Collaboration, License, and Other Agreements

3 Months Ended

Mar. 31, 2023

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)		2023		2022
Antibody:
Regeneron's share of profits in connection with commercialization of antibodies	Collaboration revenue	$	636.5	$	415.3
Sales-based milestones earned	Collaboration revenue	$	—	$	50.0
Reimbursement for manufacturing of commercial supplies	Collaboration revenue	$	161.9	$	160.8
Regeneron's obligation for its share of Sanofi R&D expenses, net of reimbursement of R&D expenses	(R&D expense)/Reduction of R&D expense	$	(26.4)	$	26.8
Reimbursement of commercialization-related expenses	Reduction of SG&A expense	$	117.6	$	91.7
Immuno-oncology(a):
Regeneron's share of profits in connection with commercialization of Libtayo outside the United States	Collaboration revenue	$	—	$	2.8
Reimbursement for manufacturing of ex-U.S. commercial supplies	Collaboration revenue	$	—	$	2.0
Reimbursement of R&D expenses	Reduction of R&D expense	$	—	$	21.5
Reimbursement of commercialization-related expenses	Reduction of SG&A expense	$	—	$	19.0
Regeneron's obligation for its share of Sanofi commercial expenses	SG&A expense	$	—	$	(9.2)
Regeneron's obligation for Sanofi's share of Libtayo U.S. gross profits	Cost of goods sold	$	—	$	(32.3)
Amounts recognized in connection with up-front payments received	Other operating income	$	—	$	18.1
(a) As described within the "Immuno-Oncology" section below, effective July 1, 2022, the Company obtained the exclusive right to develop, commercialize, and manufacture Libtayo worldwide.

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 (the "LCA"), Sanofi is generally responsible for funding 80% to 100% of agreed-upon development costs. The Company is obligated to reimburse Sanofi for 30% to 50% of worldwide development expenses that were funded by Sanofi based on the Company's share of collaboration profits from commercialization of collaboration products. Under the terms of the LCA, the Company was required to apply 10% of its share of the profits from the Antibody Collaboration in any calendar quarter to reimburse Sanofi for these development costs. On July 1, 2022, an amendment to the LCA became effective, pursuant to which the percentage of the Company's share of profits used to reimburse Sanofi for such development costs increased from 10% to 20%. A portion of the value associated with the increase in reimbursement percentage was deemed to be contingent consideration attributable to the Company's acquisition of the Libtayo (cemiplimab) rights described within the "Immuno-Oncology" section below; this portion will be recorded as an increase to the Libtayo intangible asset over time as the Company repays such development costs to Sanofi.

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. The Company is entitled to receive the final sales milestone payment of $50.0 million when such sales outside the United States exceed $3.0 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)	2023		2022
Accounts receivable, net	$	731.5	$	692.3
Deferred revenue	$	377.5	$	415.8

Immuno-Oncology

The Company was previously a party to a collaboration with Sanofi for 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 were co-developing and co-commercializing Libtayo. The parties shared equally, on an ongoing basis, development and commercialization expenses for Libtayo. The Company had principal control over the development of Libtayo and led commercialization activities in the United States, while Sanofi led commercialization activities outside of the United States. The parties shared equally in profits and losses in connection with the commercialization of Libtayo.

Effective July 1, 2022, the Company obtained the exclusive right to develop, commercialize, and manufacture Libtayo worldwide under an Amended and Restated Immuno-oncology License and Collaboration Agreement with Sanofi (the "A&R IO LCA"). In connection with the A&R IO LCA, in 2022, the Company made a $900.0 million up-front payment to Sanofi, as well as a $100.0 million regulatory milestone payment. In addition, Sanofi earned a $65.0 million sales-based milestone upon the achievement of a specified amount of worldwide net product sales of Libtayo in 2022 and is eligible to receive an additional $35.0 million sales-based milestone upon the achievement of a specified amount of worldwide net product sales of Libtayo in 2023 (aggregate of $100.0 million in sales-based milestones eligible to be earned under the terms of the A&R IO LCA). The Company also pays Sanofi an 11% royalty on net product sales of Libtayo through March 31, 2034. The transaction was accounted for as an asset acquisition and amounts paid to Sanofi in connection with obtaining the worldwide rights to Libtayo, including the up-front payment and any contingent consideration, are recorded as an intangible asset.

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. Agreed-upon development expenses incurred by the Company and Bayer are generally shared equally. Bayer markets EYLEA outside the United States, and the companies share equally in profits and losses from such sales.

Amounts recognized in the Company's Statements of Operations in connection with its Bayer collaboration are as follows:

	Statement of Operations Classification	Three Months Ended March 31,
(In millions)		2023		2022
Regeneron's share of profits in connection with commercialization of EYLEA outside the United States	Collaboration revenue	$	331.6	$	338.4
Reimbursement for manufacturing of ex-U.S. commercial supplies	Collaboration revenue	$	25.3	$	25.0
One-time payment in connection with change in Japan arrangement	Collaboration revenue	$	—	$	21.9
Regeneron's obligation for its share of Bayer R&D expenses, net of reimbursement of R&D expenses	(R&D expense)/Reduction of R&D expense	$	(13.4)	$	0.3

The following table summarizes contract balances in connection with the Company's Bayer collaboration:

	March 31,		December 31,
(In millions)	2023		2022
Accounts receivable, net	$	356.8	$	348.2
Deferred revenue	$	134.3	$	131.9

c. Roche

The Company is a party to 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). Under the terms of the collaboration agreement, the parties jointly fund certain studies, and the Company has the right to distribute the product in the United States while Roche has the right to distribute 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.

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

	Statement of Operations Classification	Three Months Ended March 31,
(In millions)		2023		2022
Global gross profit payment from Roche in connection with sales of Ronapreve	Collaboration revenue	$	222.2	$	216.3

Reimbursement of research and development expenses from Roche was not material for the three months ended March 31, 2023 and 2022.

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

	March 31,		December 31,
(In millions)	2023		2022
Accounts receivable, net	$	220.6	$	396.6

d. Sonoma Biotherapeutics, Inc.In March 2023, the Company and Sonoma Biotherapeutics, Inc. entered into a license and collaboration agreement to bring together the Company's VelociSuite® technologies with Sonoma's technology platform for the discovery, development, and commercialization of novel regulatory T cell (Treg) therapies for autoimmune diseases. In connection with the agreement, the Company made a $45.0 million up-front payment (which was recorded to Acquired in-process research and development expense in the first quarter of 2023) and, in April 2023, the Company purchased an aggregate of $30.0 million of Sonoma preferred stock. Sonoma is also eligible to receive a $45.0 million development milestone payment. The Company and Sonoma will co-fund research and development activities and share equally any future commercial expenses and profits. The Company will have the option to lead late-stage development and commercialization on all products globally, with Sonoma retaining rights to co-promote all such products in the United States.