Analyst Conference Summary

Biotechnology

conference date: August 5, 2020 @ 5:30 AM Pacific Time
for quarter ending: June 30, 2020 (Q2, second quarter 2020)

Forward-looking statements

Overview: Strong revenue growth.

Basic data (GAAP):

Revenue was $1.95 billion, up 7% sequentially from $1.83 billion and up 24% from $1.58 billion in the year-earlier quarter.

Net income was $897 million, up 44% sequentially from $625 million, and up 365% from $193 million year-earlier.

Diluted Earnings Per Share (EPS) was $7.61, up 40% sequentially from $5.43 and up 353% from $1.68 year-earlier.

Guidance:

no change

Conference Highlights:

Leonard S. Schleifer, CEO, said "We have advanced REGN-COV2, our antibody cocktail for COVID-19, into late-stage clinical studies in record time and are working to ensure supply is available later this year. We are continuing to drive strong performance with our marketed medicines, including Eylea, Dupixent, and Libtayo, while also advancing research, development, and regulatory progress across a number of therapeutic areas including cancer, Type 2 inflammatory diseases, pain, and rare diseases."

Working with Sanofi, on April 1 finalized a modified antibody agreement for Praluent which is expected to be accretive in 2020. Also working on restructuring the Kevzara agreement.

In April 2020, the Company and Sanofi announced that the primary endpoint was met in the Phase 3 trial of Libtayo (cemiplimab), a PD-1 antibody, as monotherapy in first-line NSCLC. The Independent Data Monitoring Committee recommended that the trial be stopped early due to highly significant improvement in overall survival. Regulatory submissions will be made in the U.S. and EU in the second half of 2020. In May 2020, the Company and Sanofi announced that Libtayo demonstrated clinically meaningful and durable responses in a pivotal, single-arm, open-label trial in patients with advanced basal cell carcinoma and plan regulatory submissions in 2020.

In Q2 initiated clinical trials of REGN-COV2, its investigational two-antibody cocktail for the treatment and prevention of COVID-19. Following review from the Independent Data Monitoring Committee Phase 1 safety results, a Phase 3 trial to evaluate REGN-COV2's ability to prevent infection among uninfected people who have had close exposure to a COVID-19 patient was initiated and is being run jointly with NIAID. In addition, REGN-COV2 moved into the Phase 2/3 portion of two adaptive Phase 1/2/3 trials to treat hospitalized and non-hospitalized patients with COVID-19. The Company plans to report initial virology and biomarker results from the REGN-COV2 treatment trials in September 2020.

In the coming years expects to bring an extensive line of bispecific antibodies to the clinic. Believes has advantages over competitors for these, as well as for the PD1 antibody (Libtayo).

Revenue by type: product sales $ billion. Sanofi collaboration revenue $ million. Bayer collaboration revenue $ million. Other income $ million.

Non-GAAP results: net income $854 million, up 11% sequentially from $771 million and up 24% from $690 million year earlier. Diluted EPS $7.16, up 5% sequentially from $6.60 and up 19% from $6.02 year-earlier.

Fasinumab for pain due to osteoarthritis Phase 3 study reported positive results in Q3 2019. A Phase 3 study for chronic lower back pain continued. But moving forward only with the lower-dose regimen.

In Q1 2020 the FDA accepted for priority review the supplemental Biologics License Application (sBLA) for children aged 6 to 11 years with moderate-to-severe atopic dermatitis, with a target action (PDUFA) date of May 26, 2020. In March 2020, Dupixent for chronic rhinosinusitis with nasal polyposis (CRSwNP) was approved in Japan.

In March 2020, the Phase 3 trial in adult patients with homozygous familial hypercholesterolemia (HoFH) met its primary endpoint. Regeneron plans to submit an sBLA in mid-2020.

Has moved four bispecifics, to the clinic this year. REGN4018 (MUC16 and CD3) has shown encouraging results so far in platinum-resistant ovarian cancer.

Pozelimab, a C5 antibody, started a Phase 2 trial for CD55-deficit in 2020.

In April 2020, entered into an agreement with Zai Lab Limited to develop and commercialize REGN1979 (bispecific antibody targeting CD20 and CD3) in mainland China, Hong Kong, Taiwan, and Macau. Zai is obligated to make a $30 million up-front payment, with Regeneron eligible to receive up to $160 million in additional milestone payments. Zai will be responsible for funding a portion of the global development costs.

Working on antibody treatments for COVID-19.

In April 2019, Regeneron entered into a collaboration with Alnylam (ALNY) to discover, develop, and commercialize new RNA interference, or RNAi, therapeutics for diseases of the eye, central nervous system, and targets expressed in the liver.

See also the Regeneron Pipeline.

Cash and equivalents balance ended at $5.73 billion, down sequentially from $7.24 billion. $1.5 billion debt. Cash from operating activities was $943 million.

GAAP expenses of $1.30 billion consisted of: cost of goods sold $103 million; research and development $722 million; selling, general and administrative $348 million; collaboration manufacturing costs $173 million. Leaving income from operations of $656 million. Interest and other income was $263 million. Income tax was $22 million.

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