TARRYTOWN, N.Y., Feb. 18 /PRNewswire-FirstCall/ -- Regeneron Pharmaceuticals, Inc. today announced financial and operating results for the full year and fourth quarter of 2009. The Company reported a net loss of $67.8 million, or $0.85 per share (basic and diluted), for the year ended December 31, 2009 compared with a net loss of $79.1 million, or $1.00 per share (basic and diluted), for the year ended December 31, 2008. The Company reported a net loss of $36.5 million, or $0.46 per share (basic and diluted), for the fourth quarter of 2009 compared with a net loss of $29.5 million, or $0.37 per share (basic and diluted), for the fourth quarter of 2008.
“Regeneron ended 2009 with many late-stage Phase 3 trials, a diversified pipeline, and a healthy balance sheet,” said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer. “Our eight drug candidates in development for 17 indications and our expanded antibody collaboration with sanofi-aventis position the Company for continued growth. 2010 should be especially eventful for Regeneron as we anticipate, among other clinical results, Phase 3 data from two of our four trials in gout and from our two studies in wet AMD (age-related macular degeneration), as well as potential interim news from our Phase 3 cancer program.”
ARCALYST(R) (rilonacept) - CAPS
The Company shipped $20.0 million of ARCALYST(R) (rilonacept) Injection for Subcutaneous Use to its distributors in 2009, including $5.0 million in the fourth quarter, for the treatment of Cryopyrin-Associated Periodic Syndromes (CAPS), including Familial Cold Auto-inflammatory Syndrome (FCAS) and Muckle-Wells Syndrome (MWS) in adults and children 12 and older in the United States. This compares to shipments of $10.7 million in 2008, including $4.0 million in the fourth quarter of 2008. CAPS is a group of rare, inherited, auto-inflammatory conditions characterized by life-long, recurrent symptoms of rash, fever/chills, joint pain, eye redness/pain, and fatigue. In October, rilonacept was approved under exceptional circumstances by the European Medicines Agency (EMEA) for the treatment of CAPS with severe symptoms in adults and children aged 12 years and older. Rilonacept is not currently marketed in the European Union. ARCALYST is a fusion protein that blocks the cytokine interleukin-1 (IL-1).
VEGF Trap-Eye - Ophthalmologic Diseases
VEGF Trap-Eye is a specially purified and formulated form of VEGF Trap for use in the intraocular treatment of retinal diseases. VEGF Trap-Eye blocks vascular endothelial growth factor A (VEGF-A), a secreted protein which promotes the growth of blood vessels. It also binds other mediators of angiogenesis, including VEGF-B and Placental Growth Factor (PlGF). VEGF Trap-Eye is being developed by Regeneron in collaboration with Bayer HealthCare. Bayer HealthCare has rights to market VEGF Trap-Eye outside the United States, where the companies will share equally in profits from any future sales of VEGF Trap-Eye. Regeneron maintains exclusive rights to VEGF Trap-Eye in the United States.
In a separate press release issued today, Regeneron and Bayer HealthCare announced that in a Phase 2 study (called DA VINCI) in patients with clinically significant diabetic macular edema (DME), VEGF Trap-Eye achieved the primary study endpoint, a statistically significant improvement in visual acuity over 24 weeks compared to focal laser therapy, the standard of care in DME. VEGF Trap-Eye was generally well-tolerated, and no ocular or non-ocular drug-related serious adverse events were reported in the study.
In addition, a Phase 2 study (AFFIRM) is evaluating aflibercept as a 1st line treatment for metastatic colorectal cancer in combination with FOLFOX (folinic acid (leucovorin), 5-fluorouracil, and oxaliplatin). The AFFIRM study is approximately 75 percent enrolled.
REGN475, an antibody to nerve growth factor (NGF), is being evaluated in Phase 2 studies in osteoarthritis of the knee, sciatic pain, vertebral fracture pain, chronic pancreatitis pain, and thermal injury pain.
REGN421, an antibody to Delta-like ligand-4 (Dll4), a novel anti-angiogenesis target, is in a Phase 1 study in patients with advanced malignancies.
REGN668, an antibody to the interleukin-4 receptor (IL-4R), a target for allergic and immune conditions, is in a Phase 1 study.
Revenues
Total revenues increased to $96.8 million in the fourth quarter of 2009 from $55.8 million in the same quarter of 2008 and increased to $379.3 million for the full year 2009 from $238.5 million for the full-year 2008. The Company’s revenue was comprised of collaboration revenue, technology licensing revenue, net product sales, and contract research and other revenue.
Sanofi-aventis’ reimbursement of Regeneron’s expenses under the antibody collaboration increased for the three months and year ended December 31, 2009, compared to the same periods in 2008, due to an increase in research activities and increases in development activities for antibody candidates in clinical development.
In periods when the Company recognizes VEGF Trap-Eye development expenses that the Company incurs under the collaboration with Bayer HealthCare, the Company also recognizes, as contract research and development revenue, the portion of those VEGF Trap-Eye development expenses that is reimbursable by Bayer HealthCare. Cost-sharing of the Company’s VEGF Trap-Eye development expenses with Bayer HealthCare increased for the three months and year ended December 31, 2009, compared to the same periods in 2008. Under the terms of the collaboration, in 2009, all agreed-upon VEGF Trap-Eye development expenses incurred by Regeneron and Bayer HealthCare under a global development plan were shared equally. In 2008, the first $70.0 million of agreed-upon VEGF Trap-Eye development expenses were shared equally, and the Company was solely responsible for up to the next $30.0 million. During the fourth quarter of 2008, Regeneron was solely responsible for most of the collaboration’s VEGF Trap-Eye development expenses, which reduced the amount of cost-sharing revenue the Company earned from Bayer HealthCare in 2008. In addition, cost-sharing revenue increased in 2009, compared to 2008, due to higher clinical development costs in connection with the collaboration’s clinical development programs in wet AMD, DME, and CRVO. In July 2009, the Company received a $20.0 million milestone payment from Bayer HealthCare in connection with the dosing of the first patient in a Phase 3 trial of VEGF Trap-Eye in CRVO, which was recognized as collaboration revenue for the year ended December 31, 2009.
Net Product Sales
Revenue and deferred revenue from product sales are recorded net of applicable provisions for prompt pay discounts, product returns, estimated rebates payable under governmental programs (including Medicaid), distributor fees, and other sales-related costs. For the three months and year ended December 31, 2009, the Company recognized as revenue $5.0 million and $18.4 million of ARCALYST(R) (rilonacept) net product sales, respectively, for which the right of return no longer exists and rebates can be reasonably estimated, compared to $3.5 million and $6.3 million for three months and year ended December 31, 2008. At December 31, 2009 and 2008, deferred revenue related to ARCALYST net product sales totaled $4.8 million and $4.0 million, respectively.
Research and development (R&D) expenses increased to $118.8 million in the fourth quarter of 2009 from $74.6 million in the comparable quarter of 2008, and to $398.8 million for the full year 2009 from $274.9 million in 2008. In the fourth quarter and full year of 2009, the Company incurred higher R&D costs primarily related to additional R&D headcount, clinical development costs for rilonacept, VEGF Trap-Eye, and monoclonal antibodies, research and preclinical development costs associated with the antibody programs, and facility-related costs to support expanded R&D activities.
Other Income and Expense
Investment income decreased to $0.6 million in the fourth quarter of 2009 from $2.6 million in the comparable quarter of 2008 and to $4.5 million for the full year 2009 compared to $18.2 million for the full year 2008. The decrease in investment income was due to lower yields on, and lower balances of, cash and marketable securities in 2009 compared to 2008.
Income Tax (Benefit) Expense
In the fourth quarter of 2009, the Company recognized a $4.1 million income tax benefit, consisting primarily of (i) $2.7 million from a provision in the Worker, Homeownership, and Business Assistance Act of 2009 that allows the Company to claim a refund of the U.S. federal alternative minimum tax that the Company paid in 2008 and (ii) $0.7 million from a provision in the American Recovery and Reinvestment Act of 2009 that allows the Company to claim a refund for a portion of its unused pre-2006 research tax credits.
Revision of Previously Issued Financial Statements
The Company has revised its financial statements at December 31, 2008 and for the three months and year ended December 31, 2008 in connection with the application of authoritative guidance issued by the Financial Accounting Standards Board (FASB) to the Company’s December 2006 lease, as amended, of laboratory and office facilities in Tarrytown, New York. The revisions consisted entirely of non-cash adjustments, primarily to the Company’s balance sheet at December 31, 2008, and had no impact to the Company’s business operations, existing capital resources, or the Company’s ability to fund its operating needs, including the development of its product candidates. The revisions, and a description of the basis for the revisions, are more fully described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.
This news release discusses historical information and includes forward-looking statements about Regeneron and its products, development programs, finances, and business, all of which involve a number of risks and uncertainties, such as risks and timing associated with preclinical and clinical development of Regeneron’s drug candidates, determinations by regulatory and administrative governmental authorities which may delay or restrict Regeneron’s ability to continue to develop or commercialize its product and drug candidates, competing drugs that are superior to Regeneron’s product and drug candidates, uncertainty of market acceptance of Regeneron’s product and drug candidates, unanticipated expenses, the availability and cost of capital, the costs of developing, producing, and selling products, the potential for any collaboration agreement, including Regeneron’s agreements with the sanofi-aventis Group and Bayer HealthCare, to be canceled or to terminate without any product success, risks associated with third party intellectual property, and other material risks. A more complete description of these and other material risks can be found in Regeneron’s filings with the United States Securities and Exchange Commission (SEC), including its Form 10-K for the year ended December 31, 2009. Regeneron does not undertake any obligation to update publicly any forward-looking statement, whether as a result of new information, future events, or otherwise unless required by law.
CONTACT: Peter Dworkin, Investor Relations, +1-914-345-7640,
peter.dworkin@regeneron.com, or Laura Lindsay, Media Relations,
+1-914-345-7800, laura.lindsay@regeneron.com
Web site: http://www.regeneron.com/
