On August 5, 2021 Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) reported financial results for the second quarter of 2021 and provided a business update (Press release, Regeneron, AUG 5, 2021, View Source [SID1234585898]).
Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:
Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing
Schedule Your 30 min Free Demo!
"Regeneron had outstanding performance in the second quarter during which we delivered to the U.S. government the entire order for our COVID-19 antibody cocktail and recognized record global sales from our EYLEA and Dupixent franchises," said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron. "We continue to advance Dupixent’s potential to help new patient groups, with recent positive Phase 3 data in chronic spontaneous urticaria and additional late-stage read-outs expected later this year in prurigo nodularis, eosinophilic esophagitis, and pediatric atopic dermatitis. With today’s positive Phase 3 results in combination with chemotherapy in non-small cell lung cancer, Libtayo yet again demonstrates its potential to be a leading checkpoint inhibitor. We also progressed our genetics medicines platform, with landmark clinical data alongside our collaborator Intellia using a CRISPR therapeutic and the discovery of a promising new obesity target from the Regeneron Genetics Center."
"Regeneron performed exceptionally well in the second quarter with the core business on a strong growth trajectory as we invest in our diverse and differentiated pipeline for long-term and sustainable growth," said Robert E. Landry, Executive Vice President, Finance and Chief Financial Officer of Regeneron.
Business Highlights
Key Pipeline Progress
Regeneron has approximately 30 product candidates in clinical development, including six marketed products for which it is investigating additional indications. Updates from the clinical pipeline include:
EYLEA (aflibercept) Injection
Enrollment in the Phase 3 studies for high-dose formulation in diabetic macular edema (DME) and neovascular age-related macular degeneration (wet AMD) was completed.
Enrollment in the Phase 3 study for retinopathy of prematurity (ROP) was also completed.
Dupixent (dupilumab)
The Company and Sanofi announced a Phase 3 trial in patients with moderate-to-severe chronic spontaneous urticaria (CSU) met its primary and all key secondary endpoints at 24 weeks. The trial showed that adding Dupixent to standard-of-care antihistamines significantly reduced itch and hives for biologic-naive patients, compared to antihistamines alone in the first of two trials of this clinical program.
In June 2021, the U.S. Food and Drug Administration (FDA) approved a 200 mg single-dose pre-filled pen for Dupixent.
REGEN-COVTM (casirivimab and imdevimab)(2), a dual antibody cocktail to SARS-CoV-2 virus
In the second quarter of 2021, the Company fulfilled its second agreement with the U.S. government to manufacture and deliver 1.25 million doses of REGEN-COV at the lowest treatment dose authorized by the FDA, and recognized $2.59 billion of REGEN-COV sales.
In June 2021, the FDA updated the REGEN-COV EUA by lowering the dose to 1,200 mg and permitting administration by subcutaneous injection when intravenous infusion is not feasible.
In July 2021, based on positive Phase 3 data announced in April 2021 which were recently published in the New England Journal of Medicine, the FDA also expanded the EUA to include post-exposure prophylaxis in people at high risk for progression to severe COVID-19, who are not fully vaccinated or are not expected to mount an adequate response to vaccination, and who have been exposed to a SARS-CoV-2 infected individual or are at high risk of exposure to an infected individual because of infection occurring in the same institutional setting (such as in nursing homes or prisons). For people who are not expected to mount an adequate immune response to vaccination, REGEN-COV can also now be administered monthly for the duration of ongoing exposure to SARS-CoV-2.
In July 2021, Japan’s Ministry of Health, Labour and Welfare (MHLW) approved the casirivimab and imdevimab antibody cocktail to treat patients with mild to moderate COVID-19, making Japan the first country to grant a full approval for the antibody cocktail.
Positive results were announced from the Phase 3 UK-based RECOVERY trial in hospitalized COVID-19 patients, demonstrating that adding REGEN-COV to usual care reduced the risk of death by 20% in seronegative patients (patients who had not mounted a natural antibody response on their own against SARS-CoV-2), compared to seronegative patients receiving usual care alone. The Company has requested that the EUA be further expanded to include appropriate hospitalized patients.
Libtayo (cemiplimab)
In June 2021, the European Commission (EC) approved Libtayo for the first-line treatment of patients with advanced non-small cell lung cancer (NSCLC).
In June 2021, the EC also approved Libtayo for the treatment of metastatic or locally advanced basal cell carcinoma (BCC).
In August 2021, the Company and Sanofi announced that the Phase 3 trial of Libtayo in combination with platinum-doublet chemotherapy was stopped early after meeting its overall survival primary endpoint in patients with advanced NSCLC. These data are planned to form the basis of regulatory submissions in the United States and European Union (EU).
Odronextamab, a CD20xCD3 bispecific antibody
The Company is resuming enrollment of patients with follicular lymphoma (FL) and diffuse large B-cell lymphoma (DLBCL), following amendment of trial protocols and the FDA’s lifting of the partial clinical hold, in its monotherapy trials of odronextamab.
Fianlimab, an antibody to LAG-3
Positive data from the Phase 1 trial in combination with Libtayo in advanced melanoma were presented at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting; the Company intends to initiate a Phase 3 study in 2022.
REGN1908-1909, a multi-antibody therapy to Fel d 1
The Company initiated a Phase 3 study in cat allergic asthmatics.
Genetics Medicines
Intellia Therapeutics, Inc. and the Company announced positive interim data from the Phase 1 study of NTLA-2001, a CRISPR/Cas9 therapeutic for TTR gene knockout in people living with hereditary transthyretin amyloidosis with polyneuropathy (ATTRv-PN). These are the first-ever clinical data supporting safety and efficacy of in vivo CRISPR genome editing in humans and provide proof of concept for the ongoing multi-target collaboration between the companies.
The Regeneron Genetics Center published their discovery of GPR75 gene mutations that protect against obesity. This target is the focus of a small molecule collaboration agreement with AstraZeneca announced in July 2021, under which the companies will equally share research and development costs and any potential future profits.
Corporate Updates
The Company intends to invest approximately $1.8 billion over six years to expand its research, preclinical manufacturing, and support facilities at the Company’s Tarrytown, New York campus.
Second Quarter 2021 Financial Results
Revenues
Total revenues increased by 163% to $5.139 billion in the second quarter of 2021, compared to $1.952 billion in the second quarter of 2020. Total revenues excluding (i) REGEN-COV (casirivimab and imdevimab) net product sales in the United States and (ii) the Company’s share of gross profits in connection with Roche’s sales of casirivimab and imdevimab outside the United States, increased by 22% to $2.379 billion in the second quarter of 2021, compared to the second quarter of 2020(1).
Net product sales of EYLEA in the United States increased in the second quarter of 2021, compared to the second quarter of 2020, primarily due to higher sales volume as well as a favorable comparison given the adverse impact of the COVID-19 pandemic on U.S. EYLEA demand during the second quarter of 2020.
The Company fulfilled its second agreement with the U.S. government and delivered 1.25 million doses of REGEN-COV. Other than $34 million of expected REGEN-COV net product sales in the third quarter of 2021 related to this agreement, the Company does not anticipate recording any additional net product sales of REGEN-COV in the United States during the third quarter of 2021. U.S. net product sales of REGEN-COV in the fourth quarter of 2021 will be dependent upon acceleration of COVID-19 cases and related drug utilization.
Total revenues also include collaboration revenues(3) of $955 million in the second quarter of 2021, compared to $513 million in the second quarter of 2020. Sanofi collaboration revenue increased primarily due to the Company’s share of profits from commercialization of antibodies, which were $328 million in the second quarter of 2021, compared to $172 million in the second quarter of 2020. The change in the Company’s share of profits from commercialization of antibodies was driven by higher Dupixent profits. In the second quarter of 2021, the Company also recorded Roche collaboration revenue of $168 million in connection with the Company’s share of gross profits from Roche’s sales of the casirivimab and imdevimab antibody cocktail outside the United States.
Refer to Table 4 for a summary of collaboration revenue.
Other revenue decreased in the second quarter of 2021, compared to the second quarter of 2020, primarily due to lower amounts recognized in connection with the Company’s agreements with the Biomedical Advanced Research Development Authority (BARDA) related to funding of certain development activities for antibodies for the treatment of COVID-19.
GAAP R&D expenses in the second quarter of 2020 included $85 million in up-front payments in connection with the collaboration agreement with Intellia. The decrease in GAAP R&D expenses in the second quarter of 2021 was offset primarily by higher costs incurred in connection with development activities related to REGEN-COV, which also drove the increase in non-GAAP R&D expenses.
The increase in GAAP and non-GAAP SG&A expenses in the second quarter of 2021 was primarily due to higher headcount-related costs, an increase in commercialization-related expenses for EYLEA and Libtayo, and costs associated with educational campaigns related to COVID-19.
The increase in COGS in the second quarter of 2021 was primarily due to the recognition of manufacturing costs in connection with product sales of REGEN-COV in the United States. In addition, the Company recognized higher inventory write-offs and reserves in the second quarter of 2021, compared to the second quarter of 2020.
Other operating (income) expense, net, includes recognition of a portion of amounts previously deferred in connection with up-front and development milestone payments, as applicable, received in connection with the Company’s collaborative arrangements.
Other Financial Information
GAAP other income (expense), net, includes the recognition of net unrealized and realized gains on equity securities of $409 million in the second quarter of 2021, compared to $228 million in the second quarter of 2020.
In the second quarter of 2021, the Company’s GAAP effective tax rate was 17.4%, compared to 2.4% in the second quarter of 2020. The increase in the second quarter 2021 GAAP effective tax rate, compared to the second quarter of 2020, was primarily due to the significant positive impact of stock-based compensation in the second quarter of 2020. In the second quarter of 2021, the non-GAAP effective tax rate was 17.0%, compared to 0.9% in the second quarter of 2020.
GAAP net income per diluted share was $27.97 in the second quarter of 2021, compared to GAAP net income per diluted share of $7.61 in the second quarter of 2020. Non-GAAP net income per diluted share was $25.80 in the second quarter of 2021, compared to non-GAAP net income per diluted share of $7.16 in the second quarter of 2020. A reconciliation of the Company’s GAAP to non-GAAP results is included in Table 3 of this press release.
Net cash provided by operating activities in the first half of 2021 was $1.295 billion, compared to $1.641 billion in the first half of 2020, resulting in $1.031 billion in free cash flow for the first half of 2021, compared to $1.341 billion for the first half of 2020. The Company expects a significant increase in free cash flow in the third quarter of 2021 as the Company collected all amounts due from the U.S. government in connection with second quarter 2021 REGEN-COV sales in July 2021.
2021 Financial Guidance(4)
Conference Call Information
Regeneron will host a conference call and simultaneous webcast to discuss its second quarter 2021 financial and operating results on Thursday, August 5, 2021, at 8:30 AM Eastern Time. To access this call, dial (888) 660-6127 (U.S.) or (973) 890-8355 (International), conference ID 9098036. A link to the webcast may be accessed from the "Investors and Media" page of Regeneron’s website at www.regeneron.com. A replay of the conference call and webcast will be archived on the Company’s website and will be available for at least 30 days.