Collaboration, License, and Other Agreements

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Collaboration, License, and Other Agreements

Collaboration, License, and Other Agreements

a. Sanofi

Amounts recognized in our Statements of Operations in connection with our collaborations with Sanofi are detailed below:

	Statement of Operations Classification	Three Months Ended March 31,
(In millions)		2022		2021
Antibody:
Regeneron's share of profits in connection with commercialization of antibodies	Collaboration revenue	$	415.3	$	260.6
Sales-based milestone earned	Collaboration revenue	$	50.0	$	—
Reimbursement for manufacturing of commercial supplies	Collaboration revenue	$	160.8	$	105.6
Reimbursement of research and development expenses	Reduction of Research and development expense	$	36.5	$	30.1
Regeneron's obligation for its share of Sanofi research and development expenses	Research and development expense	$	(9.7)	$	(11.9)
Reimbursement of commercialization-related expenses	Reduction of Selling, general, and administrative expense	$	91.7	$	60.4
Immuno-oncology:
Regeneron's share of profits (losses) in connection with commercialization of Libtayo outside the United States	Collaboration revenue	$	2.8	$	(6.1)
Reimbursement for manufacturing of ex-U.S. commercial supplies	Collaboration revenue	$	2.0	$	4.7
Reimbursement of research and development expenses	Reduction of Research and development expense	$	21.5	$	21.9
Reimbursement of commercialization-related expenses	Reduction of Selling, general, and administrative expense	$	19.0	$	18.5
Regeneron's obligation for its share of Sanofi commercial expenses	Selling, general, and administrative expense	$	(9.2)	$	(7.7)
Regeneron's obligation for Sanofi's share of Libtayo U.S. gross profits	Cost of goods sold	$	(32.3)	$	(30.4)
Amounts recognized in connection with up-front payments received	Other operating income	$	18.1	$	22.9

Antibody

The Company is party to a global, strategic collaboration with Sanofi to research, develop, and commercialize fully human monoclonal antibodies (the "Antibody Collaboration"), which currently consists of Dupixent® (dupilumab), Kevzara® (sarilumab), and itepekimab. Under the terms of the Antibody License and Collaboration Agreement, Sanofi is generally responsible for funding 80%–100% of agreed-upon development costs.

Sanofi leads commercialization activities for products under the Antibody Collaboration, subject to the Company's right to co-commercialize such products. In addition to profit and loss sharing, the Company is entitled to receive sales milestone payments from Sanofi. During the three months ended March 31, 2022, the Company earned a $50.0 million sales-based milestone from Sanofi, upon aggregate annual sales of antibodies outside the United States (including Praluent) exceeding $2.0 billion on a rolling twelve-month basis. We are entitled to receive up to an aggregate of $100.0 million in additional sales milestone payments from Sanofi, which includes the next sales milestone payment of $50.0 million that would be earned when such sales outside the United States exceed $2.5 billion on a rolling twelve-month basis.

The following table summarizes contract balances in connection with the Company's Antibody Collaboration with Sanofi:

	March 31,		December 31,
(In millions)	2022		2021
Accounts receivable, net	$	500.4	$	504.8
Deferred revenue	$	380.2	$	368.7

Immuno-Oncology

The Company is party to a collaboration with Sanofi to research, develop, and commercialize antibody-based cancer treatments in the field of immuno-oncology (the "IO Collaboration").

Under the terms of the Immuno-oncology License and Collaboration Agreement, the parties are co-developing and co-commercializing Libtayo (cemiplimab). The parties share equally, on an ongoing basis, agreed-upon development and commercialization expenses for Libtayo. The Company has principal control over the development of Libtayo and leads commercialization activities in the United States (see Note 2 for related product sales information), while Sanofi leads commercialization activities outside of the United States. The parties share equally in profits and losses in connection with the commercialization of Libtayo.

The following table summarizes contract balances in connection with the Company's IO Collaboration with Sanofi:

	March 31,		December 31,
(In millions)	2022		2021
Accounts receivable, net	$	4.9	$	(22.5)
Deferred revenue	$	21.1	$	16.0
Other liabilities	$	258.0	$	276.1

Other liabilities include up-front payments received from Sanofi for which recognition has been deferred.

The aggregate amount of the estimated consideration under the IO Collaboration related to the Company's obligation that was unsatisfied (or partially unsatisfied) as of March 31, 2022 was $532.8 million. This amount is expected to be recognized over the remaining period in which the Company is obligated to satisfy its obligation in connection with performing development activities.

b. Bayer

The Company is party to a license and collaboration agreement with Bayer for the global development and commercialization of EYLEA (aflibercept) and aflibercept 8 mg outside the United States. All agreed-upon development expenses incurred by the Company and Bayer are shared equally.

Bayer markets EYLEA outside the United States and the companies share equally in profits and losses from sales. In Japan, the Company was entitled to receive a tiered percentage of between 33.5% and 40.0% of EYLEA net product sales through 2021, and effective January 1, 2022, the companies share equally in profits and losses from sales.

Amounts recognized in our Statements of Operations in connection with our Bayer collaboration are as follows:

	Statement of Operations Classification	Three Months Ended March 31,
(In millions)		2022		2021
Regeneron's share of profits in connection with commercialization of EYLEA outside the United States	Collaboration revenue	$	338.4	$	308.9
Reimbursement for manufacturing of ex-U.S. commercial supplies	Collaboration revenue	$	25.0	$	13.9
One-time payment in connection with change in Japan arrangement	Collaboration revenue	$	21.9	$	—
Reimbursement of research and development expenses	Reduction of Research and development expense	$	11.1	$	10.8
Regeneron's obligation for its share of Bayer research and development expenses	Research and development expense	$	(10.8)	$	(12.5)

The following table summarizes contract balances in connection with our Bayer collaboration:

	March 31,		December 31,
(In millions)	2022		2021
Accounts receivable, net	$	344.8	$	355.5
Deferred revenue	$	122.4	$	129.4

c. Teva

The Company and Teva are parties to a collaboration agreement (the "Teva Collaboration Agreement") to develop and commercialize fasinumab globally, excluding certain Asian countries that are subject to our collaboration agreement with Mitsubishi Tanabe Pharma Corporation. The Company leads global development activities, and the parties share development costs equally, on an ongoing basis, under a global development plan.

Amounts recognized in our Statements of Operations in connection with the Teva Collaboration Agreement were not material for the three months ended March 31, 2022 and 2021. In addition, contract balances in our Balance Sheets were not material as of March 31, 2022 and December 31, 2021.

The aggregate amount of the estimated consideration under the Teva Collaboration Agreement related to the Company's obligation that was unsatisfied (or partially unsatisfied) as of March 31, 2022 was $83.6 million. This amount is expected to be recognized over the remaining period in which the Company is obligated to satisfy its obligation in connection with performing development activities.

d. U.S. Government

In 2020, we announced an expansion of our Other Transaction Agreement with the Biomedical Advanced Research Development Authority ("BARDA"), pursuant to which the U.S. Department of Health and Human Services ("HHS") was obligated to fund certain of our costs incurred for research and development activities related to COVID-19 treatments.

In 2020 and 2021, we entered into agreements to manufacture and deliver filled and finished drug product of REGEN-COV (casirivimab and imdevimab) to the U.S. government. In connection with one of our 2021 agreements, Roche supplied a portion of the doses to Regeneron to fulfill our agreement with the U.S. government (see "Roche" below for further details regarding our collaboration agreement with Roche).

As of December 31, 2021, the Company had completed its final deliveries of drug product under its agreements with the U.S. government. See Note 2 for REGEN-COV net product sales recognized during 2021.

e. Roche

In 2020, we entered into a collaboration agreement (the "Roche Collaboration Agreement") with Roche to develop, manufacture, and distribute the casirivimab and imdevimab antibody cocktail (known as REGEN-COV in the United States and Ronapreve™ in other countries). We lead global development activities for casirivimab and imdevimab, and the parties jointly fund certain studies.

Under the terms of the agreement, each party is obligated to dedicate a certain amount of manufacturing capacity to casirivimab and imdevimab each year. We distribute the product in the United States and Roche distributes the product outside of the United States. The parties share gross profits from worldwide sales based on a pre-specified formula, depending on the amount of manufactured product supplied by each party to the market. Each quarter, a single payment is due from one party to the other to true-up the global gross profits between the parties. If Regeneron is to receive a true-up payment from Roche, such amount will be recorded to Collaboration revenue. If Regeneron is to make a true-up payment to Roche, such amount will be recorded to Cost of goods sold.

Amounts recognized in our Statements of Operations in connection with the Roche Collaboration Agreement are as follows:

	Statement of Operations Classification	Three Months Ended March 31,
(In millions)		2022		2021
Global gross profit payment from Roche in connection with sales of Ronapreve	Collaboration revenue	$	216.3	$	66.8

Reimbursement of research and development expenses from Roche was $86.8 million for the three months ended March 31, 2021. Such amounts were not material for the three months ended March 31, 2022.

The following table summarizes contract balances in connection with the Roche Collaboration Agreement:

	March 31,		December 31,
(In millions)	2022		2021
Accounts receivable, net	$	204.3	$	—
Accrued expenses and other current liabilities	$	—	$	268.8

f. Alnylam

In 2018, the Company and Alnylam Pharmaceuticals, Inc. entered into a collaboration to discover RNA interference ("RNAi") therapeutics for NASH and potentially other related diseases, as well as to research, co-develop and commercialize any therapeutic product candidates that emerge from these discovery efforts (including ALN-HSD, which is currently in clinical development). The parties share equally, on an ongoing basis, development expenses for ALN-HSD.

In 2019, the parties entered into a global, strategic collaboration to discover, develop, and commercialize RNAi therapeutics for a broad range of diseases by addressing therapeutic disease targets expressed in the eye and central nervous system ("CNS"), in addition to a select number of targets expressed in the liver. For each program, we provide Alnylam with a specified amount of funding at program initiation and at lead candidate designation. Following designation of a lead candidate, the parties may further advance such lead candidate under either a co-commercialization collaboration agreement structure (under which the parties are advancing ALN-APP, which is currently in clinical development) or a license agreement.

In addition, during 2019, the parties entered into a Co-Commercialization Collaboration Agreement for a silencing RNA ("siRNA") therapeutic targeting the C5 component of the human complement pathway being developed by Alnylam, with Alnylam as the lead party, and a License Agreement for a combination product consisting of such siRNA therapeutic (cemdisiran) and a fully human monoclonal antibody being developed by the Company (pozelimab), with the Company as the licensee. Under the C5 siRNA Co-Commercialization Collaboration Agreement, the parties share costs equally and under the License Agreement, the licensee is responsible for its own costs and expenses.

Amounts recognized in our Statements of Operations in connection with the Alnylam agreements described above were not material for the three months ended March 31, 2022 and 2021. In addition, contract balances in our Balance Sheets were not material as of March 31, 2022 and December 31, 2021.

g. Checkmate

In April 2022, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") to acquire Checkmate Pharmaceuticals, Inc. at a total equity value of approximately $250 million. On May 2, 2022, the Company commenced a tender offer to acquire any and all outstanding shares of common stock of Checkmate at a price of $10.50 per share, to be paid to each shareholder tendering Checkmate shares in cash, without interest, subject to reduction for any applicable withholding taxes. The consummation of the tender offer is subject to certain conditions, including the tender of at least a majority of the outstanding shares of Checkmate common stock, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and other customary closing conditions. If the tender offer is successfully consummated, the Company will acquire all shares not acquired in the tender offer through a merger that does not require the vote of Checkmate stockholders. The transaction is expected to close in mid-2022.