Q1 2025 Regeneron Pharmaceuticals Inc Earnings Call
Welcome to the Regeneron Pharmaceuticals first quarter 2025 earnings Conference call. My name is Josh and I will be your operator for today's call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session. Please note that this conference.
Speaker Change: Call is being recorded I will now turn the call over to Ryan Gros Senior Vice President Investor Relations you may begin.
Ryan Gros: Thank you Josh good morning, good afternoon, and good evening to everyone listening around the world. Thank you for your interest in Regeneron and welcome to our first quarter 2025 earnings Conference call.
Speaker Change: An archive and transcript of this call will be available on Regeneron Investor Relations website. Shortly after the call ends.
Speaker Change: Joining me on today's call are a doctor Leonard Schleifer Board Co Chair co founder President and Chief Executive Officer.
George Young: Doctor George Young couple of Sport co Chair co founder President and Chief Scientific Officer.
Marion McCourt: Marion Mccourt Executive Vice President of commercial and Chris Fenimore Executive Vice President and Chief Financial Officer.
Speaker Change: After our prepared remarks, the remaining time will be available for Q&A.
Speaker Change: I would like to remind you that remarks made on today's call may include forward looking statements about regeneron such statements may include but are not limited to those related to regeneron and its products and business financial forecasts and guidance development programs and related anticipated milestones collaborations finances regulatory matters payer coverage.
Speaker Change: Reimbursement.
Speaker Change: Intellectual property pending litigation and other proceedings and competition.
Speaker Change: 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.
Speaker Change: More complete description of these and other material risks can be found in regeneron filings with the United States Securities and Exchange Commission, including its Form 10-Q for the quarter ended March 31, 2025, which was filed with the SEC. This morning.
Speaker Change: Regeneron does not undertake any obligation to update any forward looking statements, whether as a result of new information future events or otherwise.
Speaker Change: In addition, please note that GAAP and non-GAAP financial measures will be discussed on today's call.
Speaker Change: Information regarding our use of non-GAAP financial measures and a reconciliation of those measures to GAAP is available in our quarterly results press release, and our corporate presentation, both of which can be found on the regeneron Investor Relations website.
Speaker Change: Once our call concludes the IR team will be available to answer any further questions with that let me turn the call over to our President and Chief Executive Officer, Dr. Leonard Schleifer Lynn.
Speaker Change: Thanks, Brian and thanks to everyone joining today's call.
Speaker Change: My remarks, I will review some of our key performance drivers then briefly discuss some pipeline advances we've made this year.
Speaker Change: Then hand, the call over to George who will provide additional insights on our pipeline from them Marion who will review our first quarter 2025 commercial performance and finally, Chris will detail our financial results and provide an update on our 2025 financial outlook, let's get to it.
Speaker Change: <unk> performance in the first quarter was mixed with some difficult news related to our retinal franchise offset by encouraging news relating to the rest of our commercial portfolio as well as advances and a robust pipeline of differentiated clinical candidates.
Speaker Change: Beginning with Eylea, and then Lia H D.
Speaker Change: On a macro basis in the first quarter of 2025, the overall size of the branded anti VEGF category contracted due to an increase in the usage of low cost off label repackaged avastin likely driven by patient affordability issues because of our funding.
Speaker Change: GAAP at co pay assistance foundations.
Speaker Change: With respect to Eylea first quarter 2025 U S. Net sales were 736 million down 39% compared to the first quarter of last year and down 38% compared to the fourth quarter of 2024.
Speaker Change: However, physician unit demand decreased by 14% sequentially with the balance of the decline primarily attributable to lower wholesale inventory levels, which ended the quarter in the normal range.
Speaker Change: With respect to Eylea H D. In the United States first quarter 2025 sales were $307 million up 54% compared to the first quarter of last year.
Speaker Change: Were essentially flat on a sequential basis compared.
Compared to the fourth.
Speaker Change: Fourth quarter 2020 for Eylea HD physician unit demand grew by 5%, which was offset primarily by a modest wholesaler inventory drawdown.
Speaker Change: On the regulatory front last Wednesday, we were disappointed with the Fda's decision to issue a complete response letter for a submission seeking approval for the Eylea HD pre filled syringe since receiving the C. O route we have held several teleconference with the FDA.
Speaker Change: To better understand the contents of the C O L.
Speaker Change: I believe the key outstanding issue relates to a question posed by the FDA to a third party component supplier <unk>.
Speaker Change: This component supplier expeditiously responded to FDA requests for information.
Speaker Change: With C O L did not identify any issues with respect to the safety or efficacy of Eylea HD. The usability of the device proposed labeling.
Speaker Change: Approval inspection findings.
Speaker Change: We also recently announced that the FDA had accepted for priority review and S. BLA for Eylea H D to treat macular edema, following retinal vein occlusion or RVO and for monthly dosing and approved indications following the use of a priority review voucher. We believe these product enhancements.
Speaker Change: Instruments will strengthen eylea HTS position and the competitive anti VEGF category if approved.
Speaker Change: Moving to depicts it.
Speaker Change: First quarter 2025, net product sales grew 20% globally on a constant currency basis versus the first quarter of 2024, reflecting strong growth across all approved indications in all groups and all age groups I should say and in all geographic regions.
Speaker Change: In the U S, where net product sales grew 19% to pixel now leads in both new to brand prescription share.
Speaker Change: Total prescription share across all of its approved indications with the only exception being chronic spontaneous urticaria.
Speaker Change: <unk>, which was approved by the FDA only 11 days ago.
Speaker Change: The COPD launch in the U S continues to gain momentum with prescribers increasingly appreciating the role of type two inflammation in certain patients with COPD, coupled with greater urgency to identify and treat eligible patients payers are increasingly recognizing the value that to pixel.
Speaker Change: Office and have implemented broad and favorable coverage decisions for commercial and Medicare patients.
Speaker Change: With those pieces in place, we now look to drive patient awareness of <unk> as a new treatment option to COPD through a recently launched direct to consumer campaign.
Speaker Change: Tayo in the U S grew 21% compared to the first quarter of last year and has established itself as a cornerstone therapy for advanced non melanoma skin cancer, while its share of the lung cancer market continues to increase in.
Speaker Change: In the highly competitive first line advanced non small cell lung cancer market.
Speaker Change: <unk> is now second and new to brand prescription share despite launching years after the other competing therapies, reflecting its differentiated clinical profile and our commercial strategy.
Speaker Change: We expect to picks in Eylea HD and retired to continue delivering significant growth for the foreseeable future to additional penetration in approved indications potential future indications potential combinations with other pipeline candidates as well as other potential product enhancements.
Speaker Change: Now briefly moving to our pipeline, which now includes approximately 45 product candidates in clinical development.
Speaker Change: We continue to make significant investments in R&D, which have yielded notable progress across several key programs. So far this year, including four regulatory approvals and nine regulatory submissions.
Speaker Change: For the remainder of 2025, we anticipate U S regulatory approvals for Limburg, South demand in relapsed refractory multiple myeloma <unk> in late line Follicular lymphoma, limp Tayo in adjuvant CFCC do picks in in bolus pemphigoid as well as differentiated.
Enhancements to the Alere H D U S label.
George Young: We also now expect to readout pivotal or proof of concept data of course programs in immunology oncology hematology internal medicine, and rare diseases programs that George will discuss in a minute.
George Young: In closing, we generally remains in a very strong position scientifically commercially and financially enabling us to invest heavily in R&D and go live with scientific breakthroughs maximize growth opportunities from our in line brands successfully launched new products and indications.
George Young: <unk> and returning capital directly to shareholders through dividends and share repurchases. We look forward to providing updates on these efforts as we move through the remainder of 2025 with that I'll turn the call over to George.
George Young: Thanks, Lynn 2025 is shaping up to be an exciting year for advancing a broad and differentiated pipeline.
George Young: Look forward to reporting several pivotal or proof of concept data sets from multiple programs.
George Young: To briefly highlight the significant opportunities and discuss additional pipeline advancements starting with depiction, which continue to set a high bar across multiple type two allergic diseases earlier. This month to pixel was approved for the treatment of adults and adolescence with chronic spontaneous urticaria, who remain uncontrolled despite.
George Young: Anti histamine treatments. This approval marks the seven type two allergic disease.
George Young: <unk> has been approved by the FDA and is the first new treatment option for CSU patients in over a decade.
George Young: <unk> was also accepted for priority review for the treatment of bolus Pemphigoid with a <unk> date of June 20.
George Young: <unk> Pemphigoid represents yet another first in class opportunity for depicts it which is the only biologic to achieve significant improvements in disease remission and symptoms in this segment and finally depicts and became the first ever biologic medicine to be approved for COPD in Japan, marking the 45th country in which the COPD indication.
George Young: It's been approved.
George Young: We are eagerly awaiting the pivotal readout for you pick them at our interleukin 33 antibody for COPD and former smokers, regardless of eosinophil levels with data expected in the middle of 2025.
George Young: Additionally to COPD, we recently initiated a phase II program for electric man and chronic line of sight as with nasal polyps and indication was strong genetic validation as.
George Young: As well as a phase two study in chronic wound size without nasal polyps. In addition next year, we are expecting proof of concept data for you to pick them in non cystic fibrosis bronchiectasis.
George Young: Turning now to oncology efforts, we recently submitted U S and EU regulatory filings for lip Tayo in adjuvant SEC will tell became the first immunotherapy to show a benefit in a high risk population.
George Young: Early June these data will be presented in an oral presentation at the American society of clinical oncology or <unk> annual meeting highlighting a 68% reduction in the risk.
George Young: Disease, recurrence or death compared to placebo with no new safety signals identified.
George Young: This data set underscores our belief that Tayo provides a best in class Foundation for combinations with our other oncology assets and in this regard with Tayo is being tested in combination with the element our lag three antibody in several solid tumor settings in melanoma early clinical data have suggested that this combination.
George Young: Can provide substantial additive benefit compared to PD, one monotherapy without exacerbating safety and ongoing phase III trial in first line metastatic melanoma evaluating this combination compared to <unk> monotherapy is expected to read out in the second half of this year.
George Young: We reiterate these data confirmed best in class activity in melanoma, you will increase our confidence for this combination in other Kansas.
George Young: In first line advanced non small cell lung cancer, a preplanned interim analysis was conducted this month on two ongoing phase II studies evaluating this combination due to limited follow up the phase II portion of this phase will continue unchanged until additional data are available. The next analysis for these studies are expected in the first quarter of 2026, and which are <unk>.
George Young: Susan whether advanced to phase III will be made no new safety signals were observed in either study.
George Young: Turning to our CD three bi specifics the European Commission recently granted conditional marketing authorization for <unk>.
George Young: Limbaugh sell demand our <unk> by <unk> three by specific for the treatment of adult patients with relapsed refractory multiple myeloma, who have received at least three prior therapies, marking Lim <unk> first global regulatory approval in the U S. Our resubmission of the <unk> BLA for relapsed refractory multiple myeloma with <unk>.
George Young: Accepted by the FDA with a <unk> date of July 10th we believe <unk> has the potential to be the best in class <unk> by <unk> Bispecific due to its differentiated clinical profile dosing and administration.
George Young: Our broad clinical program in earlier lines emphasizes monotherapy and limited combinations and continues to advance with the confirmatory phase III linker MN three study in relapsed refractory multiple myeloma now fully enrolled.
George Young: And <unk> also an oral presentations, we will present initial results from the phase one two linker mmm two trial evaluating <unk> in combination with Carfilzomib and Bortezomib in patients with relapsed refractory multiple myeloma, both combinations demonstrated a high rate of deep and durable responses with this.
George Young: Safety profile consistent with the individual drugs supporting further development.
George Young: For ultra and X demand, our CD 20 by <unk> Bispecific. The FDA has accepted the BLA resubmission for relapsed refractory Follicular lymphoma with a <unk> date of July 30, <unk> has demonstrated potentially best in class efficacy in this late line setting and our differentiated clinical development plan focuses on Mont.
George Young: Therapy and limited novel combinations in earlier line and continues to advance.
George Young: Turning to hematology.
George Young: We are rapidly advancing our factor 11 program, where we are investigating two different antibodies that target different factor 11 domains to create a tailored approach to anti coagulation offering the potential for improved blood clot prevention and lower bleeding risk.
George Young: We remain on track to enroll patients in pivotal studies this year, both in settings with large patient populations and longer follow up as well in settings with small populations and shorter follow up they may provide a quicker path to market.
George Young: Moving to our obesity efforts regeneron has decades of experience in muscle biology growth factors signaling pathways in genetics, we are capitalizing on this expertise to position ourselves as a key player in the rapidly expanding obesity market by investigating agents that enhanced <unk> weight loss by maintaining muscle.
George Young: Yes.
George Young: Sparing phase II <unk> study is investigating the addition of <unk> <unk> or <unk> to <unk>, <unk> with and without <unk>, our activin antibody with the goal of improving the quality of weight loss. We expect to report data for the 26 week primary endpoints, including percentage of weight loss in percentage.
George Young: Fat loss compared to baseline in the second half of this year.
Speaker Change: At the upcoming American Diabetes Association meeting in June we anticipate that Lilly will present phase two data from a very related program evaluating <unk> combined with an antibody that binds to active in type two receptors, which blocks myostatin and activin signaling the weight loss lean mass preservation overall metabolic <unk>.
Speaker Change: Along with safety and Tolerability will help inform next steps for our programs as well and.
Speaker Change: And finally, moving to our Regeneron genetic medicines pipeline our novel <unk> antibody combination has demonstrated rapid complete and uninterrupted inhibition of <unk> as seen in the ongoing pivotal program in patients with paroxysmal nocturnal hemoglobinuria. These profound findings increase our confidence in <unk>.
Speaker Change: Robust improvement in generalized myasthenia gravis, where pivotal results from an ongoing phase III program are expected in the second half of this year. Our unique mechanism of action provides more complete <unk> inhibition than observed with other <unk> approaches that are approved in this indication as well as the potential for more convenient subcutaneous regimens.
Speaker Change: In summary, Regeneron continues to deliver scientific firsts and drive innovation, our unique R&D capabilities have allowed us to build will be the most prolific pipelines in our industry and we look forward to reporting multiple impactful Readouts later this year with Lat, Let me turn it over to Maryann. Thank you George despite a challenging.
Maryann: Environment in the first quarter, our commercial teams are positioned to capitalize on multiple near term opportunities across the portfolio, including product enhancements and launches of both new medicines in new indications for previously approved medicines.
Maryann: Into the future is George highlighted our pipeline is poised to deliver the next wave of significant commercial opportunities that may provide innovative medicines to even more patients.
Maryann: With our first quarter results finally, each DNI lay up combined U U S. Net sales for $1 4 billion down 30% sequentially, primarily reflecting lower wholesaler inventory levels for both products, which declined during the quarter to the normal range as well as continued compare.
Maryann: Native pressures in aggregate sequential position unique demand finally, HDMI Leah declined by 11%.
Maryann: We believe there was a significant negative impact in the branch and anti VEGF category due to an ongoing funding gap at not for profit patient assistance foundations that provide co pay support for eligible patients with retinal diseases.
Maryann: Currently low cost off label repackaged Avastin increased its anti VEGF category share by approximately six percentage points to 32%. Despite these challenges <unk> captured 41% of the anti VEGF category maintaining market leadership for.
Maryann: For the first quarter lbs, Alere U S. Net sales were 736 million, primarily due to lower wholesaler inventory levels lower physician demand as well as increased competition, while we expect competitive pressures to finally have to persist our focus remains on promoting the ongoing adoption of eylea each day.
Maryann: Which has the potential to become the new standard of care.
Maryann: <unk> HD was the only branded medicine in the anti VEGF category small team U S net sales quarter over quarter.
Maryann: <unk> $307 million and growing 54% year over year in August we anticipate potential FDA approvals of Andy HD and retinal vein occlusion and for every four week dosing across all approved indications if approved and rvs ADHD would be the first and only treatment that can be.
Maryann: We dosed up to every eight weeks, which is twice as long as any other product in the category.
Maryann: In addition, with the potential approvals every four week dosing Ali HD would offer physicians demos flexible dosing options in the category with these label enhancements and anticipated approval of the pre filled syringe, we expect to see an acceleration in eylea HDD demand and added to <unk> and the first quarter depicts is cheap.
Maryann: Global net sales of $3 7 billion, representing a 20% year over year increase on a constant currency basis in the U S. Net sales grew 19% to $2 6 billion based on robust demand across all approved indications in the first quarter U S. Net price was unfavorably impacted by the annual reset of commercial insurance to Dr.
Maryann: <unk> and the implementation of Medicare part D. We sign it.
Maryann: It takes engine continues to live up to its potential to dramatically improve patients' lives with approvals seven indications.
Maryann: All of which have achieved blockbuster status globally depicts since unique mechanism of action makes it the only medicine that addresses the underlying drivers of disease and treats multiple comorbid type two conditions.
Maryann: <unk> increase in competition in established indications.
Maryann: Remains the market leader in atopic dermatitis increased promotional spend from competitors has accelerated market growth. We can take still continuing to capture the vast majority of new patients in asthma depiction continues to lead all biologics and new to brand share and is now the category leader in total prescriptions.
Maryann: And then some in new indications continues to build and COPD uptake is accelerating.
Maryann: Most pulmonologists have extensive experience in prescribing <unk> for asthma and are increasingly prescribing. It for COPD. Many remarked undertake since the ability to reduce exacerbations rapidly and meaningfully improve lung function and reduce the need for oxygen therapy with physician and patient awareness building and strong reimbursement.
Maryann: Established the COPD launch has outperformed all other detects and indication launches in cumulative new to brand prescriptions with the exception of atopic dermatitis.
Maryann: Earlier this month. It takes it was approved to treat patients with chronic spontaneous urticaria or CSU, where we estimate there are more than 300000 patients in the U S with disease inadequately controlled by anti Histamines depiction is the first new targeted treatment for CSU in over 10 years, providing a new treatment for patients who previously had limited.
Maryann: Options the launches underway and early feedback has been favorable.
Maryann: Our <unk> team is also preparing for potential approval and bullous, Pemphigoid, which would represent the fourth approval in a chronic and debilitating skin disease driven by type two inflammation nearly 30000 adults in the U S suffer from this difficult to treat condition, where current cares limited to corticosteroids immunosuppressants.
Maryann: These treatments have poor clinical efficacy as well as safety concerns, particularly in older patients. If approved it takes it won't be the first and only targeted medicine to treat this disease. In summary depiction is now firmly established as the standard of care across a range of types of conditions and has substantial growth opportunities in both existing and new into.
Maryann: Patients turning now to lead time first quarter global net sales grew 8% year over year on a constant currency basis to $285 million with U S. Net sales, reaching $193 million up 21% first quarter results reflect typical seasonality dynamics and the timing of shipments and lower inventory levels.
Maryann: In the U S demand continues to increase across but non melanoma skin cancer indications and lung cancer and we are seeing growth in approved indications internationally. We look forward to the potential FDA approval of <unk> for adjuvant treatment of high risk cutaneous squamous cell carcinoma, where we estimate there are approximately 10000.
Maryann: <unk> from U S and May benefit from this treatment or ecology teams are excited about the potential to launch two new hematology products. Later this year, Linda <unk> in relapsed refractory multiple myeloma and <unk> in relapsed refractory Follicular lymphoma, those have demonstrated best in class clinical profiles in these later lines.
Chris: Settings in summary, our commercial portfolio is well positioned to capitalize on many near term growth opportunities, enabling us to deliver more treatments to more patients with that I'll turn the call over to Chris.
Chris: Thank you Marion My comments today on Regeneron financial results and outlook will be on a non-GAAP basis, unless otherwise noted.
Chris: First quarter 2025 total revenues were 3 billion includes.
Chris: Inclusive of higher Saturday collaboration revenue driven by two kicks in growth at higher U S. Net sales of Eylea HD compared to the prior year.
Chris: First quarter diluted net income per share was $8 22.
Chris: Net income of $928 million.
Chris: Beginning with collaboration revenue revenues from the Sanofi collaboration were approximately $1 2 billion of which $1 billion related to our share of collaboration profits.
Chris: General and share of profits grew 27% versus the prior year driven by volume growth from <unk> and higher collaboration margins.
Chris: The therapy development balance was approximately $1 5 billion at the end of the first quarter, reflecting a reduction of approximately $180 million from the end of 2024.
Chris: Moving a buyer first quarter net sales of Eylea and Leah eight Meg outside the U S were $858 million up 5% versus the prior year on a constant currency basis, and inclusive of a $146 million of Eylea eight Meg sales.
Chris: Total Bayer collaboration revenue was $344 million of which $317 million related to our share of net profits outside the U S.
Chris: Our operating expenses R&D expense was $1 2 billion in the first quarter modest growth versus the prior year was driven by our continued investments to support regeneron innovative pipeline, including higher personnel expenses and clinical manufacturing costs.
Chris: First quarter, SG&A was $537 million down 8% from the prior year.
Chris: The decline was driven by lower general and administrative expenses, while selling expenses were flat year over year.
Chris: First quarter 2025 gross margin on net product sales was 85% the lower gross margin versus the prior year reflects higher inventory write offs in the first quarter of 2025, and a changing product mix.
Chris: Our effective tax rate increased versus the prior year, primarily driven by a lower benefit from stock based compensation deductions.
Chris: Regeneron generated $816 million in free cash flow in the first quarter and ended the quarter with cash and marketable securities of $17 6 billion and debt of approximately $2 7 billion.
Chris: We continue to monitor developments regarding pharmaceutical sector tariffs, while we do not expect previously enacted tariffs to have a material impact on our business any potential impacts from sector specific tariffs is not quantifiable at this time due to uncertainty around the details of implementation.
Chris: Regardless of any potential tariffs regeneron has always been committed to making significant investments in the United States to expand our R&D and manufacturing capabilities, We recently announced a new agreement with Fujifilm <unk> Biotechnologies in North Carolina to invest over $3 billion to nearly double our.
Chris: U S large scale manufacturing capacity.
Chris: This agreement along with our $3 $6 billion expansion of our Tarrytown, New York R&D at preclinical manufacturing facilities, our fill finish facility in Rensselaer, New York and the acquisition of an additional property in Saratoga Springs, New York represent planned U S investments of over $7 billion.
Chris: These investments will enable us to continue to grow in the U S and support our differentiated R&D engine, while significantly increasing our ability to manufacture both clinical and commercial supply.
Chris: Beyond these investments we continued to return capital to shareholders in the first quarter, both through share repurchases and the payment of our recently initiated quarterly dividend.
Chris: We repurchased approximately $1 $1 billion worth of our shares in the first quarter with approximately $3 9 billion remaining available for share repurchases as of March 31, we continue to see share repurchases as an efficient use of capital and remain opportunistic buyers of our shares in.
Chris: In addition to share repurchases, our newly initiated dividend program allows us increased flexibility to return capital to shareholders. We paid our first quarterly dividend last month and the board of Directors has declared the next dividend of 88 per share which will be paid in June.
Chris: Finally, we have updated our 2025 gross margin guidance to be in the range of 86% to 87%. This change is primarily driven by higher than expected inventory write offs in the first quarter.
Chris: A full summary of our latest guidance can be found in our press release issued earlier this morning.
Chris: In conclusion, Regeneron strong financial position will allow us to continue to invest in our differentiated R&D capabilities and pipeline to deliver new medicines to patients and long term value to shareholders with that I will pass the call back to Ryan.
Ryan Gros: Thank you Chris. This 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. We will answer one question from each caller before moving to the next.
Speaker Change: Josh can we go to the first question. Please.
Speaker Change: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
Speaker Change: Our first question comes from Tyler Van Buren with TD Cowen You May proceed.
Speaker Change: Hey, guys. Good morning, Thanks, very much for the question regarding the <unk> HD zero for the pre filled syringe could you elaborate further on the question posed by the FDA and perhaps more importantly compare the situation to the original Eylea HD krell as that speed to resolution was very quick about two and half months, if I'm not mistaken which would see.
Speaker Change: We'll be ahead of the RVO and every four week dosing period in August.
Speaker Change: Right got it thanks for the call Simon speaking.
Speaker Change: You have to understand a little bit of detail on the processes.
Speaker Change: And what happens in that when you're reviewing.
Speaker Change: <unk> reviewing your submission for an approval of a new device.
Speaker Change: We don't necessarily make all the components and in this case, we don't make all the components.
Speaker Change: It might be buying or stop it from somebody some glass from somebody else and needle from somebody else and so forth.
Speaker Change: And we have the design and then we.
Speaker Change: Simply.
Speaker Change: When the FDA has questions about one of the components.
Speaker Change: That's what is referred to as a drug master file. They go to the holder of that drug Master file lets say, it's somebody who makes one of the components. The FDA has a question or how do you guys do this and then the hold of the master file responds to the FDA.
Speaker Change: By rule.
Speaker Change: We are not party to that up and back between the FDA and the third party component supplier.
Speaker Change: The reason, we're not parties because most of the time these questions relate to general practices, where in which the supplier is not only supplying regeneron.
Speaker Change: Might be supplying 20 other pharmaceutical companies, which is in fact the case in some of these dms, we're dealing with here. So that's the general tone of things.
Speaker Change: <unk> get asked in this particular case.
Speaker Change: Based on our phone calls.
Speaker Change: After we received the CRM last Wednesday.
Speaker Change: We realize that nobody had gotten these questions until the day of the CRA hour day before literally after the CRM and any case based on our conversations with the FDA. We believe there is one key issue that.
Speaker Change: Is left to resolve.
Speaker Change: There are a few other minor ones, which I think would just clarifications, but the one key issue relates to a supplier and the supplier.
Speaker Change: As told us that the FDA asked this in the data they have all the data they expeditiously.
Speaker Change: Supplied it now of course, we don't know the data because we can't be involved by rule in that process.
Speaker Change: We take it not worried that they think that they are satisfying the agency because the FDA has to review this there could be up and back you said this what we really wanted that maybe have more of this and so forth so that leads to a little bit.
Speaker Change: Certainty on how fast this could all get resolved.
Speaker Change: We do have commitments from the FDA that they will move expeditiously as well that doesn't mean, they will approve it but they will review quickly David that submitted and have it up and back because they recognize I think the importance in advance of the pre filled syringe being a better way of administering the product then Adam.
While for patients.
Speaker Change: Getting into vitriol injections, so boil all that down how long can this stake it could go quickly as you said the last time. This happened it took a few months it could go longer we don't think Theres a reinspection involved it's not an issue related to that so we don't think there'll Bbs and <unk>.
Speaker Change: Turn of a long timelines for that.
Tyler: But we'll know more in the coming weeks or months, and we will hopefully get it across the finish line in a short while but we'll try and keep you posted once once we know what the FDA is really up to I'm, sorry that thats, a little indefinite Tyler, but that's the nature of the process.
Speaker Change: Thanks, Glenn let's move to the next question please Josh.
Tyler: Thank you.
Speaker Change: Our next question comes from Alexandra <unk> with Wolfe Research you May proceed.
Speaker Change: Hey, Thanks for taking the question I wanted to pivot a little bit and I'm curious on the pipeline. So on your factor 11 antibody is how you prioritize which indications to go after and how should we think about the timing of launches can you provide any follow up too on your discussions with regulatory authorities on aligning trial design. Thank you.
Speaker Change: How do we prioritize I couldnt hear to 11 indications indications.
Speaker Change: We're doing a combination of indications that are.
Speaker Change: Maybe to be expected and we will take a little bit longer as well as some indications that we haven't disclosed that.
Speaker Change: We think we might be able to get across the finish line sooner.
Speaker Change: In terms of our approach is what we are trying to prioritize or indications in studies, where we will be able to show the benefit not only of the anti coagulation profile but of the.
Speaker Change: <unk> bleeding risk profile of both of these antibody and the hope is to actually show.
Speaker Change: That one or both of these antibodies have very favorable anticoagulation as well as substantially lower bleeding risks than available options for patients.
Speaker Change: So we haven't disclosed all the indications we haven't shown the timing of them, but there is a variety of them.
Speaker Change: And there some of them will be coming in sooner. So that we will be taking a little bit longer and we hope that they will be emphasizing as I said.
Speaker Change: Potential for really addressing what's holding back a lot of patients in this field from receiving anticoagulation therapy, which is minimizing the bleeding risk that these people.
Speaker Change: Invariably.
Speaker Change: Suffer from.
Speaker Change: As we've announced.
Speaker Change: We are beginning to enroll phase III studies this year.
Speaker Change: Okay. Thanks, George lets move to the next question. Please.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Chris Schott with Jpmorgan you May proceed.
Speaker Change: Okay, great. Thanks, so much for the question I just had one on Eylea and foundation funding I appreciate the color on the call, but just any updated thoughts on when we could think about the foundation reopening and how quickly once it's reopened and we could think about some of these volumes moving from the.
Speaker Change: Generic Sebastian back to branded agents. Thanks, so much.
Speaker Change: Chris Thanks for the question just for the benefit of everybody, Let me just remind.
Speaker Change: How August works.
Speaker Change: When you're under commercial insurance and your younger than 65, if you have a co pay in your insurance program.
Speaker Change: Sponsors that people like Regeneron, Ken directly to a patient supply co pay assistance in the form of a coupon et cetera et cetera.
Speaker Change: The patient turning 65, and if they go on Medicare, which most of our patients getting introduced you injections are those patients.
Speaker Change: We are responsible for a co pay typically around 20% if they're in Plano Medicare it varies somewhat if theyre in Medicare advantage. Some people. Many people have insurance supplemental gap insurance AARP or whatever you want to call it which cover.
Speaker Change: These co pays but there are still others, who don't have insurance and can't afford their co pay associated with an injection of a.
Jeff: And Jeff agent for example.
Jeff: The government has indicated that companies can be part of the safety net if you will to help patients who need financial assistance and the way. This works is that companies and others can support independent.
Jeff: Independent charitable foundations, who then assist patients with retinal disease, regardless of the drug they need.
Jeff: The foundation has taken financially eligible patients and give out.
Jeff: Assistance that they can afford to give out on a first come first serve basis and so there is no direct relationship if we give money to a foundation. It could go to support a bad smell. It could go to support <unk>. It to go to support I leave it could go to support in fact in these funds has been constructed today.
Jeff: It could go to support the drugs for geographic atrophy Theres no connection.
Jeff: Shouldn't be and what we did and then have the time.
Jeff: Dole out the resources.
Jeff: We would like to help as many patients as we can.
Jeff: Turns out with prime.
Jeff: If not the sole the vast vast supporter of these foundations and the recent history, we're talking about having giving large sums of money.
Jeff: In the neighborhood of over $400 million last year to do this charitable work.
Jeff: Yes.
Jeff: Our commercial outlook and the field has changed as our resources have changed.
Jeff: We looked at this and say.
Jeff: Now wed like to continue doing this.
Jeff: Can't do it all ourselves we'd like to help as many people as possible and so we're trying to come up with a way where others and regeneron could make sure that people in need get the drug.
Jeff: Co pay support without regard to what drug they actually choose when they choose and one of the things that we've come up with is sort of a standard thing that we all have seen this in our charitable philanthropic efforts.
Jeff: We're considering a matching program, where regeneron would put up and say, we'll put up X dollars.
Jeff: Some amount and that people depending upon other people putting up we would match their contributions we would hope that this might stimulate others to be more philanthropic than they've been.
Jeff: We're working through the mechanics of this with the foundation.
Jeff: When this all can get launched.
Jeff: We hope in the not too distant future.
Jeff: Whether or not others will step up to the plate I'm not sure, but we certainly hope because patients do need this I.
Jeff: I hope that answers your question.
Speaker Change: Such an important issue for you Chris if I haven't answered it will give you another question to drill down on this a little further.
Speaker Change: Okay, we'll move on for now Chris if you'd like to ask another question. Please hop back in the queue.
Speaker Change: Josh let's move to the next question. Please.
Speaker Change: <unk>.
Speaker Change: Our next question comes from Terence Flynn with Morgan Stanley You May proceed.
Terence Flynn: Hi, Thanks for taking the question just wanted to ask an additional one on the the pre filled syringe.
Speaker Change: Thanks for all the details.
Speaker Change: But can you confirm that this component is something that's used in your pre filled syringes. It's already approved in Europe or is this a different component or as a component used in any other pre filled syringes just trying to understand the novelty here and.
Speaker Change: And why this might be a hang up thank you.
Speaker Change: Yes.
Speaker Change: Is the same device same design in the same components that was approved in Europe last year and has been safely used for months. So.
Terence Flynn: We don't think there is any issue whatsoever with the proven ability of this but the FDA has their own set of questions. They want to know did you do this always the data for that that sort of thing and they don't just automatically approve it just because Europe has approved but yes. Your question is a good one terence.
Terence Flynn: It gives us all some confidence that these issues should be resolvable, because they were resolved for European approval.
Lin: Okay. Thank you Lin with moving the next question. Please.
Thank you.
Speaker Change: Our next question comes from a cost to worry with Jefferies. You May proceed.
Speaker Change: Hey, Thanks, So Mike you mentioned $400 million in patient. Good day can you comment on what percent of your U S. Patient base received funding in 2024, 25%, a fair estimate and just to kind of drill into the specifics from what <unk> seen in Q1, what percentage of those patients are dual covered or half.
Speaker Change: Supplemental insurance, so they would be able to get back on to Eylea without help from good days and then learn.
Speaker Change: Assuming that other Roche in some of these other players don't aren't receptive to this matching program.
Speaker Change: What is your team going to do right is there a situation where funding to good days doesn't return at any point in 2025.
Speaker Change: All right a lot of questions embedded in there, but the first series of questions. We can answer we don't do any correlations about our contributions and the implications for Eylea usage, that's not committed it's not appropriate and the people who make the decisions that we.
Speaker Change: General and not the commercial people. This is not a conduit of any shape manner or form.
Speaker Change: It's not permissible under the rules. So we don't we can't answer any of those questions about eylea.
Speaker Change: In terms of what.
Speaker Change: The plan is well I think you've heard it.
Speaker Change: To stimulate a community of gamers.
Speaker Change: You mentioned, one because it has to be it could be somebody else.
Speaker Change: Moscow once again thats good by US too we're not targeting antibody in particular, we're just saying that we would like to see.
Speaker Change: Stimulate others and I should just leave it at that.
Speaker Change: Okay. Thanks, so much let's move to the next question. Please thank.
Speaker Change: Thank you. Our next question comes from Carter Gould with Cantor you May proceed.
Carter Gould: Alright, guys. Good morning, Thanks for taking the question sorry to come back to the regulatory operations and I. Appreciate all the color on nuance on the peripheral trends, but this is your fourth TRL and.
Speaker Change: As well as a delay in the past sort of 12 months is their acknowledgment. This performance is unsatisfactory across there.
Speaker Change: The regulatory group and maybe you could highlight any steps you've taken to improve regulatory performance I recognize there are idiosyncrasies.
Speaker Change: And if I'm being a fair. Please correct me, but the rate of CRM and delays really stands out versus peers. Thank you.
Speaker Change: Well, that's a tough one well if anybody is going to take responsibility. It is going to be me, putting this on our regulatory group whatsoever, because I think they've done a spectacular job.
Speaker Change: As is our manufacturing group.
Speaker Change: We have a lot of activity at the FDA I can't remember, what we said nine.
Speaker Change: Submissions.
Speaker Change: So we're going to have more than our share of regulatory interactions I think our team is first rate.
Speaker Change: <unk> of issues that have come up.
Speaker Change: Are.
Speaker Change: Reflecting in my view.
Speaker Change: Increased scrutiny by the FDA post COVID-19 on contract manufacturers performing a variety of functions all of our C. R. LS I should say not all but for the vast majority of Ico ALS.
Speaker Change: They relate to these issues.
Speaker Change: At.
Speaker Change: Third party suppliers, which the FDA recognized.
Woefully behind the times during Covid, there wasn't enough of them. They were flunking inspections, and so I think the FDA is China step up the game. If you will of these contract manufacturers and since were so active we see more I don't think its I will acknowledge for sure that we're unhappy.
Speaker Change: That pace.
Speaker Change: And if there is blame I'm happy to take it personally, but it's certainly not a reflection on our regulatory group or our manufacturing people were working really hard to get this right.
Speaker Change: Now in some cases the rules have changed sort of mid game, we added a route where we hadn't quite enrolled enough people and why did the FDA changed that sort of approach because other manufacturers werent bothering to enroll antibody over 10 year period, and so we've said we're not going to do these accelerated approvals. So we got.
Speaker Change: Caught up in that but.
Speaker Change: <unk> that and we're expecting that approval to come there was another CRA related to a manufacturing thing with originally with Eylea out of our control we got that.
Speaker Change: I don't want this to sound like excuses, we own the issues.
Speaker Change: Because it's a product but it is reflective I think more of what is going on.
Speaker Change: At the.
Speaker Change: The level of the contract manufacturers.
Speaker Change: Catherine next question please.
Speaker Change: Thank you.
Speaker Change: Our next question comes from Brian Abrahams with RBC you May proceed.
Speaker Change: Hi, This is Joe on for Brian. Thanks for taking my question. So for ice pack him at his turbine any further evolution of our understanding in IL 33 is a therapeutic target.
Speaker Change: Since its phase III COPD data.
Speaker Change: And the mechanistic rationale behind.
Speaker Change: That's more pronounced benefit in former smokers.
Speaker Change: As you expand <unk> picking up development.
Speaker Change: How will the COPD results guide the further expansion. Thank you.
Speaker Change: Well.
Speaker Change: A lot of our insight into IL 33 come from genetics in the pathway as you know from our Regeneron Genetics Center, we have a large number of human sequence. We can actually see variation in the IL 33 pathway, what we actually see is that patients who.
Speaker Change: Are genetically deficient in this pathway are protected from COPD and those who have excess IL 33 activity are more prone to COPD as well as a series of other diseases some of which we've described.
Speaker Change: We are investigating with additional clinical trials, so that's where the whole rationale in the hole.
Speaker Change: Idea comes from which indications we go after as we've already said our phase two study showed an overall reduction in exacerbations that was driven by this former smoker population, we think we might be understanding a little bit about that mechanism, but nothing definitive.
Speaker Change: A new up until this point and I do remind you that these phase III studies did pass an interim analysis.
Speaker Change: About halfway through the program, which gives us additional hope and confidence. So the genetics is strong here the phase II data was strong here.
Speaker Change: And the fact that we passed an interim.
Speaker Change: Efficacy barrier gives us confidence here, but obviously, we will be getting the data in a short period of time and that will be definitive.
Speaker Change: Any thoughts on future indications based on the COPD results.
Speaker Change: Well, we announced as I just described in my comments a few.
Speaker Change: Ongoing studies in a few studies that were initiating we're also very excited about the opportunity in asthma because the data is very strong there and I think that depending on the COPD results, we might be considering moving into that space as well because the genetics. There is also very very strong.
George Young: George So let's move to the next question. Please.
Speaker Change: Thank you.
Speaker Change: Our next question comes from William Pickering with Bernstein, You May proceed.
William Pickering: Hi, Good morning. Thank you for taking the question on Eylea Ht monthly dosing submission. The Lora safety trial, just completed enrolling in March and I believe that you submitted the filing.
Speaker Change: Before that so what percent of the total enrollment was included in the submission.
Speaker Change: Did you have alignment with the FDA this would be sufficient and what's your overall level of confidence in this submission at this point. Thank you.
Speaker Change: No I don't think were going to get into the details of all of that suffice it to say that they have accepted our submission.
Speaker Change: Therefore, there's no deficiency.
Speaker Change: Say like we didn't have enough numbers or something like that now its a review issue and we'll see how that process goes and we'll let you know when we know something but in terms of whether or not we've seen.
Speaker Change: <unk> as a requirement for evaluation.
Speaker Change: Did pass that hurdle because it was accepted for review.
Speaker Change: And the next question.
Speaker Change: Thank you.
Mervyns Hagerman: Our next question comes from Mervyns Hagerman would BMO capital markets you May proceed.
Mervyns Hagerman: Hi, guys. Thank you so much for taking my question I want to pose one for you Lynn I'm hypothetically speaking if you can redesign away to provide patient assistance without the use of charities and.
Mervyns Hagerman: Current legislation aside how would you structure that program per Medicare would it be direct kind of co payments for patients who need it or.
Mervyns Hagerman: Or other kind of mechanism the systems, how do you think about that.
Mervyns Hagerman: Yeah, that's a great question and I address that I think.
Mervyns Hagerman: Recently on CNBC.
Mervyns Hagerman: Interview that.
Mervyns Hagerman: But let me revisit it just to level set everybody remember the point being is that we cannot do direct patient assistance to people who are having their drugs paid for by government funding.
Mervyns Hagerman: Suggested with the stroke of a presidential pen.
Mervyns Hagerman: They can choose to allow sponsors.
Mervyns Hagerman: To provide co pay assistance directly the way we do for commercial patients. The notion that somebody is going to take an expensive drug requires treatment for cancer, let's say or an injection in the eye or something like that because they get co pay assistance.
Mervyns Hagerman: Seems to me ill founded.
Mervyns Hagerman: And maybe it might increase utilization, perhaps but far more importantly, it means patients will get the best drug that doctors choose for them. There is lots of evidence and we just added this quarter that we most retinal specialists will tell you that.
Mervyns Hagerman: Avastin is not the best drugs to treat patients with a variety of retinal diseases, yet people who are poor.
Mervyns Hagerman: Who can afford co-pays wind up getting that in a disproportionate number as you saw when there was no co pay assistance here and Thats really the wrong that needs to be right, where I designing this I would allow copay assistance.
Mervyns Hagerman: By directly from sponsors to patients I think one could literally do this.
Mervyns Hagerman: President wanted to do this he would get millions and millions of seniors would be greatly appreciated that they werent fussing and worrying and figuring out what am I getting the best treatment Thats going to make me not lose my vision or am I getting the right cancer treatment. So that I can live to see.
Mervyns Hagerman: The next year and so forth I think that that would be a great thing for the president to do.
Speaker Change: Alright, let's move to the next question. Please thank.
Mervyns Hagerman: Thank you.
Speaker Change: Our next question comes from Sal <unk> with Goldman Sachs. You May proceed.
Speaker Change: Good morning, Thank you.
Speaker Change: Thank you our capital expenditure guidance for this year can you help us understand this in the context of your recent manufacturing announcements and cadence here for it spend.
Speaker Change: In the current environment.
Speaker Change: Yeah. Thanks, <unk> for the question.
Speaker Change: We lowered the top end of the range by $25 million Theres, nothing really to look through that other than just some timing of the <unk>.
Speaker Change: We see the expenditures going out, but we're committed to our capital plans and nothing has changed accordingly.
Speaker Change: Okay. So I think we have time for one more question.
Speaker Change: Thank you.
Speaker Change: Our next question comes from David Risinger with Leerink Partners you May proceed.
Speaker Change: Yes, thanks very much.
Speaker Change: So.
Speaker Change: And I'm, hoping you can address the big picture question. The industry is facing three major U S government risks.
Speaker Change: Specifically actions that are harming biopharma innovation, including FBA disruption.
Speaker Change: Questioning our proven medical science Evisceration of the NIH.
Speaker Change: In addition, tariff threats and then finally, the Trump administration's agenda to take down drug prices more than the Biden administration. So considering what appears to be a lack of appreciation in Washington of the benefits that the biopharmaceutical industry brings to Americans.
Speaker Change: You please comment on how.
Speaker Change: You and your executive team and board are engaging differently today, with Washington leadership to change the political agenda for the better.
Speaker Change: To you.
Speaker Change: Great question, David look I think during this transition period. There is a lot of disruption in Washington, There is loss of personnel reduction in force new people in charge new focuses and so forth.
Speaker Change: The president.
Speaker Change: I thought that RFK junior while we thinks outside the box needed some assistance on the science front.
Speaker Change: That's dragged out.
Speaker Change: And offered to provide that and I think that they're on.
Speaker Change: Similarly, as I do that we can't lose the ability to do science.
Speaker Change: That mean that the way science is being done in this country. The way grants have been given out is done exactly right. No. There is room for improvement across all of what we do we saw that during COVID-19 when one of our antibodies didn't get the kind of indication. It clearly should have based on the science why that happened somebody wasn't.
Speaker Change: The science, so there's room for improvement.
Of course, there's risk David as you pointed out.
Speaker Change: If we take a path where we just stopped following science and we will.
Speaker Change: We gave up on tried and true methodologies I think we could be in trouble. If we take a fresh look at things, but still guided by scientific principles.
Speaker Change: I think things could improve obviously experienced does matter and I really hope that.
Speaker Change: We do not lose really good people.
Speaker Change: The FDA and the rank and file or even at the policy level I think that would be deleterious. So I think you know we don't get to set the policy, we hopefully get to influence a little bit and we try and work through it but the company.
Speaker Change: <unk> is a fair amount of effort trying to.
Speaker Change: Keep people on a path that will serve the health.
Speaker Change: Of our citizens.
Speaker Change: As best it can.
Speaker Change: Okay. Thank you and thanks to everyone, who dialed in today for your interest in Regeneron, we apologize to those remaining in the Q&A queue, who we did not have a chance to hear from today.
Speaker Change: As always the Investor Relations team is available to answer any remaining questions. You may have thank you once again and have a great day.
Speaker Change: Thank you. This concludes the conference. Thank you for your participation you may now disconnect.
Speaker Change: Okay.
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