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)) | |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter). | ||
Emerging growth company ¨ | ||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ |
Title of each class | Trading Symbol | Name of each exchange on which registered |
Common Stock - par value $.001 per share | REGN | NASDAQ Global Select Market |
Date: May 7, 2019 | REGENERON PHARMACEUTICALS, INC. | ||
By: | /s/ Joseph J. LaRosa | ||
Name: | Joseph J. LaRosa | ||
Title: | Executive Vice President, General Counsel and Secretary |
• | First quarter 2019 revenues increased 13% to $1.71 billion versus first quarter 2018 |
• | First quarter 2019 EYLEA® (aflibercept) Injection U.S. net sales increased 9% to $1.07 billion versus first quarter 2018 |
• | First quarter 2019 EYLEA net sales outside the United States, which are recorded by the Company's collaborator Bayer(1), increased 7% to $669 million versus first quarter 2018 |
• | First quarter 2019 Dupixent® (dupilumab) global net sales, which are recorded by the Company's collaborator Sanofi, were $374 million |
• | First quarter 2019 Libtayo® (cemiplimab) U.S. net sales were $27 million; Libtayo was launched in October 2018 |
• | First quarter 2019 GAAP diluted EPS was $3.99 and non-GAAP diluted EPS was $4.45 |
• | FDA approved Dupixent for moderate-to-severe atopic dermatitis in adolescents |
Financial Highlights | |||||||||||
($ in millions, except per share data) | Three Months Ended March 31, | ||||||||||
2019 | 2018 | % Change | |||||||||
Total revenues | $ | 1,712 | $ | 1,512 | 13 | % | |||||
GAAP net income | $ | 461 | $ | 478 | (4 | %) | |||||
GAAP net income per share - diluted | $ | 3.99 | $ | 4.16 | (4 | %) | |||||
Non-GAAP net income(2) | $ | 518 | $ | 537 | (4 | %) | |||||
Non-GAAP net income per share - diluted(2) | $ | 4.45 | $ | 4.67 | (5 | %) |
• | In April 2019, the Company resubmitted a supplemental Biologics License Application (sBLA) for EYLEA in a pre-filled syringe. |
• | The EYLEA sBLA for the treatment of diabetic retinopathy has a target action date of May 13, 2019. |
• | In March 2019, the FDA approved Dupixent for adolescent patients 12 to 17 years of age with moderate-to-severe atopic dermatitis whose disease is not adequately controlled with topical prescription therapies or when those therapies are not advisable. |
• | The FDA accepted for priority review the sBLA for Dupixent as an add-on maintenance treatment for adults with inadequately controlled severe chronic rhinosinusitis with nasal polyps (CRSwNP), with a target action date of June 26, 2019. The Company and Sanofi have also submitted a European Marketing Authorization Application (MAA) for CRSwNP. |
• | The European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion for Dupixent, recommending it be approved for use in adults and adolescents 12 years and older as add-on maintenance treatment for severe asthma. |
• | Initiated a Phase 3 study in chronic obstructive pulmonary disease (COPD). |
• | The European Medicines Agency's CHMP recommended conditional approval for Libtayo for the treatment of adult patients with metastatic or locally advanced cutaneous squamous cell carcinoma (CSCC) who are not candidates for curative surgery or curative radiation. |
• | The Company expects to begin a potentially pivotal Phase 2 study in advanced follicular lymphoma this quarter, and a potentially pivotal Phase 2 study in diffuse large B-cell lymphoma (DLBCL) later this year. |
• | At the June European Hematology Association meeting, the Company plans to present updated results of the Phase 1 study in relapsed or refractory B-cell non-hodgkin lymphoma, including in patients who have failed previous CAR-T therapy. |
• | In March 2019, the European Commission approved a new indication for Praluent to reduce cardiovascular risk in adults with established atherosclerotic cardiovascular disease (ASCVD) by lowering low-density lipoprotein cholesterol (LDL-C) levels as an adjunct to correction of other risk factors. |
• | In April 2019, the FDA approved a new indication for Praluent to reduce the risk of heart attack, stroke, and unstable angina requiring hospitalization in adults with established cardiovascular disease. |
• | Beginning in March 2019, Praluent was made available for both the 75 mg and 150 mg doses at a U.S. list price of $5,850 annually, a 60% reduction from the original price. |
• | In April 2019, the Company entered into a collaboration with Alnylam Pharmaceuticals, Inc. to discover, develop, and commercialize new RNA interference (RNAi) therapeutics for diseases of the eye and central nervous system, in addition to a select number of targets expressed in the liver. Under the terms of the agreement, the Company is obligated to make an up-front payment of $400 million and purchase $400 million of Alnylam common stock. In addition, the Company will provide Alnylam with a specified amount of funding at program initiation and at lead candidate designation, and Alnylam is eligible to receive up to $200 million in clinical proof-of-principle milestones. |
GAAP Sanofi collaboration revenue: Sanofi reimbursement of Regeneron commercialization-related expenses | $500 million–$535 million (previously $510 million–$560 million) |
GAAP Unreimbursed R&D(5) | $1.880 billion–$2.000 billion (previously $1.855 billion–$2.000 billion) |
Non-GAAP Unreimbursed R&D(2)(4) | $1.610 billion–$1.710 billion (previously $1.590 billion–$1.710 billion) |
GAAP SG&A | $1.690 billion–$1.795 billion (previously $1.700 billion–$1.830 billion) |
Non-GAAP SG&A(2)(4) | $1.500 billion–$1.580 billion (previously $1.500 billion–$1.600 billion) |
GAAP effective tax rate | 11%–13% (previously 14%–16%) |
Capital expenditures | $410 million–$475 million (previously $410 million–$490 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 in countries other than Japan and sales by Santen Pharmaceutical Co., Ltd. in Japan under a co-promotion agreement with an affiliate of Bayer. The Company recognizes its share of the profits (including a percentage on sales in Japan) from EYLEA sales outside the United States within "Bayer 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"). These non-GAAP financial measures are computed by excluding certain non-cash and other items from the related GAAP financial measure. Non-GAAP adjustments also include the estimated income tax effect of reconciling items. The Company makes such adjustments for items the Company does not view as useful in evaluating its operating performance. For example, adjustments may be made for items that fluctuate 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 or changes in the fair value of the Company's equity investments) or items that are not associated with normal, recurring operations (such as changes in applicable laws and regulations). 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. Additionally, such non-GAAP measures provide investors with an enhanced understanding of the financial performance of the Company's core business operations. 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 historical GAAP to non-GAAP results is included in Table 3 of this press release. |
(3) | The Company's 2019 financial guidance does not assume the completion of any significant business development transactions not completed as of the date of this press release (other than the collaboration with Alnylam Pharmaceuticals, Inc. discussed above). |
(4) | A reconciliation of full year 2019 non-GAAP to GAAP financial guidance is included below: |
Projected Range | ||||||||
(In millions) | Low | High | ||||||
GAAP unreimbursed R&D (5) | $ | 1,880 | $ | 2,000 | ||||
R&D: Non-cash share-based compensation expense | (270 | ) | (290 | ) | ||||
Non-GAAP unreimbursed R&D | $ | 1,610 | $ | 1,710 | ||||
GAAP SG&A | $ | 1,690 | $ | 1,795 | ||||
SG&A: Non-cash share-based compensation expense | (190 | ) | (215 | ) | ||||
Non-GAAP SG&A | $ | 1,500 | $ | 1,580 |
(5) | Unreimbursed R&D represents R&D expenses reduced by R&D expense reimbursements from the Company's collaborators and/or customers. |
(6) | The Company's collaborators provide it with estimates of the collaborators' respective sales and the Company's share of the profits or losses from commercialization of products for the most recent fiscal quarter. The Company's estimates for such quarter are reconciled to actual results in the subsequent fiscal quarter, and the Company's share of the profit or loss is adjusted on a prospective basis accordingly, if necessary. |
Contact Information: | ||
Mark Hudson | Hala Mirza | |
Investor Relations | Corporate Communications | |
914-847-3482 | 914-847-3422 | |
mark.hudson@regeneron.com | hala.mirza@regeneron.com |
March 31, | December 31, | |||||||
2019 | 2018 | |||||||
Assets: | ||||||||
Cash and marketable securities | $ | 5,572.2 | $ | 4,564.9 | ||||
Accounts receivable - trade, net | 1,728.4 | 1,723.7 | ||||||
Accounts receivable from Sanofi and Bayer | 576.8 | 519.5 | ||||||
Inventories | 1,208.8 | 1,151.2 | ||||||
Property, plant, and equipment, net | 2,612.8 | 2,575.8 | ||||||
Deferred tax assets | 829.3 | 828.7 | ||||||
Other assets | 326.5 | 370.7 | ||||||
Total assets | $ | 12,854.8 | $ | 11,734.5 | ||||
Liabilities and stockholders' equity: | ||||||||
Accounts payable, accrued expenses, and other liabilities | $ | 1,357.0 | $ | 1,352.0 | ||||
Deferred revenue | 1,343.2 | 916.7 | ||||||
Finance lease liabilities | 709.9 | 708.5 | ||||||
Stockholders' equity | 9,444.7 | 8,757.3 | ||||||
Total liabilities and stockholders' equity | $ | 12,854.8 | $ | 11,734.5 |
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Revenues: | ||||||||
Net product sales | $ | 1,104.4 | $ | 987.9 | ||||
Sanofi collaboration revenue | 246.4 | 189.5 | ||||||
Bayer collaboration revenue | 276.2 | 247.9 | ||||||
Other revenue | 84.8 | 86.2 | ||||||
1,711.8 | 1,511.5 | |||||||
Expenses: | ||||||||
Research and development | 641.8 | 498.6 | ||||||
Selling, general, and administrative | 410.8 | 330.8 | ||||||
Cost of goods sold | 70.9 | 69.2 | ||||||
Cost of collaboration and contract manufacturing | 108.3 | 45.7 | ||||||
1,231.8 | 944.3 | |||||||
Income from operations | 480.0 | 567.2 | ||||||
Other income (expense), net | 66.1 | 18.2 | ||||||
Income before income taxes | 546.1 | 585.4 | ||||||
Income tax expense | (85.0 | ) | (107.4 | ) | ||||
Net income | $ | 461.1 | $ | 478.0 | ||||
Net income per share - basic | $ | 4.23 | $ | 4.44 | ||||
Net income per share - diluted | $ | 3.99 | $ | 4.16 | ||||
Weighted average shares outstanding - basic | 108.9 | 107.6 | ||||||
Weighted average shares outstanding - diluted | 115.5 | 114.9 |
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
GAAP net income | $ | 461.1 | $ | 478.0 | ||||
Adjustments: | ||||||||
R&D: Non-cash share-based compensation expense | 58.7 | 40.8 | ||||||
SG&A: Non-cash share-based compensation expense | 43.8 | 35.0 | ||||||
SG&A: Litigation contingencies | 5.0 | — | ||||||
COGS and COCM: Non-cash share-based compensation expense | 5.4 | 6.6 | ||||||
Other income/expense: Gains and losses on investments in equity securities | (42.8 | ) | (9.4 | ) | ||||
Income tax effect of reconciling items above | (13.5 | ) | (14.3 | ) | ||||
Non-GAAP net income | $ | 517.7 | $ | 536.7 | ||||
Non-GAAP net income per share - basic | $ | 4.75 | $ | 4.99 | ||||
Non-GAAP net income per share - diluted | $ | 4.45 | $ | 4.67 | ||||
Shares used in calculating: | ||||||||
Non-GAAP net income per share - basic | 108.9 | 107.6 | ||||||
Non-GAAP net income per share - diluted | 116.3 | 114.9 |
Three Months Ended March 31, | ||||||||
2019 | 2018 | |||||||
Sanofi collaboration revenue: | ||||||||
Reimbursement of Regeneron research and development expenses | $ | 120.9 | $ | 134.2 | ||||
Reimbursement of Regeneron commercialization-related expenses | 118.9 | 86.6 | ||||||
Regeneron's share of losses in connection with commercialization of antibodies | (27.8 | ) | (74.8 | ) | ||||
Other | 34.4 | 43.5 | ||||||
Total Sanofi collaboration revenue | 246.4 | 189.5 | ||||||
Bayer collaboration revenue: | ||||||||
Regeneron's net profit in connection with commercialization of EYLEA outside the United States | 249.3 | 232.1 | ||||||
Reimbursement of Regeneron development expenses | 2.6 | 4.0 | ||||||
Other | 24.3 | 11.8 | ||||||
Total Bayer collaboration revenue | 276.2 | 247.9 | ||||||
Total Sanofi and Bayer collaboration revenue | $ | 522.6 | $ | 437.4 | ||||
Other revenue: | ||||||||
Reimbursement of Regeneron research and development expenses - Teva | $ | 32.2 | $ | 39.1 | ||||
Reimbursement of Regeneron research and development expenses - other | 8.4 | 2.7 | ||||||
Other | 44.2 | 44.4 | ||||||
Total other revenue | $ | 84.8 | $ | 86.2 |
Three Months Ended March 31, | ||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
U.S. | ROW | Total | U.S. | ROW | Total | |||||||||||||||||||
EYLEA* | $ | 1,074.1 | $ | 669.4 | $ | 1,743.5 | $ | 984.0 | $ | 624.0 | $ | 1,608.0 | ||||||||||||
Libtayo | 26.8 | — | 26.8 | — | — | — | ||||||||||||||||||
ARCALYST | 3.5 | — | 3.5 | 3.9 | — | 3.9 | ||||||||||||||||||
Net product sales recorded by Regeneron | $ | 1,104.4 | $ | 987.9 | ||||||||||||||||||||
Net product sales recorded by Sanofi*: | ||||||||||||||||||||||||
Dupixent | $ | 303.0 | $ | 70.7 | $ | 373.7 | $ | 116.8 | $ | 14.6 | $ | 131.4 | ||||||||||||
Praluent | $ | 22.9 | $ | 41.0 | $ | 63.9 | $ | 31.7 | $ | 28.2 | $ | 59.9 | ||||||||||||
Kevzara | $ | 20.7 | $ | 13.0 | $ | 33.7 | $ | 9.3 | $ | 3.1 | $ | 12.4 | ||||||||||||
ZALTRAP | $ | 0.5 | $ | 24.0 | $ | 24.5 | $ | 2.4 | $ | 23.9 | $ | 26.3 | ||||||||||||
* Bayer records net product sales of EYLEA outside the United States and Sanofi records global net product sales of Dupixent, Praluent, Kevzara, and ZALTRAP. Refer to Table 4 for the Company's share of profits/losses recorded in connection with sales of EYLEA outside the United States and global sales of Dupixent, Praluent, and Kevzara. Sanofi pays the Company a percentage of aggregate net sales of ZALTRAP. |
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