Secondquarter 2023 revenues increased 11% to $3.16 billion versus second quarter 2022
Second quarter 2023 Dupixent®global net sales(recorded by Sanofi) increased 33% to $2.79 billion versus second quarter 2022
Second quarter 2023 EYLEA®U.S. net sales were $1.50 billion
Second quarter 2023 GAAP diluted EPS of $8.50 and non-GAAP diluted EPS(a)of $10.24
Two-year results reported for aflibercept 8 mg from pivotal PHOTON trial demonstrated durable vision gains at extended dosing intervals in diabetic macular edema (DME)
Aflibercept 8 mg BLA decision anticipated in third quarter 2023
TARRYTOWN, N.Y., Aug. 03, 2023 (GLOBE NEWSWIRE) -- Regeneron Pharmaceuticals, Inc. (NASDAQ:REGN) today announced financial results for the second quarter of 2023 and provided a business update.
"Regeneron delivered strong financial results in the second quarter of 2023 through increasingly diversified revenue streams, and we remain well-positioned for long-term growth," said Leonard S. Schleifer, M.D., Ph.D., Board Co-Chair, President and Chief Executive Officer of Regeneron. "In the past months, we have continued to advance our pipeline, in particular aflibercept 8 mg which we are progressing towards a potential FDA decision in the third quarter and for which we shared unprecedented two-year results in the pivotal PHOTON trial demonstrating durable vision gains at extended dosing intervals in patients with diabetic macular edema."
Financial Highlights
($ in millions, except per share data)
Q2 2023
Q2 2022
% Change
Total revenues
$
3,158
$
2,857
11 %
GAAP net income
$
968
$
852
14 %
GAAP net income per share - diluted
$
8.50
$
7.47
14 %
Non-GAAP net income(a)
$
1,182
$
1,127
5 %
Non-GAAP net income per share - diluted(a)
$
10.24
$
9.77
5 %
"I am pleased with the performance of our business in the second quarter of 2023, including incremental pipeline progress and exceptional commercial execution," said Robert E. Landry, Executive Vice President, Finance and Chief Financial Officer of Regeneron. "We continue to prioritize internal investments while allocating additional capital to opportunistic share repurchases and potential business development."
Business Highlights
Key Pipeline ProgressRegeneron has approximately 35 product candidates in clinical development, including a number of marketed products for which it is investigating additional indications. Updates from the clinical pipeline include:
Aflibercept 8 mg
In June 2023, the U.S. Food and Drug Administration (FDA) issued a Complete Response Letter (CRL) for the Biologics License Application (BLA) for aflibercept 8 mg for the treatment of patients with neovascular age-related macular degeneration (wet AMD), DME, and diabetic retinopathy (DR). The CRL was issued solely due to unresolved observations resulting from an FDA inspection at a third-party contract manufacturing organization, Catalent, that the Company engaged to complete vial-filling for aflibercept 8 mg. The CRL did not identify any issues with the aflibercept 8 mg clinical efficacy or safety profile, trial design, labeling, or drug substance manufacturing, and no additional clinical data or trials have been requested. The FDA has informed the Company and Catalent that certain manufacturing data and other information are required from Catalent to allow the FDA to approve aflibercept 8 mg; the Company expects that these data and information will be submitted to the FDA by mid-August 2023. The FDA has stated that it intends to prioritize the review of this submission, and therefore the Company anticipates the FDA will take action on the aflibercept 8 mg BLA during the third quarter of 2023.
In June 2023, the Company announced top-line, two-year (96 weeks) data for aflibercept 8 mg from the pivotal PHOTON trial in patients with DME. The longer-term data among aflibercept 8 mg patients who completed the trial demonstrated that the vast majority of patients were able to maintain or further extend the dosing intervals through two years. In addition, visual gains for aflibercept 8 mg remained consistent with those observed in the first year of the trial. In PHOTON, the safety of aflibercept 8 mg continued to be similar to EYLEA through two years and remained consistent with the known safety profile of EYLEA from previous clinical trials for DME. Results from the PHOTON study were presented at the American Society of Retina Specialists annual meeting in July 2023.
The two-year data from the pivotal PULSAR trial for aflibercept 8 mg in wet AMD continue to be expected in the third quarter of 2023.
In May 2023, Bayer announced that it initiated a Phase 3 study to evaluate the efficacy and safety of aflibercept 8 mg at extended dosing intervals compared to the standard of care, EYLEA, in macular edema following retinal vein occlusion (RVO).
Dupixent (dupilumab)
The FDA granted Breakthrough Therapy designation for uncontrolled COPD with an eosiniphilic phenotype based on the positive results of the Phase 3 BOREAS study. Based on ongoing discussions with the FDA, the Company expects that in addition to the BOREAS study results, data from the replicate Phase 3 NOTUS study will be needed to support an sBLA, and such data requirements remain under discussion with the FDA. The Company expects final results for the NOTUS study in mid-2024.
The Company and Sanofi presented positive Phase 3 results from the BOREAS trial in adults currently on maximal standard-of-care inhaled therapy (triple therapy) with uncontrolled COPD and evidence of type 2 inflammation at the 2023 American Thoracic Society International Conference. The results were also published in the New England Journal of Medicine.
In June 2023, the Ministry of Health, Labour and Welfare (MHLW) in Japan approved Dupixent for the treatment of adult patients with prurigo nodularis.
Oncology Programs
The Company announced promising data from three independent expansion cohorts of a Phase 1 trial for fianlimab, an antibody to LAG-3, in combination with Libtayo® (cemiplimab) in adults with advanced melanoma, which were also presented at the 2023 American Society of Clinical Oncology (ASCO) Annual Meeting. These results demonstrated that the combination led to clinically meaningful and durable results across multiple advanced melanoma patient populations. The safety profile of the combination was generally consistent with the safety profile of Libtayo monotherapy and other anti-PD-(L)1 agents, except for higher rates of adrenal insufficiency, which were successfully managed with steroid replacement.
The Company also presented updated positive data from two expansion dose cohorts from a pivotal trial for linvoseltamab, a bispecific antibody targeting BCMA and CD3, in patients with heavily pre-treated, relapsed/refractory multiple myeloma at the ASCO Annual Meeting. No new safety signals were identified.
The Company is investigating multiple CD28 costimulatory bispecific antibodies, including PSMAxCD28, EGFRxCD28, MUC16xCD28, and CD22xCD28, in ongoing Phase 1 trials in a variety of tumor settings in combination with Libtayo, or in combination with corresponding CD3 bispecifics. In the ongoing study of REGN5678, a costimulatory bispecific antibody targeting PSMA and CD28 in advanced prostate cancer, the Company has observed antitumor activity in combination with Libtayo as well as with REGN5678 monotherapy. In the Libtayo combination cohort, there have now been two immune-mediated Grade 5 adverse events (death), including one in July 2023. As a result, the Company has discontinued enrollment of patients receiving the combination of REGN5678 and full-dose Libtayo, and plans to explore REGN5678 combinations with lower doses of Libtayo. The Company also plans to enroll patients in a REGN5678 monotherapy cohort, as well as in combination with other immunotherapy modalities. Other costimulatory bispecific development programs continue their respective dose-escalation studies.
Itepekimab, an antibody to IL-33
The Phase 3 program investigating itepekimab in patients with COPD who are former smokers passed a recent interim futility analysis. The analysis was conducted by an Independent Data Monitoring Committee, and the Company and Sanofi remain blinded to the data. Results from the AERIFY-1 and AERIFY-2 studies are expected to be reported in 2025.
Corporate Update
The United States Supreme Court issued a unanimous opinion, ending a nearly decade-long patent dispute related to Praluent® (alirocumab). The decision affirms the United States Court of Appeals for the Federal Circuit’s opinion, which held that Amgen’s asserted U.S. PCSK9 patent claims were invalid.
Second Quarter 2023 Financial Results
Revenues
($ in millions)
Q2 2023
Q2 2022
% Change
Net product sales:
EYLEA - U.S.
$
1,500
$
1,621
(7
%)
Libtayo - U.S.
130
91
43
%
Libtayo - ROW
80
—
*
Praluent - U.S.
41
31
32
%
Evkeeza® - U.S.
19
11
73
%
Inmazeb® - U.S.
2
—
*
Total net product sales
1,772
1,754
1
%
Collaboration revenue:
Sanofi
944
678
39
%
Bayer
377
358
5
%
Other
(4
)
8
*
Other revenue
69
59
17
%
Total revenues
$
3,158
$
2,857
11
%
* Percentage not meaningful.
Net product sales of EYLEA in the U.S. decreased in the second quarter of 2023, compared to the second quarter of 2022, primarily due to a lower net selling price driven by changing market dynamics, including increased competition.
Sanofi collaboration revenue increased in the second quarter of 2023, compared to the second quarter of 2022, primarily due to the Company's share of profits from commercialization of antibodies, which were $751 million in the second quarter of 2023, compared to $497 million in the second quarter of 2022. The change in the Company's share of profits from commercialization of antibodies was driven by higher profits associated with an increase in Dupixent sales.
Refer to Table 4 for a summary of collaboration revenue.
Operating Expenses
GAAP
%Change
Non-GAAP(a)
%Change
($ in millions)
Q2 2023
Q2 2022
Q2 2023
Q2 2022
Research and development (R&D)
$
1,085
$
794
37
%
$
974
$
690
41
%
Acquired in-process research and development (IPR&D)
$
—
$
197
(100
%)
*
*
n/a
Selling, general, and administrative (SG&A)
$
652
$
476
37
%
$
562
$
418
34
%
Cost of goods sold (COGS)
$
192
$
149
29
%
$
163
$
137
19
%
Cost of collaboration and contract manufacturing (COCM)
$
213
$
148
44
%
*
*
n/a
Other operating (income) expense, net
$
(1
)
$
(17
)
(94
%)
*
*
n/a
* GAAP and non-GAAP amounts are equivalent as no non-GAAP adjustments have been recorded.
GAAP and non-GAAP R&D expenses increased in the second quarter of 2023, compared to the second quarter of 2022, driven by additional costs incurred in connection with higher headcount and headcount-related costs, the advancement of the Company's late-stage pipeline, the impact of the 2022 amendments to the Sanofi collaboration agreements, and increased manufacturing activity associated with the Company's earlier-stage product candidates.
Acquired IPR&D in the second quarter of 2022 included a $195 million charge related to the Company's acquisition of Checkmate Pharmaceuticals, Inc.
GAAP and non-GAAP SG&A expenses increased in the second quarter of 2023, compared to the second quarter of 2022, primarily due to an increase in commercialization-related expenses for Libtayo outside the U.S. (as effective July 1, 2022, the Company became solely responsible for the commercialization of Libtayo worldwide), higher headcount and headcount-related costs, and higher contributions to an independent not-for-profit patient assistance organization.
COCM expenses increased in the second quarter of 2023, compared to the second quarter of 2022, primarily due to the recognition of costs in connection with manufacturing commercial supplies of Dupixent.
Other Financial Information
GAAP other income (expense) included the recognition of net unrealized losses on equity securities of $31 million in the second quarter of 2023, compared to $164 million in the second quarter of 2022. GAAP and Non-GAAP other income (expense) also included interest income of $118 million in the second quarter of 2023, compared to $28 million in the second quarter of 2022.
In the second quarter of 2023, the Company's GAAP effective tax rate (ETR) was 10.6%, compared to 11.5% in the second quarter of 2022. In the second quarter of 2023, the non-GAAP ETR was 12.2%, compared to 13.6% in the second quarter of 2022.
GAAP net income per diluted share was $8.50 in the second quarter of 2023, compared to $7.47 in the second quarter of 2022. Non-GAAP net income per diluted share was $10.24 in the second quarter of 2023, compared to $9.77 in the second quarter of 2022. A reconciliation of the Company's GAAP to non-GAAP results is included in Table 3 of this press release.
During the second quarter of 2023, the Company repurchased shares of its common stock and recorded the cost of the shares, or $723 million, as Treasury Stock. As of June 30, 2023, an aggregate of $2.3 billion remained available for share repurchases under the Company's share repurchase program.
2023 Financial Guidance(c)
The Company's full year 2023 financial guidance consists of the following components:
2023 Guidance
Prior
Updated
GAAP R&D
$4.225–$4.465 billion
$4.315–$4.455 billion
Non-GAAP R&D(a)
$3.725–$3.925 billion
$3.825–$3.925 billion
GAAP SG&A
$2.490–$2.680 billion
$2.540–$2.680 billion
Non-GAAP SG&A(a)
$2.130–$2.280 billion
$2.180–$2.280 billion
GAAP gross margin on net product sales(d)
87%–89%
Unchanged
Non-GAAP gross margin on net product sales(a)(d)
89%–91%
Unchanged
COCM(e)*
$820–$880 million
Unchanged
Capital expenditures*
$800–$900 million
$760–$830 million
GAAP effective tax rate
8%–10%
8%–9%
Non-GAAP effective tax rate(a)
10%–12%
10%–11%
* GAAP and non-GAAP amounts are equivalent as no non-GAAP adjustments have been or are expected to be recorded.
A reconciliation of full year 2023 GAAP to non-GAAP financial guidance is included below:
