REGENERON PHARMACEUTICALS, INC. Q3 FY2024 earnings call

Management Statement and Operational Highlights

• Revenue Growth: Third quarter 2024 total revenues grew 11% to $3.72 billion, driven by higher Sanofi collaboration revenues, growth in Libtayo, and growth in EYLEA HD and EYLEA.
• Pipeline Updates: Upcoming readouts include interim Phase II lung cancer data for fianlimab + Libtayo, proof-of-concept data for Factor XI antibodies in thrombosis, and pivotal AERIFY studies for itepekimab in COPD. Also, updates on obesity programs, fianlimab-libtayo combination in melanoma, and bispecifics for hematology-oncology.
• EYLEA HD Data: Results from the Photon extension study in DME showed EYLEA HD achieved consistently longer dosing intervals and slower fluid re-accumulation compared to EYLEA, with sustained vision gains and a consistent safety profile.
• Dupixent Milestones: Approved for COPD in the US, EU, and China; Phase III ADEPT trial in bullous pemphigoid met primary and secondary endpoints; Phase III study in CSU confirmed results, supporting a potential FDA approval early next year.
• Libtayo Results: Five-year overall survival data from EMPOWER Lung 1 trial showed Libtayo monotherapy nearly doubled median overall survival in advanced non-small cell lung cancer with PD-L1 expression >50%.

Segment Performance

• Dupixent: Global revenues were $3.8 billion, with 24% constant currency growth, annualizing over $15 billion, and over 1 million patients on treatment worldwide.
• EYLEA HD and EYLEA: Combined net product sales were $1.54 billion, up 3% year-over-year. EYLEA HD generated $392 million in its full quarter on the US market. EYLEA HD and EYLEA maintained antiVEGF category leadership with a combined share of approximately 44%.
• Libtayo: Global net sales increased 24% year-over-year on a constant currency basis to $289 million, with US net sales growing 35% to $195 million in non-melanoma skin cancer.

Guidance

• Upcoming readouts by year-end include interim Phase II lung cancer beta for fianlimab + Libtayo and proof-of-contact data for Factor XI antibodies in thrombosis.
• In 2025, expect results from pivotal AERIFY studies for itepekimab in COPD, data on obesity programs, pivotal data for fianlimab-libtayo combination in first-line metastatic melanoma, and updates on food allergy treatment involving linvoseltamab, BCMA by CD3 bispecific, and Dupixent.
• Pipeline has ~40 programs in clinical development across various therapeutic areas.

Risks

• Competition: Biosimilar launches, such as the aflibercept 2-milligram biosimilar, pose competitive pressure.
• Supply Issues: Previous supply issues with Avastin and potential impacts on product uptake.
• Regulatory Uncertainties: Uncertainties around regulatory approvals for pipeline programs, including timing and requirements.

Question and Answer

Q: How are you thinking about EYLEA going forward with Amgen's biosimilar launch and potential pricing pressures?

A: EYLEA is a strong product with physician and patient comfort, but EYLEA HD is differentiated. We'll compete using education, data, and product features.

Q: Can you reiterate confidence in EYLEA HD quarter-over-quarter growth despite wholesaler inventory impact and tailwinds from Avastin supply issues?

A: We have confidence in EYLEA HD's product profile, but there was an inventory impact in the quarter. We expect the prefilled syringe launch by mid-2025 to be a catalyst.

Q: Elaborate on drivers for pricing pressure on EYLEA HD and outlook for the branded anti-VEGF market in context of biosimilars?

A: Pricing pressure exists in the competitive anti-VEGF category. EYLEA HD's clinical profile (durability, safety) helps it compete. The branded anti-VEGF market is competitive but EYLEA HD and EYLEA are well-positioned.

Q: Thoughts on the obesity program's protocol changes and trial expansion?

A: Added dosing arms to explore different doses and muscle preservation effects, with no new safety signals in healthy volunteer studies.

Q: Do you think the rate of biosimilar erosion for Lucentis is a good proxy for EYLEA and differences in commercial dynamics?

A: Too early to comment, but EYLEA has a differentiated product in EYLEA HD, making the situation different from Lucentis erosion.