, and we have this very impressive durability of response there.
Do believe that many of the.
Unknown Executive: The other cohorts are much more recently treated, and that's why we're not getting that much, follow-up, because these are patients who are in the very early months of being treated.
<unk> are the sort of or is it you do see.
Both.
One therapy and as I mentioned also with car T therapy, and I think we indicated every single.
Unknown Executive: But, obviously, you hear it in our voices, probably, those of us who have commented.
Great three that we had indicated that actually even though these are very early data in the treatment most of these patients.
Unknown Executive: We think this really has the potential to be game-changing. Game-changing for the field of immunotherapy and taking immunotherapy to the next level.
George Yancopoulos: The lack of anti-tumor activity among these patients was consistent with the approximate 6% response rate reported in other trials with anti-PD-1 monotherapy.
Many of these are actually already resolving are resolved.
Unknown Executive: Also game-changing for our oncology program and for our company.
And we're going to continue to follow these patients and look for hopefully at <unk>.
Unknown Executive: Thank you.
Remember cohort six that one piece of the reason we highlighted then is that one of the first responding patients. So we've now had almost a year of follow up and we have this.
Unknown Executive: Bella, next question please.
Unknown Executive: I think we have time for two more.
Very impressive durability of response there the other cohorts are much more recently.
Treat it and that's why we were not giving that much follow up because these are patients who are in the very early months of being treated.
Unknown Executive: All right.
Obviously, you'll hear in our voices, probably those of US who have commented. We think this has the potential to be game changing game changing for the field of immunotherapy and taking their therapy to the next level also game changing.
Oncology program and for our company.
Thank you.
Darla next question. Please I think we have time for two more.
Alright. Your next question comes from the line of Chris Raymond from Piper Sandler. Your line is now open.
Hey, Thanks, maybe.
Maybe back to Eylea and the high dose format for a second so our checks.
Have indicated a pretty good chunk of.
<unk> patients.
Our actually Eylea patients, specifically eylea patients who are on a higher frequency.
Dose regimen.
So maybe two part question here.
First maybe talk about the plan to sort of mitigate this either before the high dose format or even after and I guess is the plan with the high dose.
Yeah.
One would expect that.
Switching paradigm for the high dose eylea would be easier than <unk> is that sort of part of the plan.
And then the second part is our checks also indicate a surprisingly low awareness of this high dose format among docs.
Are these signals at odds with what youre seeing or is that correct.
Outside of actually just having the data presented.
Right.
Yes.
There are quite a few.
Good question Manny.
By the way, we help market products with whatever route.
Surprising that there is a not awareness of our product that's an investigational product <unk> can comment on there.
Let me take a start on some of the situated in a market in and perhaps George will add to that but first let me come in that you know obviously, we presented today very strong results on the growth of Eylea standard of care in the marketplace. Both in the U S. M D worldwide information.
Today in the branded category U S. Anti VEGF category, we have 75% of the branded market. We are approaching 50% of the overall market. So truly Ali is the standard of care.
Probably best that are first NAV organization comment on where their product is being used I'll comment anecdotally, but early days.
Response has been fairly muted fairly low grade used in concentrated.
Accounts, rather than market wide as for the future. We're very excited and optimistic that the flipper saved eight milligram will represent a new standard of care with true durability of dosing and the same type of efficacy and safety that we see with Eylea. So we're really excited and certain.
Our clinical organization has put together a trial designs it truly test the durability of the product and then we will allow the commercial organization to determine what the best strategy is for launch if and when we get FDA approval Alright, Let me just add to that.
It is important to point out that the reason why eylea has become.
The leading anti VEGF agent branded VEGF agent is because it allows most of the eylea patients to go on longer interval dosing and have and be very satisfied with our response now of course as with any disease in situations not every.
Patient is going to do perfectly well and we know that there is a small percentage of patients who do need more frequent eylea.
And of course, if one has a new untested agents that the doctors haven't seen their hope and the place that they would first try in the small percentage of patients, who who don't who are not doing well.
And of course, that's why it's being used in that setting now our goal scores with the high dose of Eylea is to take now the best in class agent and hopefully produce even better.
Results in terms of allowing the small percentage of patients who have who are being dosed more frequently where even the patients who are now on a week regimens were 12 <unk> ready to go to more extended regimen and that's the whole point of the design in the study. So I don't think theres any surprises that it's the small percentage of <unk>.
Very hard to treat patients where somebody would try a non tested agent that theyre, hoping might work better, but we have a real logical rational way that we are now taking eylea, bringing forth. This high dose formulation and hope to extend the benefits that we're already.
<unk> seen with this tried and true in terms of both safety and efficacy reagents, and even expanded and get even for the small percentage of patients longer dosing and even extend maybe everybody else. Okay. Thanks George.
Last question please.
Sure and your last question comes from the line of Carter Gould.
Your line is now open.
With Barclays.
Hi, sorry, yes, thanks, Hi, good morning, Thanks for taking the question. Thanks for squeezing Nelson I guess.
Now that you're fully own sort of Ohio can you update us on kind of where you stand on.
Our subcutaneous formulation given what we've seen data from some of your competitors, they're in and the importance of that to kind of keep pace.
Looking down the road then can you talk about the feasibility of potentially co formulating.
Tayo.
One of these five specifics.
Co stimulatory isn't if thats.
You can feasibly possible recognizing it's a ways away. Thank you.
You can imagine we're working on on sub Q.
To give you some details I think down the road later this year in terms of co formulation and we have a strong view.
If you're doing it for gamesmanship or patent work and all that kind of stuff you know.
That's one thing, but what we're more focused on is getting the optimal dose and the optimal regimen.
They're not likely to be the same.
And many of these settings there its the only useful useful if you're going to try to have a single regimen that coverage. So we're a long way from worrying about that we're far more focused on the fact that we've turned cold to hot.
It is a big deal at least in our eyes, and obviously, it hasnt escaped yours or I'm sure anybody's attention that now with this just hum.
George Yancopoulos: At the next three dose levels, we began to see clear evidence of dose-dependent anti-tumor activity, which was generally seen within six weeks of starting the combination treatment. At dose level six, one of four patients experienced a 100% decrease in PSA and a complete response in target lesions based on resist criteria.
Unknown Executive: But the level of tumor activity and balanced by the safety events that we're seeing on doses are occurring now at levels where we think that...
Unknown Executive: Your next question comes from the line of Chris Freeman from Piper Sandler.
Unknown Executive: And they could be providing a new standard for benefit risk for this population.
Unknown Executive: Your
Unknown Executive: I think that it's important to point out and remind everybody, I mean, I said it, but just, to say it again, the IRAs were only seen in the patients who had profound anti-tumor activity.
Unknown Executive: line is now open.
Unknown Executive: That is, the patients who didn't benefit did not really indicate in terms of higher level, IRAs to have significant safety concerns.
Unknown Executive: Hey, thanks.
Appreciated new data, where it looks like we're on the way of turning cold tumors to hot and combination with live Toyota we are in retrospect very happy.
Unknown Executive: And that is, of course, what you want to see, that the patients who have the benefit, that the safety is limited to those, so you're not doing harm to the patients that you're not benefiting.
Unknown Executive: Maybe back to ILEA and the high-dose format for a second. So our checks have indicated a pretty good chunk of the BISO patients are actually ILEA patients, specifically ILEA patients who are on a higher frequency dose regimen.
Unknown Executive: Okay.
We now have taken on sole ownership of low tayo.
Thanks, Len and George I think that's all we have time for today, but could you. Please conclude the call.
Thank you. This concludes today's conference call. Thank you for your participation you may now disconnect.
The conference will begin shortly to raise.
I'll hand during Q&A, you can dial star one one.
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Okay.
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