Regeneron Reports Second Quarter 2016 Financial and Operating Results
TARRYTOWN, N.Y., Aug. 4, 2016 /PRNewswire/ -- Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced financial results for the second quarter of 2016 and provided a business update.
Financial Highlights | |||||||||||
($ in millions, except per share data) | Three Months Ended | ||||||||||
2016 | 2015* | % Change | |||||||||
EYLEA U.S. net product sales | $ | 831 | $ | 655 | 27 | % | |||||
Total revenues | $ | 1,213 | $ | 999 | 21 | % | |||||
GAAP net income | $ | 196 | $ | 195 | 1 | % | |||||
GAAP net income per share - diluted | $ | 1.69 | $ | 1.69 | % | ||||||
Non-GAAP net income(2) | $ | 329 | $ | 265 | 24 | % | |||||
Non-GAAP net income per share - diluted(2) | $ | 2.82 | $ | 2.27 | 24 | % | |||||
* See Table 3 of this press release for an explanation of revisions made to 2015 non-GAAP amounts previously reported. | |||||||||||
"In the first half of this year, EYLEA continued to demonstrate strong sales growth, and Praluent sales made steady progress as healthcare providers become more familiar with this new therapeutic class and learn to navigate payer utilization management criteria," said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron. "In the second half of the year, for sarilumab in rheumatoid arthritis, we look forward to the upcoming U.S. regulatory decision and potential launch. We also recently completed a U.S. regulatory submission for dupilumab for the treatment of atopic dermatitis and are working to bring this breakthrough therapy to patients as soon as possible."
Business Highlights
Marketed Product Update
EYLEA® (aflibercept) Injection for Intravitreal Injection
- In the second quarter of 2016, net sales of EYLEA in the United States increased 27% to $831 million from $655 million in the second quarter of 2015. Overall distributor inventory levels remained within the Company's one- to two-week targeted range.
- Bayer commercializes EYLEA outside the United States. In the second quarter of 2016, net sales of EYLEA outside of the United States(1) were $486 million, compared to $338 million in the second quarter of 2015. In the second quarter of 2016, Regeneron recognized $167 million from its share of net profit from EYLEA sales outside the United States, compared to $107 million in the second quarter of 2015.
Praluent® (alirocumab) Injection for the Treatment of Elevated Low-Density Lipoprotein (LDL) Cholesterol
- In the second quarter of 2016, global net sales of Praluent were $24 million. Product sales for Praluent are recorded by Sanofi, and the Company shares in any profits or losses from the commercialization of Praluent. Praluent was launched in the United States in the third quarter of 2015 and in certain countries in the European Union commencing in the fourth quarter of 2015.
- In the second quarter of 2016, the U.S. Food and Drug Administration (FDA) accepted for review a supplemental Biologics License Application (sBLA) for a monthly dosing regimen of Praluent, with a target action date of January 24, 2017.
- In July 2016, the Japanese Ministry of Health, Labour and Welfare granted marketing and manufacturing authorization for Praluent for the treatment of uncontrolled LDL cholesterol, in certain adult patients with hypercholesterolemia at high cardiovascular risk.
- The ODYSSEY OUTCOMES trial remains ongoing, and is assessing the potential of Praluent to demonstrate cardiovascular benefit.
Pipeline Progress
Regeneron has fifteen product candidates in clinical development. These consist of EYLEA and fourteen fully human monoclonal antibodies generated using the Company's VelocImmune® technology, including four in collaboration with Sanofi. In addition to EYLEA and Praluent, highlights from the antibody pipeline include:
Sarilumab, the Company's antibody targeting IL-6R for rheumatoid arthritis, is currently being studied in the global Phase 3 SARIL-RA program.
- In December 2015, the FDA accepted for review a Biologics License Application (BLA) for sarilumab, with a target action date of October 30, 2016.
- In July 2016, the European Medicines Agency (EMA) accepted for review the Marketing Authorization Application (MAA) for sarilumab.
Dupilumab, the Company's antibody that blocks signaling of IL-4 and IL-13, is currently being studied in atopic dermatitis, asthma, nasal polyps, and eosinophilic esophagitis.
- A BLA for atopic dermatitis was recently submitted to the FDA.
- In April 2016, the Company and Sanofi reported that the Phase 3 LIBERTY AD SOLO 1 and SOLO 2 trials evaluating dupilumab in adult patients with inadequately controlled moderate-to-severe atopic dermatitis met their primary endpoints.
- In June 2016, the Company and Sanofi reported that the Phase 3 LIBERTY AD CHRONOS trial evaluating dupilumab with topical corticosteroids in adult patients with inadequately controlled moderate-to-severe atopic dermatitis met its primary and key secondary endpoints.
Fasinumab, the Company's antibody targeting Nerve Growth Factor (NGF), is currently being studied in patients with pain due to osteoarthritis (Phase 3) and chronic low back pain (Phase 2b/3).
- In May 2016, the Company reported top-line results from a Phase 2/3 study evaluating fasinumab in patients with moderate-to-severe osteoarthritis pain of the hip or knee who have a history of inadequate pain relief or intolerance to current analgesic therapies. The study met its primary endpoint at 16 weeks.
REGN2810, an antibody to programmed cell death protein 1 (PD-1), entered a potentially pivotal clinical study for the treatment of advanced cutaneous squamous cell carcinoma in the second quarter of 2016.
Evinacumab is an antibody to Angptl-3. In May 2016, the Company reported positive interim results from an ongoing proof-of-concept study in patients with homozygous familial hypercholesterolemia (HoFH).
REGN3470-3471-3479 is a combination of antibodies to Ebola virus. A Phase 1 clinical study in healthy volunteers was initiated in the second quarter of 2016. In addition, in the second quarter of 2016, the FDA granted orphan-drug designation to REGN3470-3471-3479 for the treatment of Ebola virus infection.
REGN2477 is an antibody to Activin A being developed for Fibrodysplasia Ossificans Progressiva (FOP). A Phase 1 clinical study was initiated in the second quarter of 2016 in healthy volunteers.
Select Upcoming 2016 Milestones
Clinical Programs | Milestones | |
REGN2176-3 (PDGFR-beta Antibody co-formulated with aflibercept) |
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Praluent |
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Sarilumab (IL-6R Antibody) |
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Dupilumab (IL-4R Antibody) |
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Business Development Update
- In April 2016, the Company and Intellia Therapeutics, Inc. entered into a license and collaboration agreement to advance CRISPR/Cas gene-editing technology for in vivo therapeutic development. In addition to the discovery, development and commercialization of new therapies, the companies will focus on technology development of the CRISPR/Cas platform. In May 2016, Intellia completed an initial public offering of its common stock and the Company purchased $50.0 million of Intellia common stock in a concurrent private placement.
- In July 2016, the Company and Adicet Bio, Inc. entered into a license and collaboration agreement to develop next-generation engineered immune-cell therapeutics with fully human chimeric antigen receptors and T-cell receptors directed to disease-specific cell surface antigens in order to enable the precise engagement and killing of tumor cells.
Second Quarter 2016 Financial Results
Product Revenues: Net product sales were $834 million in the second quarter of 2016, compared to $658 million in the second quarter of 2015. EYLEA net product sales in the United States were $831 million in the second quarter of 2016, compared to $655 million in the second quarter of 2015.
Total Revenues: Total revenues, which include product revenues described above, increased by 21% to $1,213 million in the second quarter of 2016, compared to $999 million in the second quarter of 2015. Total revenues also include Sanofi and Bayer collaboration revenues of $355 million in the second quarter of 2016, compared to $329 million in the second quarter of 2015. Collaboration revenues in the second quarter of 2016 increased primarily due to an increase in the Company's net profit from commercialization of EYLEA outside the United States and reimbursement of the Company's research and development expenses and amortization of up-front payments received in connection with the Company's July 2015 immuno-oncology collaboration with Sanofi, partly offset by lower reimbursement of the Company's research and development expenses and an increase in the Company's share of losses primarily from the commercialization of Praluent under the Company's antibody collaboration with Sanofi.
Refer to Table 4 for a summary of collaboration revenue.
Research and Development (R&D) Expenses: GAAP R&D expenses were $560 million in the second quarter of 2016, compared to $390 million in the second quarter of 2015. The higher R&D expenses in the second quarter of 2016 were principally due to the $75 million up-front payment made in connection with the April 2016 license and collaboration agreement with Intellia, higher development costs primarily related to fasinumab and REGN2810, and higher headcount to support the Company's increased R&D activities, partly offset by lower development costs primarily related to dupilumab. In addition, in the second quarter of 2016, R&D-related non-cash share-based compensation expense was $79 million, compared to $60 million in the second quarter of 2015.
Selling, General, and Administrative (SG&A) Expenses: GAAP SG&A expenses were $292 million in the second quarter of 2016, compared to $175 million in the second quarter of 2015.
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