Q3 2024 Regeneron Pharmaceuticals Inc Earnings Call
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Shannon: Good morning and welcome to the Regeneron Pharmaceuticals 3rd quarter 2024 earnings conference call. My name is Shannon and I will be operator for today's call. At this time, I'll participants on a list no.
Shannon: Later we will conduct a question and session. Please note that this conference call is being recorded. I will now turn the call over to Ryan Crowe, Senior Vice President of Vest Relations. You may begin.
Ryan Crowe: Thank you Shannon, good morning and good evening to everyone listening around the world. Thank you for your interest in regenerant and welcome to our third quarter of 2024 earnings conference call. In our kind of transcript of this call will be available on the regenerant investor relations website shortly after the call ends.
Ryan Crowe: Joining me on today is call, our Dr. Leonard Schleifer Board Co-Chair co-founder, President and Chief Executive Officer.
Ryan Crowe: Dr. George Yancopoulos, board co-chair, co-founder, president and chief scientific officer, Marion McCourt, Executive Vice President of Commercial, and Chris Fenimore, Senior Vice President and Chief Financial Officer.
Ryan Crowe: After our preparatory marks, remaining time will be available for your questions.
Ryan Crowe: I would like to remind you, very much made on today's call May include forward-looking statements about regeneran. Such statements may include, but are not limited to those related to regeneran and its products and business.
Ryan Crowe: Financial Forecast and Guidance Development Programs and Related Antisapated Milestones, Collaborations, Finances, Regulatory Matters, Payor Coverage and Reinvestment, Intellectual Property, Pending Litigation and other proceedings and Competition.
Ryan Crowe: 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.
Ryan Crowe: A more complete description of these and other material risks can be found in regenerant filings with the United States, securities and exchange commission, including its form 10 queue for the quarter-end of September 30th, 2024, which was filed with the SEC this morning.
Ryan Crowe: Regeneron does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events for otherwise.
Ryan Crowe: In addition, please note that Gap and NonGap financial measures will be discussed on today's call.
Ryan Crowe: Information regarding our use of non-gap financial measures and a reconciliation of those measures to gap is available in our quarterly results press release and our corporate presentation. Both of which can be accessed on the Regeneron Investor Relations website.
Speaker Change: Once our call concludes, Chris and the IAR team will be available to answer any further questions you may have. With that, let me turn the call over to our president and chief executive officer, Dr. Leonard Schleifer. Len.
Speaker Change: Thank you Ryan, and thanks to everyone for joining today's call. Return to Learn how to screw on a quarter, highlighted by 11% revenue growth and 8% non-gap earnings growth, along with continued investments and advances, of course, our broad pipeline.
Speaker Change: For my remarks today, I'd like to review some of our key performance drivers and then briefly discuss near-term pipeline opportunities.
Speaker Change: At the Marimoth George will provide further updates on our pipeline, Marion Wooden review our commercial performance and finally, Chris will detail our quarterly financial results.
Speaker Change: Third quarter, 2024 total revenues, grew 11% to 3.72 billion, primarily driven by higher scientific collaboration revenues, reflecting the continued strong performance of the victims.
Speaker Change: Continued growth for the tile and growth for combined Iliya HD and Iliya in the United States.
Speaker Change: Dupickson had another strong quarter with global revenues of 24% on a constant currency basis to 3.8 billion.
Speaker Change: With this latest quarterly result, global depictions revenues are analysing at over 15 billion with over 1 million patients currently on treatment around the world, because 7 approved indications.
Speaker Change: in Patience as young as six months.
Speaker Change: In September, the FDA and Chinese regulators both approved to pick sent for patients with uncontrolled COPD and an ESC Nefyllic phenotype.
Speaker Change: These approvals, along with the approval in Europe and June, enabled the pitch into address several hundred thousand patients that are currently uncontrolled on maximum inhaled triple therapy.
Speaker Change: As Marion will discuss early launch indicators have been positive with strong physician interest and initial favorable US payer coverage decisions.
Speaker Change: As we only approve by Elijah Focio PD, we anticipate these ongoing launches will represent a meaningful driver for the Pixons continued growth in 2025 and beyond.
Speaker Change: Let product sales fry for ILEAR HD and ILEAR combined were 1.54 billion up 3% compared to the prior year. ILEAR HD generated 392 million in its fourth full quarter on the U.S. market.
Speaker Change: I lead at HD and I lead, maintained anti-vage of category leadership with combined share of approximately 44% compared to 45% in the second quarter of 2024.
Speaker Change: As Marion will discuss, we have focused on increasing our leadership while preserving the share for our leader in an increasingly competitive category, including a near-term biocimilar and a free-recept 2-milogram launch.
Speaker Change: and the recent launch of a branded pre-filled syringe.
Speaker Change: The Aliah HD Clinical Profile continues to look differentiated, well in it to Ilea and other NIH-Bagine products.
Speaker Change: As George will soon detail, results from the recent reported photon expansion study in DME. Further on the squire, Leigh is at Leigh HD's unprecedented durability while achieving vision gains in the safety profile, typically seen with Eleigh.
Speaker Change: Moving to our pipeline, we're excited about several upcoming redouts later this year and in 2025 to further inform programs that could support significant long-term growth opportunities.
Speaker Change: By UN, we expect to share interim phase 2 lung cancer data for the combination of Fianlemab, our leg 3 antibody plus lib tile, as well as political content data for our factor 11 antibodies into our doses, both of which will inform our phase 3 plans.
Speaker Change: Looking ahead to 2025, we expect to read out the results of our pivotal, aerophy studies, what in a Pac-A-Man, our I-L 33 antibody, in former smokers with COPD.
Speaker Change: We will also learn more about potential opportunities to improve the quality of weight loss, you know, Beast Patients on semi-glutide by blocking my Extattin Endure Act in A.
Speaker Change: Pivotal data for the Fianlemabli Btyl combination in first-line metastatic melanoma are also anticipated which could support regulatory filings in this setting.
Speaker Change: In addition, we expect to provide periodic updates on our novel cheating approach for reversing severe food allergies involving limbo, cell-to-map, our BCMA by 3-3 bytes specific and depics it.
Speaker Change: In closing, our pipeline continues to generate innovative and differentiated opportunities, and now has approximately 40 programs in clinical development.
Speaker Change: Spanning many distinct therapeutic areas.
Speaker Change: We view our pipeline as the key to driving here, we need medium and long-term shareholder value
Speaker Change: and our antibody platform technologies and a general and genetic center database of over 2.5 million sequenced axomes linked to the de-identified health records, it expected to provide an enduring competitive advantage that we will continue to invest.
Speaker Change: With that, I'm now turning the call over George
George Yancopoulos: Thanks a lot. I'll start with Iliya H.C. and the data from the photon extension study in diabetic macular dima that were recently presented at the American Academy of Ophthalmology Annual Meeting.
George Yancopoulos: In addition to demonstrating that the vision gains in anatomic achievements or improvements, with ILEAR, ILEAR, ILEAR, the two years could be sustained over 30 year treatments, ILEAR, the results of the Extension Study provided the first aid of a patient who's switched for my LEAR to ILEAR HD.
George Yancopoulos: For these switch patients who are Dose for 88 weeks with a Lea, every 8 weeks following 5 initial loading doses
George Yancopoulos: Retinal Fluent, a re-accumulation was substantially slower after a single ELEA HD injection at week 96 as compared to these patients' previous ray of fluid accumulation with ELEA 3M.
George Yancopoulos: In addition, after one year of ILEA HD treatment, A3% of the switch patients had a last assigned dosing interval of at least 12 weeks.
George Yancopoulos: Reportly, Mean Visual and Anatomic Achievement Improvements of Chief with Elya, which sustained following the switch to longer-dosing intervals with Elya HD.
George Yancopoulos: For Faux-Ton, patients assigned to a Lea HD treat in groups at baseline. Visual games and anatomical improvements achieved in the first two years were also stained in three years. The many of these patients were able to minimally extend their dosing interval.
George Yancopoulos: At the end of three years of treatment nearly half were signed to final dosing interval of at least 20 weeks.
George Yancopoulos: In summary, I Lee-AHD achieved consistently longer dosing intervals, as well as notably slower fluid re-accumulation as compared to I Lee-A, a first for the category.
George Yancopoulos: When all other anti-digF agents were compared to our Leah and head to head studies, these agents did not demonstrate slow-fluid re-accumulation.
George Yancopoulos: The safety profile of a ADHD has continued to be cylinder tri-lifts in three years and remain because generally consistent with the known safety profile of a ADHD in its pivotal trials. All together these data support beliefs that our ADHD has a best in class profile.
George Yancopoulos: Now moving to DuPixer, which achieved several first and only clinical and regulatory milestones since our second quarter earnings call in early August.
George Yancopoulos: First, we are pleased to receive U.S. regulatory approvals of dupixon as an add-on maintenance treatment of adult patients with inadequate controlled COPD and the EAS in a select unit type, marking the first ever biological proof to treat this disease and represent.
George Yancopoulos: to fix in sex indications approved in the United States.
Speaker Change: Also in COPD, as Len mentioned, we're looking forward to pivotal results in the second half of next year for an Olympic command, or interlucing 33 antibody.
Speaker Change: It's approved in the United States, E.U. and Japan. It's a pick and may have could address approximately 1 million farmers, smokers, and COPD, regardless of the acid of the phenotypes.
Speaker Change: in terms of the tensile future indications for the two picks up.
Speaker Change: The phase of the adaptor island model to severe bulls, pungsicolikes, patients met the primary and all key secondary inputs.
Speaker Change: 5 times more to pick Stations, which she sustained in these rooms at 36 weeks compared to those on placebo. To pick Stations with follow us likely.
Speaker Change: and patience until see you both to relapse following Stuart and taper, where need rescue therapy during the treatment period.
Speaker Change: Based on the data, depiction is the first and only biologic to achieve significant improvements in disease remission and symptoms in both kinds of goatees. And it's the first mass into shell significance, steroid sparing in this disease.
Speaker Change: We anticipate this phase 3 jet trial was support regulatory approvals around the world with the US supplementary BLA submission expected by the end of the year.
Speaker Change: We also announced results of a second phase of study as depictions in biological naive patients with chronic spontaneous or carrier, or CSU, confirming results of a prior phase study in the same population.
Speaker Change: In this month's recent study, she moved to Texas, met the primary endpoint, and in addition resulted in a nearly 50% reduction in each and every carry activity's version baseline.
Speaker Change: with 30% of the deep deep deep deep centrifutations reporting a complete response or nowhere to carry it by week 24 compared to only 18% of those on placebo.
Speaker Change: These data along the day to generate in the first CSU study evaluating biologically native patients.
Speaker Change: Supported our supplementary BLA Resubmission earlier this month, and we look forward to a potential FD approval early next year.
Speaker Change: which would mark the first target therapy for CSU in a decade.
Speaker Change: [inaudible]
Speaker Change: The moving to oncology, starting with Leaptile, who's providing the best in-class foundations for combinations with our other oncology assets.
Speaker Change: At the World Conference on lung cancer, we announced five years out from the final pre-specified overall survival analysis of the phase 3 and power lung one trial, which evaluate the tire monotherapy as a first-line treatment for adults is advanced non-smocile lung cancer, with more than 50% pdr one expression.
Speaker Change: The late breaking data showed that at five years of time on a therapy nearly doubled, needing over all survival and reduced the risks of death by 41% compared to chemotherapy.
Speaker Change: The world's only safety system to preserve their five years of man-girl's patience.
Speaker Change: You five-year-old comes data in advance, now, small cell lung cancer, compared a fairly close trial to either other PD1 or PDL1 antibodies and further support of child physician as the anti-PD1 backbone for regenerative ongoing oncology efforts.
Speaker Change: Moving on to one such left-eye combination. At the recent Esmomini, we presented updated results of Dallas and Seattle map, Alex and everybody in combination with Lechand with Lechand, in a dealt with a dance no-no, across the re-independent expansion cohorts of our first human multicolored tribe.
Speaker Change: With longer follow-up, these ladies and gentlemen, we'll show you the assistant and do print your new sponsors across all cohorts.
Speaker Change: in the post-hawks tools and analysis.
Speaker Change: 50%, 57% of patients responded with 25% of these patients achieving a complete response.
Speaker Change: Media and Progression Fniservable is 24 months.
Speaker Change: Media in OS was not reaching any of the individual co-varser when the results were pulled. These Fianna land-laptive Poofococic data showed nearly doubled the complete response rate with more than five times greater media in PFF than previously reported for anti-PD1 monotherapies.
Speaker Change: The FNL Medlital Camelation, also showed the bus clinic at the Green Sup Populations.
Speaker Change: with their was currently no established standard of care, such as impatience, pre-missive tunes, the anti-PD1 therapy in the adjuvant or neo-agent setting. Of the searching patients in this subgroup, six patients, or 46%, respond to the therapy.
Speaker Change: Among patients receiving any adjuvant or new age of interest, stomach therapy, 11 of 23 or 48% response of the therapy, including six complete responses.
Speaker Change: The safety profile of the animal member of Tyler combination was generally consistent with the safety profile of the tile monotherapy and other anti-pity one agents, except for higher rates of treatment related adrenalin deficiency.
Speaker Change: Ever since the exciting early day with individual checkpoint in the aburs were presented more than a decade ago, it's been widely hypothesized that combining multiple classes of checkpoint in the aburs, my meaningful hands anti-tune activity without exacerbating safety issues. The progress of date has been broadly disappointed.
Speaker Change: We believe the results generated so far in advance, no number for Landland, Fianlem Abon of Typhus, suggests it might be the first checkpoint in hybrid accommodation to demonstrate meaningful, as if clinical benefits without significantly exacerbating safety.
Speaker Change: All right, I'm going to randomized phase 3 trial of the NLMA and Moon with Tuyvers' cumboleism and monotherapy, and previously treated, underselectable, locally advanced or metastatic monoma is ongoing with pivotal data expected to read out next year.
Speaker Change: In addition to Malonell, we're exploring this combination of a variety of other cancer settings that has historically been responsive to anti-PD1 therapy, including lung cancer, initial phase 2 data for which are expected to read out by the end of this year.
Speaker Change: Next.
Speaker Change: To our bi-sensifix for Human Technology on College, we are pleased that the European Commission of Food are just below an hour or your next demand, or CD-20 by CD-3 by specific, for real after factory, for liquid and foam, and diffuse large piece of salons on them, marking the first regulatory approval from my bi-sensifix again by a platform.
Speaker Change: We continue to work on enrollment of our confirmed terrorist support, resubmission of our BLA for the Licolent Lundzama, which we now expect to achieve in the first half of 2025.
Speaker Change: So let's go south of May, our DCNA by series of advice and suggestions for my long life.
Speaker Change: Data from the ongoing linker, MM1 study in patients who relax, refractory multiple myeloma, continue to mature with responses continuing to do.
Speaker Change: Recall 14 months of meeting on follow up among 113 patients.
Speaker Change: Live on sentiment continues to demonstrate a potentially best in class profile in terms of efficacy, safety, dosing, as well as hospitalization burden. With 71% of patients with sponty therapy and 50% achieving a complete response of better.
Speaker Change: For perhaps most of your friends you're in about a clinical development program for both or your next and end-level self-demand.
Speaker Change: In earlier line settings, is a plan to evaluate each agent as minor therapy as well as in limited combination.
Speaker Change: Well, competing C-20 by specifics are varying combinations with minimum limits.
Speaker Change: Portland, Luminment, Plus Retoxin App in first line for liquid and foam of regards to tumor burden. Our phase 3 Olympia 1 study is a very urgent, urgent, and a monotherapy compared to our child.
Speaker Change: Simuline, first-time multiple mile alma, are ongoing phase 1 to Lincoln and then 4 study is the value of the new Southamette Monotherapy.
Speaker Change: Furthermore, we're all conducting phase two studies for liberal self-demand monotherapy in precursor conditions, such as smoldering myeloma and monochrome, gamma, the abondetermined significance of amgas, an intented prevent progression to myelod.
Speaker Change: Now to our non-uncology, he metiles you pipeline, starting with our SuFi program.
Speaker Change: which is the first combination of an antibody in SIRNA that's hard to do the same protein.
Speaker Change: Weeks back to present updated results for one potential indication, Tyler Cismill, Lieutenant Himo, Libyanuria, later this year, and expect to read out Pizzle results in generalizing my senior grabs in the second half of next year.
Speaker Change: We also initiated our Phase Re-Program and Geographic Activity and Dry-Azulated Maca-Jergeny and to Generation with initial patients screening now underway. We believe that our systemic approach has several significant advantages over currently approved agents.
Speaker Change: First, it may avoid the risk of rare but severe inflammation, irreversible vision loss that has been observed with currently approved individual treatments. In our systemic approaches to potential to allow for convenient treatment of bilateral disease as well.
Speaker Change: Regarding our fact of 11-in-body, we remain on track to report top-line results by year-end of our proof of concept studies for a two-domain targeting and our catalytic domain targeting antibodies. In the setting of prevention of being a strungal embolism following new placement surgery.
Speaker Change: He's also these studies were informed whether they were perceived to registration in enabling studies with one or both of these antibodies With the possibility that both the antibodies were advanced to phase three, but in different wrong-buses indications or in different populations
Speaker Change: In summary, we continue to drive forward our innovative development pipeline. In anticipate, reading at several pivotal and crucial concepts, data sets and oncology, immunology, obesity, and metology, and genetic medicines over the next 12 to 18 months.
Speaker Change: Well early research engine has never been more productive with multiple novel programs potentially advancing into the clinic over the same time frame.
Speaker Change: and with that I will turn the call over to Manik.
Manik: Thank you, George. Our third quarter performed demonstrates through General's ongoing leadership across their AP2 categories.
Manik: We continue to advance the strength and diversity of our product portfolio and as George described, our pipeline is advancing with several potential regulatory findings and approvals on the horizon, creating both near and longer-term opportunities.
Manik: I'll begin with Ilya H.D. and Ilya in the third quarter combined US net sales were 1.54 billion, a 3% year for your increase.
Manik: I lead at each D and I lead in net sales, refavorably impacted by approximately $40 million.
Manik: as a result of a higher, cool, stellar inventory levels for a lead HD at the end of the third quarter, partially offset by lower inventory levels.
Manik: for Iliya.
Manik: As a result, we expect fourth quarter of the ELEA HD net sales to be negatively impacted as this increase in wholesaler inventory is absorbed.
Manik: Together, Iliya HD and Iliya captured 44% of the total anti-vegette category in the third quarter demonstrating retina specialist experience and confidence in both brands.
Manik: I lead HD Net Sales Group 29% sequentially in the quarter to 392 million driven by ongoing adoption across treatment experienced and treatment naive patients. As treatments.
Manik: Experience Grows, written a specialist supporting to unleash these durability, coupled with its efficacy and safety as important clinical differentiators.
Manik: Recent late breaking data presented at the American Academy of Optimologies Annual Meeting, highlighted Iliya H.D.'s potential best in class profile.
Speaker Change: as George highlighted diabetic macular demotions who switch to a lead HD consistently achieved longer dressing intervals and slower retinal fluid re-accumulation.
Speaker Change: While we anticipate the energy that just category continue to be highly competitive with both branded and buy a similar products in the marketplace.
Speaker Change: We plan to further strengthen the ILEHD product profile through the anticipated launch of our differentiated pre-sale syringe by mid-2025 and a potential approval for the RVO indication which is registration enabling data.
Speaker Change: are expected by the end of this year.
Speaker Change: In the first year since launch, positive physician and patient experience has propelled ILE HD to achieve billion dollar brand status. With additional growth catalysts expected in 2025, our team is just unhelping even more patients benefit from ILE HD.
Speaker Change: Turning to Lebtio, we can need to make significant progress in the third quarter, with global med sales increasing 24% year over year on a constant currency basis to 289 million.
Speaker Change: and the US net sales group, 35% or 195 million, and non-millanoma skin cancer, are worked to expand the immunotherapy market has resulted in an even greater number of lip tido patients.
Speaker Change: and then Longtownshire we continue to gain market share.
Speaker Change: Outside the US, Met sales were 94 million, which does not include 20 million in distributor purchases that shifted to the fourth quarter.
Speaker Change: We continued to see opportunities to increase Leptio demand in 2025, with new launches and several markets.
Speaker Change: and finally to the picks up which continues to remarkable growth trajectory in addition to the positive data readouts and regulatory updates in George mentioned.
Speaker Change: We've reached an impressive milestone.
Speaker Change: Dupixon has now surpassed one million patients on therapy across seven indications worldwide. In the quarter, Dupixon achieved global met sales of 3.8 billion, a 24% year-over-year increase on a constant currency basis, driven by uptake across all indications, age groups and geographies.
Speaker Change: In the US, net sales through 19% your review to 2.8 billion and to take sink continues to be the number one prescribed by a logic for new to ram patients in all of its approved indications.
Speaker Change: It's widely recognized by prescribers that depicts his differential dual mechanism of action, targeting I-O-4 and I-O-13, addresses the underlying cause of these type two diseases. Demand is strong across the blockbuster indications of a topic dermatitis as met in nasal polyps.
Speaker Change: and there is opportunity for ongoing market penetration based on unmet patient needs.
Speaker Change: Uptake is also increasing across our recent US launches. New to brand prescriptions for a pride in Agilars are up approximately 30% compared to the prior year. And EOE, New to Brand prescriptions, including the pediatric indication are up approximately 40%.
Speaker Change: In September, Dittickson's label was expanded to include patients as young as 12 years of age who have in-clad in adequately controlled chronic rhinoconus on your side is with nasal polyps and we estimate approximately 9,000 additional U.S. patients can now benefit from Dittickson.
Speaker Change: and Reese's Months to Pixen has been approved to treat CRPD in more than 30 countries.
Speaker Change: We are excited about the opportunity to extend a picture of the leadership in respiratory care, which we estimate made benefit more than 300,000 patients in the U.S. alone with inadequate we controlled COPD and an eSymethylic phenotype.
Speaker Change: and the first weeks of the US launch, we've been encouraged by the enthusiasm from physicians and patients for depicts an as a treatment option in this underserved population.
Speaker Change: Education efforts are underway to highlight the importance of type 2 information in COPD, supporting patient identification by prescribers and motivating patients to speak with their physician about the picks up.
Speaker Change: We've made significant progress in securing access and reimbursement for patients, many of whom are covered under Medicare. With the PICSense Unique Clinical Profile and First Biologic to Market Advantage, we anticipate the COPD indication we'll drive meaningful growth for the PICSense.
Speaker Change: and summary to pick some continues to transform standards of care and lives of patients worldwide.
Speaker Change: In addition to current approvals, we look forward to future potential launches and diseases, including COPD and Japan Pediatric EOE in the EU and chronic spontaneous or to current and US, as well as global regulatory filings for a balanced Pennsylvania.
Speaker Change: In conclusion, our commercial team continues to deliver on our goal to provide regenerative medicines to an ever-expanding number of patients worldwide. They're significant growth potential within the current and future indications of our medicines, and our pipeline provides meaningful opportunities for growth. With that, I'll turn the call over to Chris.
Chris Fenimore: Thank you, Marion. My comments today on Regenerance Financial Results and Outlook will be on a non-Gap-Pace of Sonlough unless otherwise noted.
Chris Fenimore: Regener on delivered strong financial performance in the third quarter with continued execution driving top and bottom line growth.
Chris Fenimore: Total revenues increased to 11% year over year to 3.7 billion. Primarily driven by higher-sandvy collaboration revenue, continue growth for LibTio, and US growth of total Iliya HD and Iliya.
Chris Fenimore: Third quarter net income for sure, do 8% from the prior year to $12.46 on net income of $1.5 billion.
Chris Fenimore: Third corner revenues from our Santa Fe Collaboration were 1.3 billion, inclusive of 1.1 billion related to our share of collaboration profits.
Chris Fenimore: Regener on share of profits through 26% versus the prior year, driven by volume growth for deep-tixen and improving collaboration margins with collaboration profitability reaching another all-time high in the third quarter.
Chris Fenimore: The Sanity Development Balance was approximately 1.8 billion at the end of the third quarter, reflecting a reduction of approximately 200 million from the end of the second quarter and approximately 520 million from the end of 2023.
Chris Fenimore: Loving the fire.
Chris Fenimore: Third quarter, XUS Netcales of Ilya and Ilya Eightmig were 932 million up 9% on a constant currency basis versus the prior year. Total buyer collaboration revenue was 391 million of which 368 million related to our share of net profits outside the US.
Chris Fenimore: We recorded 35 million of sales for Inmiseb, our antibody cocktail for Ebola and the third quarter related to deliveries to the US government under our existing agreement. We still expect 24 Inmiseb sales to be inline with 23 sales of approximately 70 million.
Chris Fenimore: Other revenue in the third quarter was 114 million. We expect other revenue will increase the quenchily in the fourth quarter of 2024, but on a full year basis is expected to be lower than 2023.
Chris Fenimore: Now to our opportunity expenses.
Chris Fenimore: R&D expenses 1.1 doing in the third quarter. The increase in R&D expense versus the prior year was sure and by ongoing investments in our pipeline, including Lake Stage and College programs and increased clinical manufacturing costs to support ongoing programs.
Chris Fenimore: SGNA grew 15% from the prior year to 613 million in the third quarter, primarily reflecting ongoing investment to support the launch of Iliya HD.
Chris Fenimore: Third quarter of 2024, grows margin on net product sales to climb to 89% compared to 90% in the prior year, primarily reflecting higher start-up costs for our Phil Finish Manufacturing facility.
Chris Fenimore: Now to cash flow on the balance sheet.
Chris Fenimore: Regener on Generated Approximately 2.6 billion and free cash flow through the first nine months of 2024 and end of the quarter of cash in marketable securities, less debt of approximately 15.6 billion.
Chris Fenimore: Through the first nine months of 2024, we have repurchased over 1.6 billion of our shares.
Chris Fenimore: including 738 million in the third quarter. Given our long-term growth potential, we continue to see Sherry purchases as an efficient use of capital and had approximately 2.9 billion available for repurchases as of the end of the third quarter.
Chris Fenimore: Finally.
Chris Fenimore: We've made some minor changes to our full year 2024 financial guidance based on our year-to-date results, narrowing ranges across most guidance items.
Chris Fenimore: A complete summary of our latest, full year 2024 guidance is available in our press release issued earlier this morning.
Chris Fenimore: In summary, Regeneron delivered strong financial results in the third quarter and our focused events investments continue to position us to drive long-term growth. With that, I'll pass the call back to Ryan.
Ryan Crowe: Thank you, Chris. This concludes our preparatory marks. We will now open the call for Q&A. To ensure we are able to address as many questions as possible, we will answer one question from each caller before moving to the next.
Ryan Crowe: Shannon, please go to our first question.
Speaker Change: Thank you to ask a question please for Star R1 wanting a tove on a way for your name to be announced.
Speaker Change: To withdraw your question, please press star one more again. As a reminder, we ask that you please limit yourself to one question.
Speaker Change: Our first question comes from the line of Chris Shot with James Morgan, you'll let us know.
Speaker Change: Hi, this is Taylor Hamley on Chris Shaw. We just have a question on Ilya, so with Amgen launching their biosomor, how are you thinking about Ilya going forward?
Speaker Change: What levels can you pull to potentially accelerate conversion to Hydo-Sylia and how are you thinking about prices for the franchise more broadly? Thank you.
Speaker Change: So, Marion McCourt has some extra.
Speaker Change: Comments on that, but look, I think it is a fantastic product.
Speaker Change: We have delivered probably somewhere's neighborhood around 100 million or more injections with Ilias And so the performance
Speaker Change: and Safety of the product.
Speaker Change: our transparency with...
Speaker Change: Safety of...
Speaker Change: Issues that may arise over the past decade. I think it's a different physicians in their patients. A lot of comfort with Ilya and you see some speaking of that product.
Speaker Change: Nonetheless, we think that Pilea HD is a differentiated product and we are continuing to work on using the standard approaches of education and informing the doctors about it.
Speaker Change: the Petra Use in Patients.
Speaker Change: providing them with more data, it's George referred to some of the long term data that is rather striking. We know that there is a biosummer in the market for ILEA, not for ILEA HD and we know it will be competitors but we think we'll be able to compete well.
Speaker Change: Okay, next question, please Shannon.
Shannon: Our next question comes from the line of Evan Seagerman with BMO Capital Markets. Here line is open.
Speaker Change: Evan, we're not here you.
Speaker Change: and the other.
Speaker Change: and your life's open place, check in your button.
Speaker Change: People will come back to Evan, China, why don't we go to the next.
Speaker Change: Our next question comes from the line of Tyler Buren with TD Cowan. Your line is no open.
Tyler Buren: Hey guys, good morning, congrats on the quarterly results and all the progress.
Tyler Buren: Can you reiterate your confidence in Iliya HD quarter over quarter growth going in the Q4, despite the negative impact due to wholesaler in the TOR8?
Tyler Buren: and are you seeing a tailwind with the overall franchise yet to do the removal of product from a major supplier of a vast end?
Speaker Change: So let me take both of those Tyler first as I describe to you the performance in the quarter show growth for Ilya and Ilya HD and then more specifically to your comment related to Ilya HD we have very strong confidence in the products profile, the interest of the retina community, the quality of our safety, clinical data durability are all being seen.
Speaker Change: But I did want to call out that we did see an inventory.
Speaker Change: Mattertake Place in the quarter that I wanted to comment on. We're not going to give a fourth quarter guidance, but specifically I wanted to be the awareness related to the favorable impact of approximately $40 million as a result of higher full-seller inventory levels for a Leigh HD. At the end of this third quarter.
Speaker Change: Parsley Offset by Kulseller and Torrey levels that were lower on IEDA. So we wanted to share that information, but certainly we have every confidence in IEDA HD performance, but that inventory obviously will be used in the fourth quarter of this year.
Speaker Change: Looking forward Tyler to next year I think Marion mentioned that bringing our pre-films to win to market around the middle of the year I think will be a nice catalyst for acceleration. I think that...
Speaker Change: We've taken a lot of pain.
Speaker Change: to make sure that when we bring something to the market, it's gonna withstand.
Speaker Change: the test of millions and millions of injections.
Speaker Change: Competition May Broad Something Fourth.
Speaker Change: and that for example, needs a first needle because they must be trying to filter something out, which resume we are hoping to not have to have that issue and we are looking very carefully to make sure that we bring something that really will not result in information.
Speaker Change: Remember that in this marketplace, products have been really killed. If you have too much information, which leads to potential for retinal basculitis and even a inclusive retinal basculitis with more supervision.
Speaker Change: So we are very sensitive to all that I think doctors will be sensitive to that with any new launch despite biocimulus. They're going to probably want to look carefully and they know I lay it. And I lay it is something I think they can trust in.
Speaker Change: So we will be methodical about how we do this and we're in this for the long game.
Speaker Change: Tyler, I also wanted to cover your question related to Pine and their coming away from support of Avastin in the marketplace.
Speaker Change: So we're very well aware of that and certainly our teams are actively involved in retina offices, supporting staff and working with them on any challenges that present. I would share that at this point there still is a vast inventory from Pine in the market. I think it's anticipated to run out within a couple of weeks. So we haven't seen a material uptake in ILEA HD or ILEA related to that yet, but we're staying very close to that situation and support to our customers.
Speaker Change: Thank you. Next question please, Shannon.
Speaker Change: Our next question comes from the line of Brian Abrahams with RBC Capital Markets. Your line is now open.
Speaker Change: Thank you for watching. We'll see you next time.
Brian Abrahams: Hi there, good morning. Thanks for taking my question. On the HD pre-filled syringe, can you talk about the potential inflection in use that that could catalyze next year, including how the differentiation of that pre-filled syringe may resonate, and maybe also elaborate on some of the gating factors to development there? Timelines sound like they've been pushed out a little bit. Thanks.
Speaker Change: Yeah, as I said, we anticipate bringing that to the market.
Speaker Change: to the market with ILEA HD.
Speaker Change: outside of the United States, so we have a high degree of confidence.
Speaker Change: There are some additional requirements that you have to do inside the United States.
Speaker Change: which we're working through, and as I said, we think we'll have a differentiated...
Speaker Change: product opportunity there so you're right Brian and it's possible that there could be an inflection when that comes to market because there is a preference for the pre-filled syringe.
Speaker Change: Thank you.
Speaker Change: Okay, thank you. Next question, please.
Speaker Change: Our next question comes from the line of Carter Gould with Barclays. Your line is now open.
Carter Gould: Good morning. Thanks for taking the question. Maybe for Len and Chris, just now in the wake of Amgen potentially being on the market, has it driven any sort of
Carter Gould: change in sort of conceptually how you're thinking about the pace of R&D investment going forward or your capital allocation priorities. You're potentially leaning into buybacks or further ruling out or delaying a potential dividend. Any color in the front would be helpful.
Speaker Change: Thank you. Thank you.
Speaker Change: Well, we're, you know, they say imitation is the best form of flattery, so we're...
Speaker Change: I'm glad to be flattered by Amgen that they're spending their time imitating our products. We're spending our money trying to bring new products to market, which where we think is what this industry really is built for. It's really not built, biosimilars are fine, but we think the industry is best built and Regeneron is best built.
Speaker Change: to bring innovative products to market. As I mentioned, we have over 40 products in clinical development, many of which are in phase three. As George detailed, there are a lot of exciting programs in there with lots of data readouts. We're not going to gate spending.
Speaker Change: based upon a biosimilar entry, we're going to spend what's appropriate.
Speaker Change: based upon the opportunities that we see.
Speaker Change: We have a strong balance sheet, we have good earnings, we have the capability to make significant investments, and George has built, I think, the most prolific research and development organization in the industry.
Speaker Change: So, it would be foolhardy not to invest in that, and you'll probably...
Speaker Change: see some investments to go up.
Speaker Change: The big question in this game always is...
Speaker Change: Will these investments pay off?
Speaker Change: George and gang have brought to market is a good Harbinger of things to come and as I said with more than 40 things in development. We couldn't be more excited about our future product profiles
Speaker Change: Thanks, Lynn. Next question, please, Shannon.
Speaker Change: Our next question comes from the line of Terrence Flynn with Morgan Stanley, your line is now open.
Terrence Flynn: Great. Thanks for taking the question. I know you have some upcoming Factor XI readouts here before the end of the year. Maybe you could just tell us what you're looking for to make the decision about whether to advance those into a Phase III program.
Terrence Flynn: how you're considering, you know, them versus each other and also versus the standard of care. Thank you.
Terrence Flynn: Hey, yeah.
Terrence Flynn: This is George. We're very excited about our Factor XI program because we think it's very different from anything else that's out there. We chose to take a different approach where we attacked Factor XI in two different ways, what we call our A2 domain antibody, our catalytic domain antibody.
Terrence Flynn: Our A2 domain antibody is not a complete blocker of Factor XI, it actually is more like a complete Factor XII blocker.
Terrence Flynn: It's expected to not have as profound effect on the coagulation pathways, but to have a much
Terrence Flynn: milder safety profile.
Terrence Flynn: In contrast, we believe that our catalytic domain antibody is the best-in-class blocker of factor XI. It will come with the best ability to control coagulation among all agents that are
Terrence Flynn: attacking this pathway, but of course it will also have, presumably, a higher safety load than our A2 domain end bite.
Terrence Flynn: So, we think it's very exciting to have these two parallel but very distinguished approaches.
Terrence Flynn: We actually hope to be able to show that both of these substantially control thromboformation in the clinical trials that we now have running. And we hope to then...
Terrence Flynn: in the future decide based on how well they each control and their expected safety profiles, we expect the ability to consider multiple indications that we can evaluate each one for.
Terrence Flynn: different potential indications for one versus the other. So these are sort of a pipeline in and of themselves able to attack, we believe, a variety of different coagulation.
Terrence Flynn: settings, and each one of them can be used differentially and provide a different profile of efficacy versus safety as might be needed in the different clinical settings.
Speaker Change: Thank you, George. One second, I just wanted to add to that, um, you know,
Speaker Change: What George has taught me over the years is that not all antibodies are created equal.
Speaker Change: And I would not, and not all blockers of a pathway are created equal.
Speaker Change: And we have in-house pharmacodynamic data which suggests that the antibodies that Regeneron has created and selected —we really have a competitive advantage in how we do that— outperform other factor XI antibodies or small-molecule competitors.
Of course, with the small molecule competitors, it's hard to get to the high dose because you have off-target...
Speaker Change: problems and with the antibodies, people can't always get the best antibodies. We think we have the technology and these things are not all created equal. So the proof of the pudding will be in the eating when we get the data and see how that performs.
Speaker Change: Okay, thank you. Next question, please.
Speaker Change: Our next question comes from the line of Chris Raymond with Piper Sandler. Your line is now open.
Chris Raymond: Thank you. Maybe just a follow-up on the Avastin supply issue with Pine and potentially others exiting the market. Maybe just stepping back, you know, compounded Avastin has seen supply and quality issues before.
Do you see this episode as different from prior disruptions? We had a KOL tell us that he believes this marks sort of the beginning of the end for Avastin. I'd love to hear your thoughts on that. And maybe as a follow-up,
Chris Raymond: If a vaccine is likely to play less of a role here, does this not provide more of an opening for a biosimilar option?
last year around this time the same thing occurred.
offices and practices are getting used to how to deal with the situation and obviously the confidence in the Bastin you know goes down and this applies so you know certainly it's important and I see I think the evolution that you're hearing is
because it's a situation that has been dealt with before.
Speaker Change: You know, we certainly want physicians to have choice in describing the anti-VEGF category product brand that they think is best for their patients. And certainly I think it is a competitive marketplace.
As we show in growth of our franchise this quarter, we did last quarter as well, and we certainly think that both ILEA HD and ILEA are both positioned very well in this competitive marketplace.
Speaker Change: Thanks, Marion. Shannon, next question, please.
Our next question comes from the line of Salveen Richter with Goldman Sachs. Your line is now open.
Salveen Richter: Thank you, good morning. Can you just elaborate on the drivers for the pricing pressure noted for ILEA HD and and whether these pressures are going to be ongoing on the forward and just in that context.
Speaker Change: maybe discuss kind of your outlook for overall growth of the branded anti-VEGF market in the context of the biosimilars. Thank you.
Speaker Change: Thank you.
So, you know, as we reflect on anti-DHF category pricing pressure, that is something, Salveen, that has an impact.
on all products in the category, branded products, biosimilar products as well. And it's not inconsistent with other competitive categories. What's really important to note, though, is what often prevails.
is the product that physicians most often want to prescribe, meaning what has been their experience.
you know, what is the safety profile of the product, what is the efficacy, and now in the case of bringing ILEA HD to the marketplace, the durability. So we think those factors are very, very important and allow us to compete successfully in the anti-VEGF category. As to overall category growth,
Speaker Change: Thank you.
Speaker Change: I would say that it's probably roughly in, and this is overall, not just branded, it's roughly in the mid single-digit range.
And then coming back again, just to say a little bit more about pricing pressure, obviously that's something that's been more apparent for ILEA and probably the product now having been on the marketplace for, you know, over a decade is understandable. The differentiation for ILEA HD is the clinical profile, the product that is giving physicians the opportunity not only for the confidence in clinical aspects, results, and safety as they have with ILEA, but also now this really demonstrated durability that we're seeing more and more of, and obviously our clinical data is supporting in the longer term as well.
Speaker Change: Thank you for watching. Please subscribe. And please leave a comment. I'd love to hear from you.
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Okay, thank you. Let's move to the 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.
I just want to understand how...
How high dose are the uptakes so far is tracking versus your own internal expectations, given that I mean, it seems like about 25% conversion has happened yet, at this point, and at the same time, compared to abysmal has been going really rapidly. So just trying to understand what are the dynamics that we need to look at here. And if there are any levers you can pull going forward to help increase uptakes.
So, Moet, to answer your question, obviously we don't give specific guidance on...
Speaker Change: on conversion or the size of the market. But we do talk about what we think the catalyst can be.
and I do feel that
Speaker Change: You know, we have a bunch of catalysts next year, potential approval.
and Data for RVO, more importantly perhaps the pre-filled syringe by mid-year. So I think that next year we could see a little bit of an acceleration. Obviously we're working very hard, it's a great product, but there are, you know, these things don't happen overnight because people do love ILEA and it is more sticky than one might have anticipated, but I think the progress is solid and we expect it to keep going.
Speaker Change: Thank you. Have a great day.
Speaker Change: Okay, let's move to the next question, please, Shannon.
Speaker Change: Our next question comes from the line of Truong Huyen with UBS. Your line is now open.
Hi, good morning. This is Kim Fochong from UBS and thanks for taking our question. So we want to switch gears to the obesity program.
Speaker Change: and about the ongoing travel group math, plus Gary Toth's math, and GLEAP-1, the study. It seems like you recently increased the trial size.
from 620 o'clock to near a thousand with green new arms added.
Speaker Change: And now the study has a total of 13 investigational arms. It does seem like you want a really comprehensive truth here. Could you provide more granularity, why the protocol changes here are necessary, and why would you like to further expand the trial? Thank you.
Can we have somebody repeat that question because I really couldn't understand it at all.
Oh, definitely. Yeah, just the ongoing fits to obesity study of travel group map plus Geertz's map.
Speaker Change: and without BLEEP-1. So you recently increased the trial size to near 1,000. Previously, I think it was 620 plus. You also added three new arms. So why do you think those protocol changes are necessary and why would you like to further expand the trial? Thank you.
Yeah, I think what you're probably referring to is that we added additional dosing arms in our trial to expand different, to explore different doses of the hopefully muscle enhancing treatments.
And that's the major reason that the trial was enlarged, so that we would have broader information on different doses and their effects on muscle preservation.
And just remember, we didn't see any, in the Healthy Volunteers study, we were able to do that because we didn't see any new safety signals.
I think it's just a matter of exploring additional doses. We're trying to find the right mix of antibodies with semaglutide to maximize the quality of the weight loss. Let's move to the next question, please.
Our next question comes from the line of Evan Segerman with BMO Capital Markets. Your line is now open.
Hi guys, thanks for taking my questions. Sorry about the earlier mishap. Just a follow-up on obesity, you know I know George you've spoken a lot about the really need for quality of weight loss and I think that's very important Maybe talk to the regulatory environment for muscle preservation or muscle building assets You know, I know FDA has been kind of hesitant there and you know, they're really focused on weight loss But maybe how to talk about how you hope this will evolve in the coming years. Thank you
George Yancopoulos: Yeah, I guess what you're referring to is, obviously, we all know and it's been widely noted and acknowledged that in the setting of the very rapid weight loss that can be caused by these GLP-related agents,
George Yancopoulos: You get significant
lean body and muscle loss up to 30-40% of the weight loss.
especially because most of these patients actually go off these treatments and then often cycle. This can actually lead to cumulative loss of muscle over time which can actually be quite catastrophic. We may be creating
George Yancopoulos: The agents, because they are promoting muscle, remember muscle is the major, non-essential spender of energy that is renowned for its ability to expend energy.
We've seen in the animal models that it can also cause Our approaches when you maintain muscle you're increasing the metabolic rate
George Yancopoulos: So, you're actually expending more calories, so you actually can lose more weight while you're gaining the muscle or preserving the muscle because the muscle itself is eating up the calories or using up the calories.
George Yancopoulos: So, the easiest regulatory path will be if our approaches, as has been seen in the preclinical studies, actually result in more weight loss.
But a better composition of that weight loss so that one won't even have to actually Rely on a muscle regulatory endpoint just on the increased weight loss itself
George Yancopoulos: Of course, one will then hopefully be able to describe, and this is all part of ongoing discussions
George Yancopoulos: with regulatory agencies that not only might you be seeing increased weight loss
George Yancopoulos: but the body composition results will be better.
George Yancopoulos: So, the simplest regulatory path will be just by increasing the actual weight loss.
And then you'll be able to show secondary endpoints that you're doing better on composition of the weight loss as well.
That said, we are going to be measuring metabolic parameters.
And we're also going to be measuring functional outputs as well. And those are, of course, regulatory paths as well that will be more complicated and probably require a larger and longer study than just the weight loss.
studies themselves.
So, of course, we expect to be improving metabolic...
endpoints. We expect to be improving functional endpoints.
whether we're going to be needing those as exploratory or descriptive endpoints.
or whether we're going to end up relying on them for approval remains an open story. But the goal, of course, is to show these benefits in the setting of maintenance of the muscle while maintaining or actually getting greater weight loss.
I should also point out that in our pipeline, we have a variety of what we call unimolecular solutions.
A whole series of molecules that have the ability, all within the same molecule.
to do all of these things. And obviously, those will all have their own and different regulatory paths, some of which might be much more expedient in terms of what endpoints you can use for approval and so forth.
Thanks, George. Let's move to the next question, Shannon.
Shannon: Our next question comes from the line of David Reisinger with Lee Rink Partners. Your line is now open.
Yes, thanks very much. So I have, I'll just keep it to one question, please, regarding next-gen product development. So clearly Regeneron was extremely successful in creating ILEA HD. Could you talk about
your efforts to develop a next-gen Dupixent, including whether it would be you know, a less frequently administered product. Thanks very much.
All we can say is that we are constantly working on both improving
Speaker Change: approaches for something where we already have important products such as in the depicts in class, as well as coming up with.
Entirely new and different products and approaches as well. And as you might imagine, as we delivered with HD, I mean, this is what we're trying to do all the time. We're trying to improve the current approaches, but we're also trying to come up with entirely different next-gen approaches as well. That's what we do here at Regeneron.
Thanks George. Time for two more questions Shannon.
Our next question comes from William Pickering with Bernstein. Your line is now open.
Hi, thank you for taking my question.
Do you think that the rate of biosimilar erosion for Lucentis is a good proxy for what we can expect for ILEA? I think they saw about 25 percent of volume switch over in the first 12 months, and are there any important differences in the commercial dynamics to keep in mind? Thank you.
I just would say that it's way too early to comment, and I think that through the conversation today we've gone through the factors that create such confidence in ILEA, the demonstrated use of the product on a worldwide basis, but very early to try to make any comment about a product that hasn't been used in the real world setting yet.
Well, I think it's also important the situation is very different because at the same time
Speaker Change: There are patients on ILEA who might have a choice of going to a biosimilar. Staying on ILEA or actually moving to a differentiated product profile, which is ILEA HD. So that's a very different sort of situation than you had with just the lucentis erosion situation.
Great point. Thank you. Shannon, let's take our last question.
Speaker Change: Our last question comes from the line of Corey Kasimov with Evercore ISI. Your line is now open.
Corey Kasimov: Hey, good morning guys. Thanks for fitting me in. I wanted to follow up on Carter's question earlier about capital allocation priorities.
Corey Kasimov: I'm sure you're pretty frustrated by the market reaction to recent developments around ILEA. I know you have nearly $3 billion left in your authorized share repo, but have you given any thoughts to an ASR? And what are your evolving views around a dividend, given that you already have over $15 billion in net cash on hand?
and obviously have another significant inflection and additional cash generation not too far down the road. Thank you.
So we have lots of discussions on this, we don't really have anything more to add than we've said publicly, which is perhaps the best opportune time to think about a dividend is when we have paid off the development balance to Santa Fe, which we anticipate should be somewheres around the end of 2026.
But beyond that, how we repurchase stock, when, whether, etc., etc., is something that we really don't discuss until it's happening.
Okay, thank you, Len, and thanks to everyone who dialed in for your interest in Regeneron. We apologize to those remaining in the Q&A queue that we did not have a chance to hear from.
Speaker Change: As always, the investor relations team here at Regeneron is available to answer any remaining questions you may have.
Thank you once again. Happy Halloween. Happy Diwali. Have a great day. This concludes today's conference call. Thank you for your participation. You may now disconnect.
Thanks for watching!