Calls for Regeneron to step up dealmaking have intensified as the company has established an $18 billion cash pile and suffered clinical trial setbacks.
Regeneron has denied an “aversion” to M&A after analysts questioned executives’ decision to largely stay on the sidelines amid a surge in dealmaking activity at larger pharma peers.
On a second-quarter earnings call Thursday, a Raymond James analyst asked Regeneron to explain its “aversion to M&A” as a main use of cash at a time when the company’s war chest “will be accelerating pretty meaningfully” from a base of almost $18 billion today. Regeneron CEO Leonard Schleifer denied this sentiment, stating that his aversion is only to overpaying for acquisition targets.
“We have been involved in many of these interested transactions and we have seen people pay far more than we think the value would justify,” Schleifer said. “We are not allergic to any external opportunity. We look at them all, but we are pretty disciplined in trying to create value with these transactions.”
Regeneron could strike small or large deals, Schleifer said, but either way the terms have to “make sense and make money for our shareholders over the long term.” The CEO was speaking shortly after BMO Capital Markets analysts published a note responding to Regeneron’s second-quarter earnings report, titled “Time to Deal? Financial Strength & Flexibility Make Now the Time.”
“Larger M&A would come from strength, not desperation,” the analysts said. BMO’s call for the company to strike a larger deal reflects significant cash reserves, financial flexibility and recent R&D setbacks. In the past 14 months, Regeneron has reported the failure of itepekimab in one of two chronic obstructive pulmonary disease trials and fianlimab in melanoma.
The company’s ability to buy its way out of the problems created by the Phase 3 failures could increase in the coming quarters. As of the end of June, Regeneron had fully reimbursed Sanofi for the development costs that had been incurred by the French partner. Regeneron reimbursed Sanofi $929.7 million last year. Having paid off the remaining $595 million in the first half of 2026, Regeneron has freed itself of a drain on its cash.
Regeneron’s revenue from the Sanofi collaboration increased 51% to nearly $2.2 billion in the second quarter. Global net sales of Dupixent, the partners’ multi-indication juggernaut, increased 38% to an all-time high of $6 billion. Regeneron also reported record quarterly sales for eye disease drug Eylea HD in the U.S. and checkpoint inhibitor Libtayo globally.
While Dupixent is going from strength to strength, Regeneron faced questions about other aspects of the Sanofi partnership. In a Thursday note to investors, Truist Securities named building trust in the Sanofi relationship as one of the areas they wanted information on going into Regeneron’s earnings call. The biotech on its investor call reported early talks with Sanofi about an alliance that reflects changes since they first partnered.
“We were quite a different company. The rules of the game were a little bit different,” Schleifer said, referring to Regeneron’s status when the original partnership was struck in 2003. “We have to, I think, get together and be open-minded, and ... have a relationship that reflects where the companies are now. I’m cautiously optimistic that we can get there.”
