Q2 2023 Regeneron Pharmaceuticals Inc Earnings Call
[music].
Okay.
Time of this webcast will be available on our Investor Relations website. Shortly after the call ends.
Joining me on today's call are Doctor Leonard Schleifer Board Co Chair co founder President and Chief Executive Officer, Dr. George John Coppola Sport Co Chair co founder President and Chief Scientific Officer, Marion Mccourt Executive Vice President and head of commercial.
<unk> were 41% of total revenues the highest proportion for any quarter in the last 10 years, excluding those with Covid antibody revenue contributions overall, we were pleased with the trajectory of the business and believe the company continues to be well positioned to deliver long.
Great.
In a few minutes George married and Bob will provide commentary on pipeline developments commercial execution and financial results that we achieved during the second quarter.
For the remainder of my remarks today I will focus on a flipper set eight milligrams. We are very excited about the emerging clinical profile, including the compelling two year data from the pivotal photons study in patients with diabetic macular edema, which George will discuss in more detail now I will summarize the progress there.
It's been made towards getting this important product candidate approved by the FDA.
As we announced in late June the complete response letter or CRA al that we received from the FDA regarding our biologic license application for a flipper set eight milligrams for the treatment of patients with wet age related macular degeneration D M E and diabetic retinopathy did not.
Identify any issues related to a flipper set eight milligrams clinical efficacy safety profile trial design labeling or drug substance manufacturing nor has the FDA requested any additional clinical data.
The Sierra was entirely based on unresolved observations, resulting from the May 2023 F. D. A preapproval inspection of a third party contract manufacturing organization Catlin that regeneron engaged to complete vial filling for a flip this at eight milligrams.
The inspection observations were noted in our form 43 and were related to our manufacturing line and catalyst facility that is used to fill vials with the flip is at eight milligrams as well as our C. Five antibody cause element for the ultra rare chapel disease, which has a producer.
Date of August 20.
The inspection was conducted as part of the FDA review process for both flip it said eight milligram BLA and the <unk> BLA.
Broadly speaking the observation sided production and process control procedures equipment validation and facility maintenance.
Cadillac and the FDA have had multiple discussions since the flip it's at eight milligram CRA out.
There is a clear understanding of the remediation work that is required to allow the FDA to resume approving BLA that involve manufacturing on this slide.
Catalyst has already provided data and information to the FDA that could satisfy some of these requirements and expect to be able to provide the remaining required data and information by mid August .
The FDA said, they will strive to complete their review expeditiously.
Prior to the August 20th producer date for Peds element.
However, if they are unable to complete their review before this date. The FDA said that they may need to extend their review by up to three months. If they do extend their review FDA has stated that they will continue to prioritize the review and completed as early as possible.
Importantly, the FDA has also stated that their review of the catalyst manufacturing data in the context of the <unk> BLA will support actions for both the present, a mab B L E and the a flipper set eight milligram BLA resubmission, which.
It's already been submitted.
In summary, we expect to submit by mid August all of the cabinet manufacturing data and information required to address the observations, resulting from the pre approval inspection.
The FDA has stated that they will strive to complete their review expeditiously prior to August 20th.
If not we anticipate the FDA will act on a pause allomap and flip is at eight milligram BLA before the end of the third quarter.
In closing we remain confident in our strategy of focusing invest investment on our internal R&D capabilities, while exploring potential external collaborations as well as in our ability to deliver breakthroughs to patients and value to shareholders with that let me turn.
The call over to George.
Thank you Lynn.
I would like to start with a recent update on the <unk> eight milligram data in D. M E that Lynn referred to at the annual American Society of retina specialists meeting we presented the two year results from our photon study. These data demonstrated that the vast majority of it.
<unk> eight milligram patients randomized to the 12 week 16 week dosing intervals continued to sustain vision and anatomic improvements through 96 weeks.
89% of all of <unk> eight milligram patients were able to maintain at least every 12 week dosing intervals for the entire two year period, while 84% of patients assigned to every 16 week dosing at baseline were able to maintain that interval or extend beyond it.
That point, many patients met the criteria for extension to longer intervals with 44% meeting the criteria for greater than 20 week dosing intervals, including 27% who are eligible for 24 week dosing.
The safety profile ever flippers at eight milligram remained consistent with Eylea.
Sustaining vision and anatomic improvements, while maintaining such extended dosing intervals over two years is unprecedented in the field.
Our results further strengthen the clinical profile of <unk> eight milligram and position this investigational medicine to become the future standard of care for retinal diseases.
Later in the third quarter, we Embraer are planning to share initial results from the second year analysis of the Pulsar study in patients with wet AMD.
Moving to our <unk>.
<unk> inflammation pipeline undo pixel.
We look forward to the FDA decision for our S. BLA in chronic spontaneous urticaria facto between 2023 in terms of <unk> in patients with COPD.
We and Sanofi are pleased to announce that depicts <unk> was granted breakthrough designation for uncontrolled COPD with Nielsen I still type based on the positive results of the phase III <unk> study based on ongoing discussions with the FDA. We expect that in addition to the <unk> study results, we will need to provide data from the replicate phase III.
This study to support a BLA and such data requirement remained under discussion with the FDA. We continue to expect final results for the notice study by mid 2024.
Moving to pick him at our anti IL 33, antibody, which is being evaluated for COPD and former smokers in May <unk> announced that the phase III Aerify, one and two studies had passed an interim futility analysis. These studies remain on track for readout and regulatory submissions in 2025.
Both there to pick them up and picks and could transform the treatment paradigm for COPD.
Levering their distinct mechanism of action and reducing different types of inflammation that contribute to COPD.
Moving to oncology and combinations with lip tile in June in an oral presentation at the Astro Conference. We presented data for the combination of Fianna map, our lag three antibody plus lip tie them, which showed consistent response rates ranging from 56% to 63% across three independent cohorts of <unk>.
Vance melanoma patients, including a new cohort of patients who had received prior anti PD one therapy in the adjuvant melanoma setting. These response rates represent about double the rate historically seen with anti PD, one monotherapy in similar settings and clinically meaningful responses were observed in post hoc analysis.
Various populations of interest, including patients with poor prognosis factors and bearing tumor PDL one expression levels.
Safety profile of <unk> and look to Io combination in these cohorts appears to be generally consistent with the safety profile of the tile monotherapy and other anti PD, one or PDL, one agents, except for the higher rates of adrenal insufficiency, which were great two were lower than the majority of the cases with all cases successfully manage with steroid replacements are.
<unk> plus lip Tayo phase III studies in metastatic and adjuvant melanoma are enrolling patients as are the phase II portions of the phase three studies in advanced non small cell lung cancer.
Next onto bi specifics for solid tumors, which are being investigated in combination with lip tayo and other modalities. Later this year, we are planning to share initial clinical data for the combination of reman or Matt or Marc <unk> by <unk> Bispecific plus lip tile in advanced ovarian cancer.
Last year, we showed encouraging <unk> monotherapy data in advanced ovarian cancer, and we believe that combining it with lip tayo may lead to enhanced anti tumor activity.
Moving to coast inventory by specifics, we're currently exploring multiple different CD 28 coast inventory Bispecific antibodies in early clinical trials in a variety of tumor settings in combination with lip tile or with corresponding CD three bi specifics.
Our phase one study of re Gen 5678, our PMA by CD 28, co stimulatory Bispecific in advanced prostate cancer in combination with lead time, which has demonstrated promising antitumor activity.
The safety profile of this combination continues to pose a challenge highlighted by our recently observed second grade five adverse event where death.
Although serious immune mediated adverse events continue to be highly correlated to patients who experienced profound responses, we have decided to discontinue enrollment of new patients with full dose <unk> combination.
And explore <unk> by <unk> for a combination with lower doses of the tile. We also will continue to explore <unk> by <unk> as monotherapy, where we have seen anti tumor activity in some patients and we will explore <unk> by <unk> 28 in combination with other immunotherapy modalities.
We believe our prostate cancer data support the exciting potential of coast inventory by specifics both the challenge of focusing the response solely to the tumor.
Our preclinical studies and mechanistic insight suggest that degree of immune related adverse events seen when combining <unk> with PD one blockade may depend on the particular kosta target and tumor types. Moreover, combining costumes with C. III by specifics may not result in these types of severe immune mediated adverse events along these lines.
Our other co stimulatory bispecific programs continue including our MX 16 by CD 28, co stim with lip tile or <unk> by situated costumers will be met.
Adam App, both in ovarian cancer as well as our Egfr by CD 28, costumers with tile and colorectal and other cancers. In these early dose escalation studies, we have observed limited immune mediated toxicity to date.
We're also excited about combining our co stimulatory bispecific with <unk> III <unk> programs, which continue to progress we have initiated dosing of our CD 22 by $2 20 to costume toward bi specific which those your next to map. Our CD 20 by phase three bispecific in relapsed refractory diffuse large b cell lymphoma, which.
Hope can improve immune press-back succeed demonstrated by <unk> alone in that setting in terms of <unk> monotherapy U S and EU regulatory submissions for both relapse or refractory follicular lymphoma, and diffuse large b cell lymphoma remain on track rigs.
Regarding <unk>, our BS It may buy CDW buses epic, we recently presented updated data at the <unk> annual meeting demonstrating early deep and durable responses in patients with heavily pre treated.
Myeloma with 71% objective response rate and 59% of patients achieving a very good partial response or better at the recommended 200 milligram dose with a median follow up of only six months with.
With the data potentially improving as they mature we believe these data support <unk> best in class potential with differentiated efficacy safety hospital requirements and favorable dosing schedule in the fourth quarter of this year, we are planning to present additional data with longer follow up and to submit regulatory applications for <unk>.
Demand. We also plan to start combination studies with the myeloma specific coast them next year.
Next to genetic medicines in the second quarter, we in Ala Island jointly announced the first human data, suggesting that a S. I RNA can be used to silence pathological genes in the brain, which may open up an entirely new approach for fighting back against neuro degenerative and other central nervous system diseases.
We plan to initiate initiate additional clinical programs for CNS diseases next year.
Announced by our collaborators our Intel you we plan to initiate the first in vivo CRISPR based phase III clinical program by year end subject to regulatory feedback in patients with <unk> amyloidosis cardiomyopathy.
And in terms of our targeted gene delivery pipeline, we hope to initiate our first clinical program in 2024 for hemophilia B.
In conclusion Regeneron as R&D engine continues to grow and deliver differentiated late and early stage opportunities and we're looking forward to several important clinical milestones in the second half of this year with that I will turn the call over to Marion. Thank.
Thank you George in the second quarter Regeneron delivered impressive results across our commercial portfolio, notably regenerative medicine is currently lead multiple disease categories and our future is promising with short and longer term scientific innovations on the horizon as Lynn mentioned, we eagerly await the anticipated approval.
At eight milligram for retinal diseases beyond that a robust late stage pipeline supports additional commercial opportunities that we anticipate will continue to drive credit starting with Eylea, the anti VEGF category leader in retinal diseases.
Net sales for $1 5 billion down 7% year over year and up 5% quarter over quarter Eylea total category share remained stable at 46% over the last two quarters and at approximately 70% for branded share at the end of the second quarter. It was minimal.
<unk> change in wholesaler inventory levels compared to the levels at the end of the first quarter. Our strategic focus is to maintain and grow regeneron anti digest leadership, and we're well positioned to deliver on this goal and an increasingly competitive category last week at <unk>, we presented our two year data in diabetic macular edema.
Which further confirm the unprecedented durability of a flipper set eight milligrams with 44% of patients assigned intervals of at least 20 weeks at the end of their second ear market enthusiasm remains high for this important innovation and our commercial team is ready and excited to launch a <unk> eight milligram upon approval.
Moving now to let Tayo global net sales were $210 million up 49% year over year on a constant currency basis in the U S. Net sales were $130 million up 43% driven by steady growth in non melanoma skin cancer and strong growth in lung cancer and lung cancer.
Slide the U S. <unk> net sales were $80 million or 58% increase on a constant currency basis growth was driven by demand in the non melanoma skin cancer indications and initial launches in lung cancer.
We expect to drive accelerated performance as we build regeneron has presence in key international markets.
Access and reimbursement for lung cancer indications.
Lastly to depiction, which continues to revolutionize the lives of patients with type two diseases global net sales were approximately $2 8 billion up 34% year over year on a constant currency basis, and up 12% compared to the first quarter of 2023 and the U S. Net sales grew 33% year over year to two.
1 billion driven by growth across all indications and age groups. Once again to pixel is the number one prescribed biologic medicine for new to brand patients across all approved indications and as the category leader in total prescriptions in four out of five indications, we see impressive uptake of course, our recent.
U S launches with significant opportunity for future growth.
As soon as Delek esophagitis, well over 15000 patients had been initiated since launch and we are actively investing in disease awareness initiatives to empower patients to seek diagnosis and treatment for this debilitating disease are proud that <unk> launch is off to a fast start with physicians rapidly recognizing it.
Financial performance across the organization.
Second quarter 2023, total revenues increased 11% year over year to $3 2 billion driven by strong depicts and sales growth coupled with improving profitability.
Within our scientific collaboration and continued momentum from lip Tayo set.
Second quarter diluted net income per share was $10 24 on net income of $1 2 billion.
Moving to collaboration revenue and starting with Bayer.
Yeah.
Total scientific collaboration revenue was $944 million in the second quarter and grew 39% versus the prior year our share of profits from the commercialization of the pixel <unk> Saar was $751 million, an increase of 51% from the second quarter of 2022.
Reflecting higher volumes and an improving margin profile for depiction. We expect further margin expansion from the collaboration driven by continued to pick scent.
Global sales growth, coupled with higher gross margins due to significant drug substance yield improvements, resulting from to Peel Your mab.
Manufacturing process enhancements these.
These factors are also contributing to a gradual increase in the rate in which we are repaying the antibody development balance to Santa fee. Once this balances fully repaid in the next few years, we expect a meaningful step up in our share of Santa Fe collaboration profits.
Recall that a portion of our Santa Fe collaboration revenue is related to the manufacturing of commercial supplies for which we are reimbursed by Santa fee as we continue to phase into higher yield manufacturing process for <unk>. We expect these second half reimbursements to be approximately 25% lower than the first half of 2000.
Other revenues were $69 million in the second quarter up 17% versus the prior year. We continue to expect other revenue to be higher in the second half of 2023 as compared to the first half were <unk>.
That other revenue primarily includes reimbursements for the manufacturing of certain regeneron discovered products commercialized by other companies, including ex U S. Praluent, <unk> and zelle trap as well as royalties for our lawyers and our share of global profits for Arca list.
Moving now to our operating expenses second quarter 2023, R&D expense was $974 million representing continued investment in our robust pipeline year over year R&D growth was primarily driven by higher head count and related costs and funding of the company's pipeline, which encompasses approximately 20%.
Late stage or potentially Registrational studies, including our ongoing a flipper set eight big studies phase III studies in earlier lines of therapy for our Haemonchus product candidates and are advancing fiala Mab development program. The increase in R&D expense was also driven in part by the impact of the 2022 amendments to.
The scientific collaboration agreements and increased manufacturing activity associated with the company's earlier stage product candidates.
SG&A was $562 million in the second quarter, reflecting the ongoing build out of our ex U S operations. Following the acquisition of global rights to lip Tayo last year higher head count and related costs and higher contributions to independent not for profit patient assistance organization.
Second quarter, 2023, <unk> was $213 million up 44% versus the prior year driven by manufacturing costs associated with higher depicts and volumes.
As we progressed the phase in of the improved manufacturing process for it depicts and we expect <unk> in the second half of this year to decline versus the first half as our unchanged 2023, <unk> guidance reflects with the fourth quarter expected to be the lowest of the year now.
Now to cash flow and the balance sheet in the first half of 2023 Regeneron generated approximately $2 1 billion in free cash flow. We ended the second quarter with cash and marketable securities less debt of approximately 12 6 billion.
We continue to opportunistically deploy cash towards share repurchases throughout the second quarter buying back $723 million of our shares at current levels. We remain buyers of our shares and as of June 30th approximately $2 $3 billion remained available for repurchases under our existing authorization.
Finally, we've made some minor changes to our full year 2023 guidance ranges based on our first half results and our latest outlook for the remainder of the year. We have tightened guidance ranges for 2023, SG&A and R&D spend and provided updated guidance ranges for our effective tax rate a complete summary of our latest poll.
Your guidance is available in our press release issued earlier. This morning in conclusion Regeneron delivered positive financial results in the second quarter of 2023, and we remain excited for the potential upcoming launch of a flip or sub eight Meg in the third quarter.
With that I will now pass the call back to Ryan.
Thank you Bob.
Concludes our prepared remarks, we will now open the call for Q&A to ensure we are able to address as many questions as possible.
He will only be able to answer one question from each caller before moving to the next.
Shannon can we go to the first question. Please.
Thank you as a reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced.
To withdraw your question. Please press star one again.
Yeah.
Our first question comes from the line of Evan <unk> with BMO. Your line is now open.
Hi, guys. Thank you so much for taking my questions and all the updates today on the eight milligram TRL I am do you have any idea if it's a class one or class two resubmission and you say that FDA is going to take action in the third quarter or could take action. What does that mean or are they going to provide an approval decision or is that just going to be acceptance of a refi.
Milling. Thank you.
Hi, everyone. Thanks for your question. So just to clarify the FDA has not classified there.
Resubmission as class one class two because they have said that the.
<unk>.
Timeline for <unk> will be governing what happens with our eight milligrams. So let me remind you of what happened there was a pre approval inspection for both products that puts allomap is for our ultra rare disease chapel disease than it has at Paducah date.
The 20th what the FDA has said that.
They will.
Review the.
Remediation efforts in the context of the <unk> BLA and therefore, whatever happens there we will govern the timeline and results and when we say we expect them to take action. We mean, we expect them to make a an approval or not decision if they find the <unk>.
Manufacturing remediation acceptable for the <unk>, then we think there'll be in a position to probably make a decision.
On approval.
For the eight milligrams.
Does that answer your question.
He is off the line, we'll move to the next question Shannon.
Our next question comes from the line of.
Tyler Van Buren with TD Cowen Your line is now open.
Hi, there good morning, Thanks for taking the question so the timeline to the FDA potentially taking action by the end of this quarter on hydro failure is very encouraging.
<unk> clearly surprised by the short line so kudos to you all for executing.
But as we think about the data submission and a couple of weeks what additional detail and you provide regarding the manufacturing data and other information that are required from Cadillac and how feasible. It is to review this in a few days prior to the <unk> decision date on August 20th.
Right Great question so.
We've been in very close contact with our cabinet and the FDA multiple meetings oral written and so forth.
And we have a clear understanding of what's required from an information point of view.
And from a data point of view.
Submissions have been on a rolling basis that as Kevin has completed work they've submitted data and information already to the FDA.
There is very little that will be left for the last submission at the middle of August .
And that's why the FDA has told us and they know what's coming that they will strive to expeditiously review that.
If they can't get that done.
By the few days before the.
<unk> <unk>.
<unk> date, they have told us that they will prioritize.
Our review and do that as soon.
As soon as possible that's why we have confidence about this getting done in this quarter. So to summarize the data has been coming in on a rolling basis.
Have everything we need.
Last piece of information that will be rolling in and submitted by the middle of the month. The FDA will strive expeditiously to review that in China in time for the August 20th producer date, but if not there'll be a clock extension for up to three months, but they have told us that they will prioritize our review.
And Thats why we believe it will get done if not in time for the <unk> date in the near future thereafter.
Okay. Thanks, Glenn next question please Shannon.
Our next question comes from the line of Mohit Bansal with Wells Fargo. Your line is now open.
Great. Thank you very much for taking my question and really thank you very much for providing all the clarity on the filing situation right now.
Maybe thinking.
So just trying to understand this a little bit more so is it fair to say you have already submitted everything purpose allomap and the remaining part is related to related.
Related to our high dose Eylea only is that fair.
Actually the way you should think about it we've submitted everything we need for <unk>, except for the final remediation of the preapproval inspection, which applies both to <unk> and to the eight milligram eylea sets a single preapproval inspection same data and information required for Boe.
<unk>.
One is that is and then we will have completed everything necessary for <unk> and for the Eylea eight milligrams.
Our linked together the FDA has clearly stated to us that the review of this remediation in the context of the <unk> BLA well governed what happens to the eight milligram.
Remediation.
So there's nothing specific to either pause element or a flipper set about the data. This has to do as Len said with general manufacturing processes and operations at the catalyst manufacturing facility, particularly with this one manufacturing line and that's a very good point, Georgia.
So that's why the single Preapproval inspection applies to both products. It wasn't the private specifically it was the processes and validation on the line that fills the two products. So one remediation satisfies both all the data and information that being submitted on it.
A rolling basis. The last piece comes in in the Middle of August . The FDA is aware of this they have told us in writing that they will strive to review that expeditiously.
If they get it done before the end of the Purdue for an original Purdue for clock Thats, great. If they don't they'll considered an amendment that will set the clock back three months, but notwithstanding that three months they've told us that they will continue to prioritize our review. So we're very pleased and we're working very hard catalysts work.
Very hard the FDA is working very hard everybody wants this.
Done properly and finished.
Property Remediated.
Next question please Shannon.
Our next question comes from the line of Tim Anderson with Wolfe Research. Your line is now open.
Thank you very much I have a question on.
On the bis memo for ROE for Q3 that they're capturing 30% of treatment naive patients.
It seems like Oh.
Quite high figure frankly, and then they said afterwards that if not extended dosing that's driving this as much as it is the better drying that they'd say docs are saying with their product I'm wondering how those comments kind of lineup with what you're saying.
Lay out in the U S market. Thank you.
Sure So I won't comment on.
Our performance and as I just shared with you the performance in the quarter was with strong certainly we see steadily as the standard of care in the anti VEGF category. We continue to capture not only naive patients, but also another big source of business is switch.
<unk> from Avastin.
The other branded competitors are smaller in market today, but I would say that beyond your comment.
But best to get more clarification from you know the individuals who are commercializing <unk> in the market.
But certainly I do want you to know that we are seeing continued strength in eylea performance and obviously very much look forward to having be potentially game changing opportunity to bringing a flipper set eight milligram into the marketplace and where the profile of efficacy safety and durability has so many kols and prescribers.
Excited based on what they've seen recently in the clinical data presented at a Srs.
Thanks, Marion next question please.
Our next question comes from the line of Chris Raymond with Piper Sandler. Your line is now open.
Yeah. Thanks, just maybe another market that Jeff market related question. So I know these extended dose therapies have benefits in of themselves on the face of them, but.
There's been some decent level of market chatter around docs looking to free up injection capacity.
Specifically to make room for geographic atrophy patients.
And specific to that with the appellate drug just maybe curious how widespread was that notion.
For the stuff ovary safety issue and now with.
With the issue have you noticed a discernible shift among docs, who were talking about that and then maybe a related question you guys have talked I think about an early effort of your own in geographic atrophy.
Clearly the market sizable.
When could we expect to hear more about that effort.
Okay.
So let me first in terms of the market dynamic I think the most exciting thing and most important thing about a flipper set eight milligram as it gives prescribers for all of their patients whether you know a naive patient a patient currently on eylea or a patient in another anti VEGF category product.
The opportunity to decide if that patient is a candidate.
When we launch and you know when we have an FDA approval. If the patient is a candidate for liver step eight milligram.
That does have benefit to the patient and prescriber and potentially to the office capacity in patient flow.
It's premature to comment on the category that we're not directly involved in we are very focused on making sure that we are ready for lines and certainly at the proper time educating all stakeholders honest slippers up eight milligram once we have an approval.
And in terms of our own efforts as I'm sure. Many are aware we've been very active with what we feel are very innovative approaches in the complement blockade field and we believe that we may have an approach that may allow potentially treatment in these retinal diseases.
While avoiding some of the very concerning adverse events, having to do with issues like inclusive vascular and so forth and you'll be hearing much more about those efforts.
In the short term.
Okay. Thanks, Marion enjoying Shannon please move to the next question.
Our next question comes from the line of Carnival with Barclays. Your line is now open.
Great Good morning.
And thanks for all the transparency, maybe switching gears a bit in terms of the update on <unk> and in the report of the death in the.
And the change in the dosing paradigm with 5678 in combination with Ohio, George maybe you can speak about the implications for other combination of efforts of CD 20 eights with the pile.
Is this going to require a lower dosing with those efforts with tayo portion in gist.
The broader implications there and just fill your level of confidence you can kind of threat.
Thread that thread that needle in terms of the dosing levels. Thank you.
No great question.
Obviously as you know in cancer. The biggest hurdle is actually coming up with approaches and new classes of agents that have the ability to really change the efficacy paradigm to really bring.
New ability to address cancers that have previously been.
Untreatable are refractory to treatment. So I think that that excitement continues with the coast in platforms in terms of all of the signs in the preclinical modeling and predictions.
Have really delivered in terms of showing that this new class.
Does seemingly has the ability to really change the efficacy paradigm, but now we have to balance that as you said with the safety because with more efficacy, which is often seen in the cancer field comes more safety concerns.
What you just said what we've seen frequently and we're now beginning to see it in the clinic that the amount of <unk>.
Associated immune adverse.
Events is related to the particular kosta target. So what you see for one close to him doesn't necessarily apply to the other coast in.
So we are as you said for our <unk> host in moving out of lower doses of <unk>, because the full dose combination while it seems like it has the potential to be very efficacious.
So it has in some cases these associated only remember only in the patients who are having deep responses.
The associated and in some cases that can be very serious even resulting in death associated adverse events. So we're moving away from full dose combinations, there and were going and hoping that we can maintain some level of the efficacy, but avoiding who's very serious immune.
Immune related adverse events were not doing that yet because we're not seeing any sort of immune related adverse events with our other costumes and the other very very important thing just to remind you from our preclinical modeling these types.
<unk> Yoon related adverse events that we're seeing with the PMA in combination posted in combination with little.
Are not seen pre clinically when you combined with the C. III biospecifics and so we are very aggressively trying to move forward those programs as well, where we hope we can have a better efficacy safety profile. So.
It's both a very exciting time to have these very active molecules remember remind you we have three classes three independent classes.
Very active molecules that have been individually validated in our portfolio.
The checkpoint inhibitors.
In particular, our PD, one and our our lag three checkpoint inhibitors, which are validated we have our <unk> III <unk> specifics were validated we now have our coast ends which are validated from the efficacy perspective, very exciting time to be mixing and matching them. The challenge is to mix and match them appropriately to Max.
The mine the signal to noise that therapeutic benefit relative to the potential adverse events, we would see in the patients.
Thanks, George next question please.
Our next question comes from the line of solving Richter with Goldman Sachs. Your line is now open.
Good morning, Thanks for taking my question and nice updates this morning.
Clearly and that that.
Possibility that permanent J code now has.
The move to April and it shortens the runway for patient switching from Eylea ahead of potentially loss of exclusivity in may.
So kind of a two part question here.
And what are the dynamics around this and how do you on one hand kind of maintain and grow this switch population from Eylea, but secondly, how should we think about the uptake.
<unk> high dose eylea without a permanent J code.
No.
Hi, Celine so I'll get started is certainly we're conscious of the dates and the requirement for submissions to CMS did occur.
<unk> of a quarter, so we would estimate potentially the timeframe that you're referencing.
If we have an approval in the third quarter.
But I would say is that we anticipated use of <unk> eight milligram after approval and launch before we have the permanent J code.
Retina specialists are sophisticated in their reimbursement capabilities at the office level, they are experienced with newer products coming into the marketplace.
A fairly regular basis, and how to make certain that they validate reimbursement for products prior to having the permanent J code under a temporary J code. So obviously, we want to have the permanent J code that would be a positive, but certainly we do see the opportunity for uptake across patient types prior to that six.
Duration with CMS.
Okay. Thanks, Marion Shannon please move to the next questions.
Our next question comes from the line of parents Flynn with Morgan Stanley . Your line is now open.
Great. Thanks, so much for taking the question.
When I know we've talked about this before but the company has been somewhat non traditional on pricing decisions. Historically, you guys priced at a discount to Lucentis you worked with ice or on depicts and pricing. So just wondering why we shouldnt expect a similar approach here with with high dose Eylea. Thank you.
Thanks parents, if if your comments.
Referencing similar I mean thoughtful and appropriate.
We would agree.
Okay.
Next question please Sharon.
Our next question comes from the line of Brian Abrahams with RBC capital markets. Your line is now open.
Good morning, Thanks for taking my question and congrats on all the progress and I. Appreciate all the details maybe just another clarification on eight milligram if liver <unk>.
Can you characterize your level of confidence that a re inspection would not be required have you had any interactions or feedback with the agency around this and is there a defined period of time, where the FDA would need to week reinspection or not to ensure that the remediation are sustainable before approving the BLA.
Great. Thanks for your question, what we've tried to be.
1000% transparent as usual at Regeneron and this is really let me just see if I can summarize it again, what we know.
<unk> been in close contact with the FDA as catalyst, we know what the remediation required are and we've been submitting them on a rolling basis, we expect to submit the last requirement.
By the middle of August and that won't be several days before the <unk> date for the <unk> BLA. The SBA has been very clear that they will strive to expeditiously review that if they cant great. It can't they said there would be a three month clock extension, but even with that.
Three month clock extension, they've been very categorical and saying that they would prioritize our view and try and get it done as soon as possible.
Those facts of what led us to believe it would be done.
During the third quarter.
In all of it. This is the fact that there has been no need no discussion no indication whatsoever that a re inspection would be necessary.
Yesterday of course is free to make those decisions, but we have not seen any indication of that in our very detailed.
And close contact so we've given you our best estimate at this point, Thanks, Lynn, let's move to the next question. Please.
Our next question comes from the line of Chris Schott with Jpmorgan. Your line is now open.
Great. Thanks, so much guys to come back to the CD 28 P. SMA update maybe just elaborate a little bit more in terms of the approach of lowering the PD one exposure to address the safety issues here and taking that approach versus trying to work to further adjust the dosing of the bi specific piece of the equation. Thanks so much.
Well, we should say that we are adjusting both doses.
We have been already exploring.
A variety of doses from very low doses to the highest active doses on the coast inside but we've been doing all of them in the context of the full dose tire. So now what we're doing is we're exploring some of the doses that are active particularly ones that are active as monotherapy as I mentioned.
And there is monotherapy activity.
With the SMA costume and now.
We are to try to decrease these immune related adverse events. Let me remind you. They are in the same sort of class of immune related adverse event that you do see with checkpoint inhibitors in general we're just seeing them in some patients the one with the biggest responses in some cases to gray.
Other expense so we're hoping that lowering the checkpoint inhibition may allow us to adjust the therapeutic window, there, but we are as youre, saying dealing with a couple of different doses of the coast them, but now we're incorporating lower doses of the lip tile into the program as well.
I think what George said earlier, just maybe it bears repeating is that he said that we're starting with the good position of having very impressive efficacy one and two side effects that are for the most part in the patients who are benefiting with the efficacy.
That's a very good position to begin to explore and how to get the therapeutic index with signal to noise as George closet right, Okay, well, let's move to the next question Shannon.
Our next question comes from the line of Dane Leone with Raymond James Your line is now open.
Alright, Thank you for taking the questions congratulations on the updates and best of luck with the.
Resolution of of the reviews for both Allomap and eight Mega flavor soft I actually want to ask you to expand a bit on your discussions with the FDA and a potential filing early filing.
<unk> for COPD.
The point I'd like a little bit more clarity on specifically, what you may be able to have from notice before the final readout of that study that you could potentially include in a package with the board has resolved to.
You get the FDA comfortable with an accelerated review for that indication. Thank you.
Yeah, what we know right now is that we're going to need data from notice and right now as we said we are still in discussions on what that data could be and so right. Now we don't have any details to give you.
Okay. Thanks, George hopefully an update soon next quarter.
Our next question comes from the line of Colin Bristow with UBS. Your line is now open.
Hey, good morning, and congrats on the quarter and the progress.
Maybe one on the <unk>.
How can you have interim can you can you share anything on the futility threshold and if not specifically then could you say how do you sort of said relative to Boris thanks.
I don't think we have anything specific this was handled by the data safety monitoring committee set of a standard approach. We're pleased that we passed it.
And we will look forward to further data.
In this study and both we and Sanofi are blinded to that we only got the go decision from the independent data monitoring Committee.
So we will proceed to a final readout for both of those studies, let's go to the next question. Please.
Our next question comes from the line of Brian <unk> with Baird. Your line is now open.
Hey, this is Luke on for Brian . Thanks for taking the question can you just provide a little bit more color on what drove the lib tayo growth. This quarter was there any stocking or was it largely demand based things.
Thank you Luke and I'm pleased to share. It is demand growth certainly we see continued and steady performance across our skin indications, both cutaneous squamous cell carcinoma and basal cell carcinoma. In addition to that it is exciting that we are seeing not only an increase in the number of prescribers for our lung.
Cancer indications, but the depth of prescribing is improving and increasing in both the community and also the academic settings, but that that is demand based it is not stocking based.
I think Shannon, we have time for two more questions. Please.
Our next question comes from the line of David.
David Risinger with Leerink partners. Your line is now open.
Yes, thanks very much.
Excuse me.
My question is for George on the co Stims. Please.
You mentioned that you haven't seen the immune.
With respect to your other coast them trials could you please comment on whether the dosing step ups.
At this point.
<unk> are close to the higher dosing levels that you're stepping back from in the P. S. M. A trial I'm just trying to contextualize whether.
You really have advanced those other trials to the point to really know.
Whether youre going to have similar problems.
And your other coast in trials, thanks very much.
That's a very good and fair question and those programs are at earlier stages. So we won't know until we're more advance whether when we get to the same sort of efficacy type levels do we have the same sort of immune related adverse events associations or not what I was referring.
Two is in the preclinical studies the amount of this associated T.
T cell activation that can lead to these sorts of.
Immune related adverse events varies depending on the tumor class and on the coast in itself.
So based on that we would expect to see different ratios of immune related adverse events. Those other programs, though right now are all in.
Stages, where they are and with full dose <unk> tayo combinations at this point.
Okay. Thanks, Shannon, we have time for one more question.
Our last question is from <unk> <unk> with Jefferies. Your line is now open.
Hey, Frank.
Hey, thanks, so much.
I'll switch it up I guess, maybe for your obesity program you had data at the Ada showing synergy with your Myostatin inhibition program when combined with the G. L. P. One I guess the natural observation here is we're generally doesn't currently have a program in development is there any interest in acquiring one externally.
Via BD or partnership at this time.
Well, what we retain is we do think that.
Obviously, theres a lot of focus on obesity and particularly these new agents that are causing a large amount of weight loss, but as you described is being increasingly recognized that the quality of this weight loss may prove challenging that many patients are actually losing muscle or lean body mass.
Which is.
Can be very detrimental, particularly if they stay on these therapies are yoyo on and off them that can really lead to substantial changes overtime and body composition can be very debilitating for patients and as you said we've had.
<unk> investment in programs that can maintain muscle mass in various settings, and we've shown that they can maintain or even grow muscle mass in the setting of these types of obesity treatment in our preclinical modeling. So obviously it is a very exciting.
Opportunity to think about which is can we combine some of our muscle preservation or growth strategies and biologics.
To prevent these concerning side effects that are being seen with the new class of profound weight loss agents and so we are very actively pursuing everything that we can imagine and hopefully we'll be providing updates on our approaches as time goes along.
Alright, Thanks, George and thanks for everyone, who dialed in today and for your interest in Regeneron.
We apologize to those remaining in the queue that we did not have a chance to hear from as always the investor Relations team is available to answer any remaining questions. Thank you once again and have a great day.
This concludes today's conference call. Thank you for participating you may now disconnect.
Yeah.
Yeah.
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Yes.
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