Collaboration, License, and Other Agreements

9 Months Ended

Sep. 30, 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 September 30,					Nine Months Ended September 30,
(In millions)		2023		2022			2023		2022
Antibody:
Regeneron's share of profits in connection with commercialization of antibodies	Collaboration revenue	$	863.0	$	551.1	*	$	2,250.6	$	1,463.0	*
Sales-based milestones earned	Collaboration revenue	$	50.0	$	—		$	50.0	$	50.0
Reimbursement for manufacturing of commercial supplies	Collaboration revenue	$	151.5	$	160.5		$	506.0	$	466.8
Other	Collaboration revenue	$	—	$	(0.2)		$	—	$	28.7
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	$	(25.8)	$	(4.3)		$	(66.7)	$	59.6
Reimbursement of commercialization-related expenses	Reduction of SG&A expense	$	135.5	$	108.6		$	384.0	$	311.1
Immuno-oncology(a):
Regeneron's share of profits in connection with commercialization of Libtayo outside the United States	Collaboration revenue	$	—	$	—		$	—	$	6.7
Reimbursement for manufacturing of ex-U.S. commercial supplies	Collaboration revenue	$	—	$	—		$	—	$	4.6
Reimbursement of R&D expenses	Reduction of R&D expense	$	—	$	—		$	—	$	42.7
Reimbursement of commercialization-related expenses	Reduction of SG&A expense	$	—	$	—		$	—	$	41.4
Regeneron's obligation for its share of Sanofi commercial expenses	SG&A expense	$	—	$	—		$	—	$	(19.9)
Regeneron's obligation for Sanofi's share of Libtayo U.S. gross profits	Cost of goods sold	$	—	$	—		$	—	$	(70.1)
Amounts recognized in connection with up-front payments received	Other operating income	$	—	$	—		$	—	$	35.1
* Net of one-time payment of $56.9 million to Sanofi in connection with the amendment to the Antibody License and Collaboration Agreement described below
(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 was entitled to receive sales milestone payments from Sanofi. During the three months ended September 30, 2023, the Company earned the final $50.0 million sales-based milestone from Sanofi, upon aggregate annual sales of antibodies outside the United States (including Praluent) exceeding $3.0 billion on a rolling twelve-month basis. 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 following table summarizes contract balances in connection with the Company's Antibody Collaboration with Sanofi:

	September 30,		December 31,
(In millions)	2023		2022
Accounts receivable, net	$	1,128.2	$	692.3
Deferred revenue	$	417.3	$	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 was eligible to earn an aggregate of $100.0 million in Libtayo sales-based milestones under the terms of the A&R IO LCA, of which they earned $65.0 million in 2022 and $35.0 million in 2023. 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 is responsible for commercialization activities 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 September 30,				Nine Months Ended September 30,
(In millions)		2023		2022		2023		2022
Regeneron's share of profits in connection with commercialization of EYLEA outside the United States	Collaboration revenue	$	349.9	$	315.3	$	1,031.0	$	993.4
Reimbursement for manufacturing of ex-U.S. commercial supplies	Collaboration revenue	$	27.2	$	17.5	$	79.7	$	60.3
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	$	(9.7)	$	7.1	$	(35.1)	$	10.3

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

	September 30,		December 31,
(In millions)	2023		2022
Accounts receivable, net	$	361.7	$	348.2
Deferred revenue	$	125.3	$	131.9

c. Roche

The Company is a party to a 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 its Roche collaboration are as follows:

	Statement of Operations Classification	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)		2023		2022		2023		2022
Global gross profit payment from Roche in connection with sales of Ronapreve	Collaboration revenue	$	—	$	6.4	$	222.2	$	230.9
Other	Collaboration revenue	$	(5.7)	$	—	$	(9.5)	$	—

Reimbursement of research and development expenses from Roche was not material for the three and nine months ended September 30, 2023 and 2022.

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

	September 30,		December 31,
(In millions)	2023		2022
Accounts receivable, net	$	—	$	396.6

d. Alnylam

In 2019, the Company and Alnylam Pharmaceuticals, Inc. entered into a global, strategic collaboration to discover, develop, and commercialize RNA interference ("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. In connection with entering into the collaboration, the Company made an up-front payment of $400.0 million to Alnylam, and also purchased shares of Alnylam common stock for $400.0 million. For each program, the Company provides Alnylam with a specified amount of funding at program initiation and at lead candidate designation. Under the terms of the collaboration, the parties perform discovery research until designation of lead candidates. Following designation of a lead candidate, the parties may further advance such lead candidate under either a co-development/co-commercialization collaboration agreement ("Co-Co Collaboration Agreement") (under which the parties are advancing ALN-APP and ALN-PNP, which are currently in clinical development) or license agreement.

During the three months ended September 30, 2023, the Company became obligated to pay Alnylam a $100.0 million development milestone, which was recorded to Acquired in-process research and development expense, upon the achievement of specified proof-of-principle criteria for the ALN-APP program. Alnylam is eligible to receive an additional $100.0 million clinical proof-of-principle milestone in connection with an eye program.

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

	Statement of Operations Classification	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)		2023		2022		2023		2022
Regeneron's obligation for its share of Alnylam R&D expenses, net of reimbursement of R&D expenses	(R&D expense)	$	(13.5)	$	(10.6)	$	(52.1)	$	(36.1)
Development milestone	Acquired in-process research and development	$	(100.0)	$	—	$	(100.0)	$	—

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

	September 30,		December 31,
(In millions)	2023		2022
Accrued expenses and other current liabilities	$	111.5	$	7.4

e. Sonoma

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.

f. Biomedical Advanced Research and Development Authority ("BARDA")

In August 2023, the Company expanded its Other Transaction Agreement ("OTA") with BARDA, pursuant to which the U.S. Department of Health and Human Services ("HHS") is obligated to fund up to 70% of the Company's costs incurred for certain development activities related to a next-generation COVID-19 monoclonal antibody therapy for the prevention of SARS-CoV-2 infection. The agreement could result in payments to the Company of up to approximately $326 million in the aggregate to support clinical development, clinical manufacturing, and the regulatory licensure process.

Amounts recognized within Other revenue in the Company's Statements of Operations in connection with this BARDA agreement were $34.2 million for the three months ended September 30, 2023.

The following table summarizes the Company's contract balances in connection with this BARDA agreement:

	September 30,
(In millions)	2023
Accounts receivable, net	$	34.2

g. Decibel

In 2017, the Company entered into an agreement with Decibel Therapeutics, Inc. to discover and develop new potential therapeutics to protect, repair and restore hearing (including DB-OTO, which is currently in clinical development, and preclinical programs for GJB2-related and stereocilin-related hearing loss). In connection with the agreement, the Company also purchased shares of Decibel stock.

In August 2023, the Company entered into an Agreement and Plan of Merger to acquire Decibel, and in September 2023, the Company completed its acquisition of Decibel. The Company paid $101.3 million in cash (or $4.00 per share of Decibel common stock), of which $6.6 million was attributed to post-combination services to be rendered by Decibel equity award holders, and as a result, was excluded from the amount of consideration transferred for purchase accounting. In addition, Decibel shareholders received one non-tradeable contingent value right ("CVR") per share of Decibel common stock, which entitles the holder to receive up to $3.50 per share in cash upon achievement of certain clinical development and regulatory milestones for DB-OTO within specified time periods. At closing, the Company recorded a liability related to the fair value of the CVRs of $43.7 million (see Note 6). The maximum aggregate amount that holders of the CVRs may be entitled to receive if all the milestones contemplated by the CVRs are achieved is approximately $97 million.

The fair value of the Company's investment in Decibel stock immediately before the acquisition date was $10.3 million.

The Decibel acquisition was accounted for as a business combination. In a business combination, the acquisition method of accounting generally requires that the assets acquired and liabilities assumed be recorded as of the date of the acquisition at their respective fair values. Amounts allocated to acquired in-process research and development are capitalized and accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the associated research and development efforts. Any excess of the purchase price (consideration transferred) over the fair values of net assets acquired is recorded as goodwill. Transaction costs in connection with a business combination are expensed as incurred.

The following table summarizes the amounts recognized for assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date:

	September 25,
(In millions)	2023
Cash and cash equivalents	$	42.2
Marketable securities	12.1
Deferred tax assets, net	58.1
Indefinite-lived intangible asset related to in-process research and development	42.5
Goodwill	5.2
Other assets and liabilities, net	(11.4)
	$	148.7

The final determination of fair values of assets acquired, liabilities assumed, and tax-related items will be completed no later than one year from the acquisition date.

h. Checkmate

In May 2022, the Company completed its acquisition of Checkmate Pharmaceuticals, Inc. for a total equity value of approximately $250 million. As a result of the transaction, which was accounted for as an asset acquisition, the Company recorded, during the three months ended June 30, 2022, (i) a charge of $195.0 million to Acquired in-process research and development and (ii) net assets of $61.7 million, including $26.4 million of cash and cash equivalents acquired, related to the assets acquired (including deferred tax assets and investments) and liabilities assumed.