Analyst Conference Summary

Biotechnology

conference date: October 31, 2024 @ 5:30 AM Pacific Time
for quarter ending: September 30, 2024 (Q3, third quarter 2024)

Forward-looking statements

Overview: Continued strong revenue growth.

Basic data (GAAP):

Revenue was $3.72 billion, up 5% sequentially from $3.55 billion and 11% from $3.36 billion in the year-earlier quarter.

Net income was $1.34 billion, down 6% sequentially from $1.43 billion, and up 33% from $1.01 billion year-earlier.

Diluted Earnings Per Share (EPS) was $11.54, down 7% sequentially from $12.41 and up 30% from $8.89 year-earlier.

Guidance:

Updated 2024 full year guidance: increased spend, decreased cap ex, no net income or EPS estimates.

Conference Highlights:

Leonard S. Schleifer, CEO, said "Regeneron had a strong third quarter marked by 11% revenue growth. We continued to deepen the impact of our commercialized medicines this quarter, with ongoing leadership for our retinal franchise, expanded global reach of Libtayo, and notable growth from Dupixent. Over one million patients around the globe are currently being treated with Dupixent, with more to come following the approvals for COPD in the U.S., Europe and China. Our remarkably diverse clinical portfolio now includes approximately 40 product candidates and many pivotal studies underway. We continue to invest in the world-class research and development engine that drives our scientific and clinical productivity, with data expected over the next twelve months in diseases as varied as non-small cell lung cancer, thrombosis, retinal vein occlusion, severe allergy, COPD, melanoma, and obesity."

Dupixent sales grew 23% in Q3 2024. For Chronic rhinosinusitis with nasal polyps in adolescents was granted FDA approval in September 2024. FDA approved for COPD in September 2024. Already approved in EU for COPS.

Competition is increasing in the anti-VEGF eyecare space. But HD is differentiated from other products.

In September 2024, the FDA approved Dupixent as an add-on maintenance treatment for adults with inadequately controlled COPD and an eosinophilic phenotype. Also FDA approved Dupixent as an add-on maintenance treatment for adolescents aged 12 to 17 years with inadequately controlled chronic rhinosinusitis with nasal polyposis (CRSwNP). The EMA recommended Dupixent for children with eosinophic esophagitis.

In August 2024, the EC approved Ordspono (odronextamab) to treat adult patients with R/R follicular lymphoma or R/R diffuse large B-cell lymphoma (DLBCL) after two lines of systemic therapy.

In Q3 2024 Regeneron started a Phase 3 study for pozelimab, an antibody to C5, in combination with cemdisiran, an siRNA therapy, in geographic atrophy.

Linvoseltamab for multiple myeloma. PDUFA was August 22, 2024, but received a CLR (complete response letter) in August due to a manufacturing issue. A Phase 3 confirmatory trial is enrolling patients. Odronextamab for NHL Phase 3 trial is underway. A BLA for odronextamab for FL and DLBCL had CRLs issued for both indications in March 2024. The only issue cited was the enrollment status of confirmatory trials. It is also in review in the EU.

Itepekimab anti IL-33 for COPD in former smokers is in two Phase 3 trials with results expected 2H 2025.

Phase 2 obesity trial underway combining semaglutide with and without garetosmab is underway, hoping for better weight loss with muscle retention.

Regeneron is testing several potential cancer agents, including in combo with Libtayo and 8 different bispecifics, plus one CAR-T therapy.

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

Revenue by type: product sales $1.95 billion. Collaboration revenue $1.65 billion (includes Sanofi Dupixent sales), including Dupixent sold by Sanofi. Other income $114 million.

Non-GAAP results: net income $1.46 billion, up 8% sequentially from $1.35 billion and up 10% from $1.33 billion year earlier. Diluted EPS $12.46, up 8% sequentially from $ 11.56 and up 8% from $11.59 year-earlier.

See also the Regeneron Pipeline.

Cash and equivalents balance ended at $18.3 billion, up sequentially from $17.5 billion. $2 billion long-term debt. Cash from operations was $na billion, free cash flow $na billion. $738 million was used for shares repurchased in the quarter.

GAAP expenses of $2.54 billion consisted of: cost of goods sold $262 million; research and development $1.27 billion; acquired in-process R&D $56 million; selling, general and administrative $714 million; collaboration manufacturing costs $229 million; other operating expense $8 million. Leaving income from operations of $1.18 billion. Other income was $313 million. Income tax $152 million.

Q&A selective summary:

Eylea v. Amgen biosimilar launch? Conversions to HD, pricing? Eylea are comfortable with Eylea. However, we are working to convert patients to HD. The biosimilar is for Eylea, not for Eylea HD. We believe we can compete well.

We did see an Eylea inventory matter in the quarter, about $40 million. We are confident in HD performance, but that inventory will be used in Q4. The prefilled HD injection will help, mid 2025. We think our needle is better than our competitors, which may lead to inflamation. Avastin removal from the market has not yet resulted in more Eylea uptake, but the stock will run out in a few weeks.

Factor 11 program? One is a complete factor 12 blocker, so a milder safety profile. The catalytic domain antibody should be the best for Factor 11. So parallel, but differentiated, approaches. Could use in multiple indications. It should also compete with small molecules, which often have off-target effects. But we have to wait for data.

Eylea HD pricing pressures? It has an impact on all products in the category. The most-often-prescribed product should allow us to compete successfully. The category is growing mid-single digits each year. The pricing pressure is more on Eylea than on HD.

Obesity study changes? We added additional dosing arms. Looking for muscle enhancement. Just looking for more information. We could do that because we saw no safety issues with healthy volunteers. Note when you preserve muscles you burn more calories so you can get more weight loss.

OpenIcon Analyst Conference Summaries Main Page

Search

More Analyst Conference Pages: