REGENERON PHARMACEUTICALS, INC. Q1 FY2025 earnings call

Leonard Schleifer reviewed key performance drivers, noting mixed results with EYLEA challenges offset by other portfolio and pipeline advances. George Yancopoulos highlighted pipeline advancements: Dupixent had approvals in new indications and priority reviews, oncology efforts included Libtayo submissions and combinations, hematology had the Factor XI program, obesity had a muscle-sparing study, and genetic medicines had progress. Marion McCourt discussed commercial performance, noting EYLEA HD and EYLEA combined U.S. net sales decline due to inventory and competition, but EYLEA HD's growth, and Dupixent's strong global and U.S. sales with multiple indications and COPD launch momentum. Libtayo also showed growth in U.S. and international markets.

In the first quarter of 2025, EYLEA U.S. net sales were $736 million, down 39% compared to the first quarter of the previous year and 38% compared to the fourth quarter of 2024. EYLEA HD U.S. sales were $307 million, up 54% year-over-year and essentially flat sequentially. Dupixent's global net product sales grew 20% on a constant currency basis compared to the first quarter of 2024. Libtayo in the U.S. grew 21% compared to the first quarter of 2024. Combined U.S. net sales of EYLEA and EYLEA HD were $1.04 billion, down 30% sequentially. Dupixent achieved global net sales of $3.7 billion, a 20% year-over-year increase on a constant currency basis. Libtayo's first quarter global net sales grew 8% year-over-year on a constant currency basis to $285 million, with U.S. net sales reaching $193 million, up 21%.

Regeneron updated its 2025 gross margin guidance to the range of 86% to 87% due to higher-than-expected inventory write-offs in the first quarter. It generated $816 million in free cash flow in the first quarter, ended the quarter with $17.6 billion in cash and marketable securities and approximately $2.7 billion in debt. It continues to monitor pharmaceutical sector tariffs, with no expected material impact from previously enacted tariffs.

Risks include FDA approval-related issues with components for EYLEA HD pre-filled syringe, uncertainty around sector-specific tariffs, and political risks affecting biopharma innovation such as FDA disruption, questioning of medical science, and drug price pressure.

Q: Regarding the EYLEA HD CRL for the pre-filled syringe, can you elaborate further on the question posed by the FDA and compare to the original EYLEA HD CRL?

A: Leonard Schleifer explained that the FDA's questions relate to components from third-party suppliers, similar to previous CRLs but with the component supplier having responded expeditiously.

Q: How do you prioritize Factor XI antibody indications and think about timing of launches?

A: George Yancopoulos said they prioritize indications showing favorable anticoagulation and bleeding risk profiles, with Phase 3 studies beginning to enroll this year.

Q: Any updated thoughts on when the foundation funding might reopen and volumes moving back to branded agents?

A: Leonard Schleifer discussed patient assistance programs, wanting to stimulate a matching program but noting uncertainty on others stepping up.

Q: Confirm if the component in the prefilled syringe for EYLEA HD is the same as in the European-approved one?

A: Leonard Schleifer confirmed it's the same component used in the European-approved device.

Q: Acknowledgment of regulatory performance and steps to improve?

A: Leonard Schleifer took responsibility, noting increased FDA scrutiny on third-party suppliers post-COVID, but praised regulatory and manufacturing teams.

Q: Evolution of understanding on IL-33 for itepekimab and guidance for further expansion?

A: George Yancopoulos discussed insights from genetics and ongoing studies guiding further expansion.

Q: Percent of enrollment in EYLEA HD monthly dosing submission and confidence?

A: Leonard Schleifer said the submission was accepted for review, so no deficiency.

Q: Hypothetical redesign of patient assistance program for Medicare?

A: Leonard Schleifer suggested allowing sponsors to provide copay assistance directly.

Q: Tightening of capital expenditure guidance and context of manufacturing announcements?

A: Chris Fenimore said the guidance was lowered due to timing, but capital plans remain committed.

Q: Big picture question on biopharma innovation risks and engagement with Washington?

A: Leonard Schleifer discussed engaging with Washington leadership to maintain scientific innovation and influence policy.