FORM 8-K |
REGENERON PHARMACEUTICALS, INC. | ||
(Exact Name of Registrant as Specified in Charter) | ||
New York | 000-19034 | 13-3444607 |
(State or other jurisdiction | (Commission | (IRS Employer |
of Incorporation) | File No.) | Identification No.) |
777 Old Saw Mill River Road, Tarrytown, New York 10591-6707 | ||
(Address of principal executive offices, including zip code) | ||
(914) 847-7000 | ||
(Registrant's telephone number, including area code) | ||
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |
Date: February 11, 2014 | REGENERON PHARMACEUTICALS, INC. | ||
By: | /s/ Joseph J. LaRosa | ||
Name: | Joseph J. LaRosa | ||
Title: | Senior Vice President, General Counsel and Secretary |
Number | Description |
99.1 | Press Release, dated February 11, 2014, Reporting Fourth Quarter and Full Year 2013 Financial and Operating Results. |
• | Fourth quarter 2013 EYLEA® (aflibercept) Injection global net sales were $586 million, consisting of $402 million in the U.S. and $184 million in rest of world(1) |
• | Full year 2013 EYLEA global net sales were $1.881 billion, consisting of $1.409 billion in the U.S. and $472 million in rest of world(1) |
• | Fourth quarter 2013 non-GAAP net income(2) was $259 million or $2.24 per diluted share. Full year 2013 non-GAAP net income(2) was $935 million or $8.17 per diluted share. |
• | Estimated full year 2014 EYLEA U.S. net sales are approximately $1.7 - $1.8 billion |
Financial Highlights | ||||||||||||||||||||||
($ in millions, except per share data) | Three months ended December 31, | Year ended December 31, | ||||||||||||||||||||
2013 | 2012 | % Change | 2013 | 2012 | % Change | |||||||||||||||||
EYLEA U.S. net product sales | $ | 402 | $ | 276 | 46 | % | $ | 1,409 | $ | 838 | 68 | % | ||||||||||
Total revenues | $ | 610 | $ | 415 | 47 | % | $ | 2,105 | $ | 1,378 | 53 | % | ||||||||||
Non-GAAP net income | $ | 259 | $ | 171 | 51 | % | $ | 935 | $ | 530 | 76 | % | ||||||||||
Non-GAAP net income per share - diluted | $ | 2.24 | $ | 1.47 | 52 | % | $ | 8.17 | $ | 4.66 | 75 | % | ||||||||||
GAAP net income | $ | 97 | $ | 470 | (79 | %) | $ | 424 | $ | 750 | (43 | %) | ||||||||||
GAAP net income per share - diluted | $ | 0.86 | $ | 4.08 | (79 | %) | $ | 3.81 | $ | 6.75 | (44 | %) | ||||||||||
• | In the fourth quarter of 2013, net sales of EYLEA in the United States were $402 million, compared to $276 million in the fourth quarter of 2012. For the full year 2013, net sales of EYLEA in the United States were $1.409 billion, compared to $838 million for the full year 2012. |
• | Bayer HealthCare commercializes EYLEA outside the United States for the treatment of neovascular age-related macular degeneration (wet AMD) and macular edema following central retinal vein occlusion (CRVO). In the fourth quarter, net sales of EYLEA outside of the United States(1) were $184 million and $472 million for the full year 2013, compared to $19 million in both the fourth quarter and full year 2012. In the fourth quarter of 2013, Regeneron recognized $44 million from its share of net profit from EYLEA sales outside the United States, after repayment of $15 million in development expenses. For the full year 2013, Regeneron recognized $102 million from its share of net profit from EYLEA sales outside the United States, after repayment of $58 million in development expenses. |
• | During the fourth quarter of 2013, the Company submitted a supplemental BLA for U.S. regulatory approval of EYLEA in diabetic macular edema (DME); the target date for an FDA decision on the supplemental BLA is August 18, 2014. An application for marketing approval in the European Union for DME was also submitted in the fourth quarter of 2013. |
• | In February 2014, the Company reported positive two year results from the Phase 3 VISTA-DME trial for the treatment of DME. |
• | In October 2013, the Company reported positive top-line results from the Phase 3 VIBRANT trial for the treatment of macular edema following branch retinal vein occlusion (BRVO). These results were presented during the annual meeting of the American Academy of Ophthalmology (AAO) held in November 2013 in New Orleans. |
• | An application for regulatory approval of EYLEA in myopic choroidal neovascularization (mCNV) was submitted in Japan in the fourth quarter of 2013. |
• | ZALTRAP is currently approved in over 30 countries, including the United States and in the European Union, for treatment, in combination with 5-fluorouracil, leucovorin, irinotecan (FOLFIRI), of patients with metastatic colorectal cancer that is resistant to or has progressed following an oxaliplatin-containing regimen. Marketing authorization applications for ZALTRAP are currently under review by additional regulatory agencies outside the United States. |
• | ZALTRAP net product sales commenced in the United States in August 2012 and in Europe in the first quarter of 2013. In the fourth quarter of 2013, Sanofi's worldwide net sales of ZALTRAP were $20 million, compared to $23 million in the fourth quarter of 2012. Sanofi's worldwide net sales of ZALTRAP were $70 million for the full year of 2013, compared to $32 million for the full year of 2012. |
• | Regeneron has fourteen fully human monoclonal antibodies based on the Company's VelocImmune® technology in clinical development, including seven in collaboration with Sanofi. |
• | Alirocumab: Two trials of alirocumab dosed every four weeks, ODYSSEY CHOICE I and CHOICE II, were initiated during the fourth quarter of 2013 and the first quarter of 2014, respectively. All of the alirocumab trials in the ODYSSEY program with every two week dosing are fully enrolled with the exception of the 18,000 patient ODYSSEY OUTCOMES study. In October 2013, positive top-line results were reported from the Phase 3 ODYSSEY MONO trial. These were the first Phase 3 data to be reported from the PCSK9 inhibitor class of investigational drugs. Data from additional Phase 3 trials are expected to be available in mid-2014. Alirocumab, an antibody targeting PCSK9 to reduce LDL cholesterol, is being developed in collaboration with Sanofi. |
• | Sarilumab: In November 2013, it was announced that in the SARIL-RA-MOBILITY Phase 3 clinical trial in adult patients with active rheumatoid arthritis who were inadequate responders to methotrexate (MTX) therapy, sarilumab treatment in combination with MTX improved disease signs and symptoms as well as physical function, and inhibited progression of joint damage. Additionally, a Phase 2 study, SARIL-NIU-SATURN, in non-infectious uveitis was initiated in the fourth quarter of 2013. Sarilumab, the first fully-human monoclonal antibody to IL-6R, is being developed in collaboration with Sanofi. |
• | PDGFR-beta Antibody: In January 2014, the Company entered into a license and collaboration agreement with Bayer HealthCare governing the joint development and commercialization outside the United States of an antibody product candidate (REGN2176) to Platelet Derived Growth Factor Receptor Beta (PDGFR-beta), including in combination with EYLEA, for the treatment of ocular diseases and disorders. In February 2014, the Company initiated a Phase 1 trial of REGN2176 in combination with EYLEA for the treatment of wet AMD. Under the agreement, the Company will conduct the initial development of REGN2176 in combination with EYLEA through completion of the first proof-of-concept study, upon which Bayer HealthCare will have a right to opt-in to the collaboration for further development and commercialization. If Bayer HealthCare opts-in, they will have exclusive commercialization rights to the combination product outside the United States where they will share profits from sales equally with Regeneron. Within the United States, Regeneron has exclusive commercialization rights and will retain 100% of the profits from sales. |
• | In January 2014, the Company announced the launch of a new human genetics initiative via a wholly owned subsidiary, Regeneron Genetics Center LLC (RGC). RGC will perform sequencing and genotyping to generate de-identified genomic data. The objective of RGC is to expand the use of human genetics for discovering and validating genetic factors that cause or influence a range of diseases where there are major unmet medical needs. The hope is to improve all aspects of the drug discovery and development process. In January 2014, the Company also announced that RGC and Geisinger Health System, one of the largest integrated health systems in the United States serving approximately 3 million residents, entered into a research collaboration focused on studying the genetic determinants of human disease. |
EYLEA U.S. net product sales | $1.7 billion - $1.8 billion |
Non-GAAP unreimbursed R&D (2) | $425 million - $475 million |
Non-GAAP SG&A (2) | $330 million - $380 million |
Capital expenditures | $350 million - $425 million |
(1) | Regeneron records net product sales of EYLEA in the United States. Outside the United States, EYLEA net product sales comprise sales by Bayer HealthCare in countries other than Japan and sales by Santen Pharmaceuticals in Japan under a co-promotion agreement with a Japanese subsidiary of Bayer HealthCare. The Company recognizes its share of the profits (including a percentage on sales in Japan) from EYLEA sales outside the United States within "Bayer HealthCare collaboration revenue" in its Statements of Operations. |
(2) | This press release uses non-GAAP net income, non-GAAP net income per share, non-GAAP unreimbursed R&D, and non-GAAP SG&A, which are financial measures that are not calculated in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). The Company believes that the presentation of these non-GAAP measures is useful to investors because they exclude, as applicable, (i) non-cash share-based compensation expense which fluctuates from period to period based on factors that are not within the Company's control, such as the Company's stock price on the dates share-based grants are issued, (ii) non-cash interest expense related to the Company's convertible senior notes since this is not deemed useful in evaluating the Company's operating performance, (iii) non-cash income tax expense, since the Company does not currently pay, or expect to pay in the near future, significant cash income taxes due primarily to the utilization of net operating loss and tax credit carry-forwards; therefore, non-cash income tax expense is not deemed useful in evaluating the Company's operating performance, and (iv) a non-cash tax benefit as a result of releasing substantially all of the valuation allowance associated with the Company’s deferred tax assets. Non-GAAP unreimbursed R&D represents non-GAAP R&D expenses reduced by R&D expense reimbursements from the Company's collaboration partners. Management uses these non-GAAP measures for planning, budgeting, forecasting, assessing historical performance, and making financial and operational decisions, and also provides forecasts to investors on this basis. However, there are limitations in the use of these and other non-GAAP financial measures as they exclude certain expenses that are recurring in nature. Furthermore, the Company's non-GAAP financial measures may not be comparable with non-GAAP information provided by other companies. Any non-GAAP financial measure presented by Regeneron should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with GAAP. A reconciliation of the Company's GAAP to non-GAAP results is included in Table 3 of this press release. |
Contact Information: | ||
Manisha Narasimhan, Ph.D. | Peter Dworkin | |
Investor Relations | Corporate Communications | |
914-847-5126 | 914-847-7640 | |
manisha.narasimhan@regeneron.com | peter.dworkin@regeneron.com |
December 31, | ||||||||
2013 | 2012 | |||||||
Assets: | ||||||||
Cash, restricted cash, and marketable securities | $ | 1,083,875 | $ | 587,511 | ||||
Accounts receivable - trade, net | 787,071 | 593,207 | ||||||
Accounts receivable from Sanofi | 104,707 | 99,913 | ||||||
Deferred tax assets | 276,555 | 340,156 | ||||||
Property, plant, and equipment, net | 526,983 | 379,940 | ||||||
Other assets | 171,822 | 79,763 | ||||||
Total assets | $ | 2,951,013 | $ | 2,080,490 | ||||
Liabilities and stockholders' equity: | ||||||||
Accounts payable, accrued expenses, and other liabilities | $ | 262,226 | $ | 118,604 | ||||
Deferred revenue | 231,199 | 259,173 | ||||||
Facility lease obligations | 185,197 | 160,810 | ||||||
Convertible senior notes | 320,315 | 296,518 | ||||||
Stockholders' equity | 1,952,076 | 1,245,385 | ||||||
Total liabilities and stockholders' equity | $ | 2,951,013 | $ | 2,080,490 |
Three months ended December 31, | Year ended December 31, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Revenues: | ||||||||||||||||
Net product sales | $ | 406,088 | $ | 281,471 | $ | 1,425,839 | $ | 858,093 | ||||||||
Sanofi collaboration revenue | 110,950 | 104,779 | 430,111 | 423,814 | ||||||||||||
Bayer HealthCare collaboration revenue | 85,695 | 21,791 | 220,289 | 70,099 | ||||||||||||
Technology licensing and other revenue | 7,679 | 6,561 | 28,506 | 26,471 | ||||||||||||
610,412 | 414,602 | 2,104,745 | 1,378,477 | |||||||||||||
Expenses: | ||||||||||||||||
Research and development | 268,140 | 181,024 | 859,947 | 625,554 | ||||||||||||
Selling, general, and administrative | 82,085 | 57,739 | 329,415 | 210,755 | ||||||||||||
Cost of goods sold | 34,491 | 29,641 | 118,048 | 83,927 | ||||||||||||
Cost of collaboration manufacturing | 13,623 | 528 | 37,307 | 528 | ||||||||||||
398,339 | 268,932 | 1,344,717 | 920,764 | |||||||||||||
Income from operations | 212,073 | 145,670 | 760,028 | 457,713 | ||||||||||||
Other income (expense): | ||||||||||||||||
Investment (expense) income | (2,259 | ) | 384 | (231 | ) | 2,012 | ||||||||||
Interest expense | (11,661 | ) | (11,495 | ) | (46,437 | ) | (45,304 | ) | ||||||||
(13,920 | ) | (11,111 | ) | (46,668 | ) | (43,292 | ) | |||||||||
Income before income taxes | 198,153 | 134,559 | 713,360 | 414,421 | ||||||||||||
Income tax (expense) benefit | (101,347 | ) | 335,848 | (288,998 | ) | 335,848 | ||||||||||
Net income | $ | 96,806 | $ | 470,407 | $ | 424,362 | $ | 750,269 | ||||||||
Net income per share - basic | $ | 0.98 | $ | 4.92 | $ | 4.33 | $ | 7.92 | ||||||||
Net income per share - diluted | $ | 0.86 | $ | 4.08 | $ | 3.81 | $ | 6.75 | ||||||||
Weighted average shares outstanding - basic | 98,862 | 95,691 | 97,917 | 94,685 | ||||||||||||
Weighted average shares outstanding - diluted | 112,557 | 117,237 | 111,290 | 115,382 |
Three months ended December 31, | Year ended December 31, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
GAAP net income | $ | 96,806 | $ | 470,407 | $ | 424,362 | $ | 750,269 | ||||||||
Adjustments: | ||||||||||||||||
R&D: Non-cash share-based compensation expense | 33,779 | 18,498 | 116,520 | 53,833 | ||||||||||||
SG&A: Non-cash share-based compensation expense | 20,722 | 11,851 | 79,966 | 39,249 | ||||||||||||
COGS: Non-cash share-based compensation expense | 681 | 422 | 1,913 | 1,075 | ||||||||||||
Interest expense: Non-cash interest related to convertible senior notes | 5,841 | 5,591 | 22,980 | 21,623 | ||||||||||||
Income taxes: Non-cash income tax expense | 101,347 | 4,308 | 288,998 | 4,308 | ||||||||||||
Income taxes: Release of valuation allowance | — | (340,156 | ) | — | (340,156 | ) | ||||||||||
Non-GAAP net income | $ | 259,176 | $ | 170,921 | $ | 934,739 | $ | 530,201 | ||||||||
Non-GAAP net income per share - basic | $ | 2.62 | $ | 1.79 | $ | 9.55 | $ | 5.60 | ||||||||
Non-GAAP net income per share - diluted (a) | $ | 2.24 | $ | 1.47 | $ | 8.17 | $ | 4.66 | ||||||||
Shares used in calculating: | ||||||||||||||||
Non-GAAP net income per share - basic | 98,862 | 95,691 | 97,917 | 94,685 | ||||||||||||
Non-GAAP net income per share - diluted (b) | 116,740 | 117,237 | 115,343 | 115,382 |
(a) | For diluted non-GAAP net income per share calculations, excludes $1.8 million and $1.9 million, respectively, of interest expense for the three month periods ended December 31, 2013 and 2012, and $7.2 million and $7.5 million, respectively, of interest expense for the years ended December 31, 2013 and 2012, related to the contractual coupon interest rate on the Company's 1.875% convertible senior notes, since these securities were dilutive. |
(b) | Weighted average shares outstanding includes the dilutive effect, if any, of employee stock options, restricted stock awards, convertible senior notes, and warrants. |
Three months ended December 31, | Year ended December 31, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
Sanofi collaboration revenue: | ||||||||||||||||
Regeneron's share of losses in connection with commercialization of ZALTRAP | $ | (8,229 | ) | $ | (6,109 | ) | $ | (30,810 | ) | $ | (25,634 | ) | ||||
Substantive milestones and up-front payments | — | — | (20,000 | ) | 50,000 | |||||||||||
Reimbursement of Regeneron research and development expenses | 111,831 | 103,435 | 459,128 | 375,947 | ||||||||||||
Other | 7,348 | 7,453 | 21,793 | 23,501 | ||||||||||||
Total Sanofi collaboration revenue | 110,950 | 104,779 | 430,111 | 423,814 | ||||||||||||
Bayer HealthCare collaboration revenue: | ||||||||||||||||
Regeneron's net profit in connection with commercialization of EYLEA outside the United States | 44,308 | — | 101,494 | — | ||||||||||||
Sales and substantive development milestones | 25,000 | 10,000 | 70,000 | 25,000 | ||||||||||||
Cost-sharing of Regeneron EYLEA development expenses | 6,963 | 9,210 | 20,905 | 34,892 | ||||||||||||
Other | 9,424 | 2,581 | 27,890 | 10,207 | ||||||||||||
Total Bayer HealthCare collaboration revenue | 85,695 | 21,791 | 220,289 | 70,099 | ||||||||||||
Total collaboration revenue | $ | 196,645 | $ | 126,570 | $ | 650,400 | $ | 493,913 |
H/N*O45*;3NBFDU9G!W/PC\-3R!HWOK<8^[%,"/\`QY2:M:=\+_#& MGLKM:RW;KG!N9-P/U48!_*NRHK9XJLU;F9DL/23ORH;'%'#&L<2*D:C"JHP` M/0"F7-O%=VLUM,I:*9#&X#%25(P>1R/PJ6BL+]38Y>V^'?A6TNHKF'2MLL+B M1&^T2G#`Y!P6P>:ZBBBKG4G/XG