Analyst Conference Summary

Biotechnology

conference date: May 4, 2023 @ 5:30 AM Pacific Time
for quarter ending: March 31, 2023 (Q1, first quarter 2022)

Forward-looking statements

Overview: Revenue grew y/y, but earnings declined.

Basic data (GAAP):

Revenue was $3.16 billion, down 7% sequentially from $3.41 billion but up 7% from $2.97 billion in the year-earlier quarter.

Net income was $818 million, down 32% sequentially from $1.20 billion, and down 16% from $974 million year-earlier.

Diluted Earnings Per Share (EPS) was $7.17, down 32% sequentially from $10.50 and down 17% from $8.61 year-earlier.

Guidance:

Updated 2023 guidance: GAAP R&D increased to $4.225 to $4.465 billion. GAAP SG&A increased to $2.49 to $2.68 billion. Cap ex decreased to $800 to $900 million. Tax rates lowere: GAAP 8% to 10%, non-GAAP 10% to 12%.

Conference Highlights:

Leonard S. Schleifer, CEO, said "In the first quarter of 2023, we achieved six FDA and EC approvals across five products, allowing our homegrown medicines to reach even more patients around the world, while we also continued to grow revenue. We remain focused on advancing our robust pipeline at all stages, and we were pleased to announce positive data from a late-stage study of Dupixent in COPD and make continued progress with our costimulatory and bispecific antibody candidates in oncology"

Pushing the idea that giving Eylea at an increased, 8 mg dose, at longer (12 to 16 week) intervals, will extend the lifetime of revenue, despite expiring patents and biosimilar competition. 8 mg dose has not yet been approved, but trial data released in Q3 2022 is encouraging. A BLA was filed in December 2022 with a priority review voucher. Sees a potential FDA approval around August 2023. In December 2022, the European Commission approved Eylea for the treatment of retinopathy of prematurity in preterm infants. The sBLA is currently under review by the FDA, with a PDUFA of February 11, 2023.

There are a large number of data readouts ahead in the cancer pipeline programs over the next two years. The first FDA submissions, for Linvoseltamab and Odreonextamab, could come in 2023.

Pozelimab for CD55-deficient protein-losing enteropathy could have the BLA submitted to the FDA within 12 months (so end of 2023).

Dupixent was approved in Europe in December 2022 for prurigo nodularis, and in January 2023 for EoE. The CHMP recommended it for children with severe atopic dermatitis. In the US in Q4 an sBLA for chronic spontaneous urticaria was submitted to the FDA.

In Q1 the FDA approved the sBLA for Evkeeza (evinacumab) as an adjunct to other lipid-lowering therapies to treat children aged 5 to 11 years with homozygous familial hypercholesterolemia.

In Q4 2022 A BLA for pozelimab, an antibody to C5, for the treatment of CD55-deficient protein-losing enteropathy (CHAPLE) was submitted to the FDA.

The FDA approved the sBLA for Kevzara (sarilumab) to treat polymyalgia rheumatica, in February, 2023.

Future growth will be fueled by the breadth and depth of the pipeline. Genetic medicines portfolio pipeline has high potential future value.

Regeneron continued to advance its bispecific antibodies for cancers in early stage trials.In all it has 30 product candidates in clinical development.

Revenue by type: product sales $1.67 billion. Collaboration revenue $1.38 billion. Other income $116 million.

Non-GAAP results: net income $1.17 billion, down 19% sequentially from $1.45 billion and down 11% from $1.32 billion year earlier. Diluted EPS $10.09, down 20% sequentially from $12.56 and down 12% from $11.49 year-earlier.

Two cohorts of a pivotal Phase 2 trial studying odronextamab in patients with relapsed/refractory diffuse large B-cell lymphoma (DLBCL) and follicular lymphoma reported positive data in December 2022.

Regeneron now has about 35 therapies in clinical development.

See also the Regeneron Pipeline.

Cash and equivalents balance ended at $ billion, up sequentially from $14.3 billion. $2 billion long-term debt. Cash from operations was $ billion, free cash flow $ billion. $ million shares repurchased in the quarter.

GAAP expenses of $2.12 billion consisted of: cost of goods sold $208 million; research and development $1.10 billion; selling, general and administrative $601 million; collaboration manufacturing costs $249 million; other operating income $0.5 million. Leaving income from operations of $947 million. Other expense was $89 million. Income tax was $40 million.

Q&A selective summary:

not available at this time

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