Regeneron Pharmaceuticals Q1 2022 Earnings Call Transcript

Quartr
Provided by Quartr
May 4, 2022

There are 12 speakers on the call.

Operator

Welcome to the Regeneron Pharmaceuticals First Quarter 2022 Earnings Conference Call. My name is Gigi, and I'll be your operator for today's call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. Please note that this conference is being recorded.

Operator

I will now turn the call over to Ryan Crowe, Vice President, Investor Relations. You may begin.

Speaker 1

Thank you, Gigi. Good morning, good afternoon, and good evening to everyone listening around the globe. Thank you for your interest in Regeneron, Welcome to our Q1 2022 earnings conference call. An archive of this webcast will be available on our Investor Relations website shortly after the call ends. Joining me today are Doctor.

Speaker 1

Leonard Schleifer, Founder, President and Chief Executive Officer Doctor. George Yancopoulos, Co Founder, President and Chief Scientific Officer Marion McCourt, Executive Vice President and Head of Commercial and Bob Landry, Executive Vice President and Chief Financial After our prepared remarks, we will open the call for Q and A. I would also like to remind you that remarks made on this call today include Forward looking statements about Regeneron. Such statements may include, but are not limited to, those related to Regeneron and its products and businesses, Financial forecasting guidance, development programs and related anticipated milestones, collaborations, finances, regulatory matters, Payer coverage and reimbursement issues, intellectual property, pending litigation and other proceedings and competition. Each forward looking statement is subject to risks and uncertainties that Could cause actual results and events to differ materially from those projected in that statement.

Speaker 1

A more complete description of these and other material risks Can be found in Regeneron's filings with the United States Securities and Exchange Commission, including its Form 10 Q for the quarterly period ended March 31, 2022, which was filed with the SEC this morning. Regeneron does not undertake any obligation to update any forward looking statements, whether as a result of new information, future events or otherwise. In addition, please note that GAAP and non GAAP measures will be discussed in today's call. Information regarding our use of non GAAP financial measures and a reconciliation of those measures to GAAP available on our financial results press release, which can be accessed on our website. Once our call concludes, Bob Landry and the IR team will be available to answer Any further questions?

Speaker 1

This earnings call is neither an offer to purchase nor a solicitation of an offer to sell securities of CheckMate Pharmaceuticals, Inc. In connection with the tender offer for CheckMate stock, Regeneron and Scandinavian Acquisition Sub, Inc. Filed with the SEC and tender offer statement on Schedule TO Another tender offer materials and CheckMate filed a solicitation recommendation statement on Schedule 14D-nine with the SEC. Copies of the documents filed with the SEC by Regeneron and CheckMate are available free of charge on Regeneron's website at investor. Regeneron.com or on Checkmate's website at ir.checkmatepharma.com as applicable or at the SEC's website at www.sec.gov.

Speaker 1

You should review such materials filed with the SEC carefully because they contain or will contain important information about the tender offer for CheckMate stock that holders of CheckMate And I'll now turn the call over to our President and Chief Executive Officer, Doctor. Len Schleifer. Len?

Speaker 2

Thank you, Ryan. Welcome to your first earnings call. Thank you. I hope all of our stakeholders will join me in giving you a warm welcome to the Regeneron team. Thanks to everyone joining the call as well.

Speaker 2

Following an exceptional 2021, Regeneron is off to a strong start in 20 Our first quarter results were driven by execution across the entire company as we continue to realize the benefits of our sustained investment in differentiated research and development along with our focus on commercial performance. We also continue to drive shareholder value through prudent capital allocation, including approximately 350,000,000 dollars of share repurchases in the 1st 3 months of this year. Regarding our financial performance, we delivered strong double digit revenue And non GAAP earnings per share growth, excluding revenue contributions from our investigation of COVID antibody cocktail, Revenues grew 25%, reflecting our increasingly diversified core business, which continues to thrive. For EYLEA, global net sales grew 11% to nearly $2,400,000,000 in the Q1, including $1,500,000,000 of revenues in the United States up 13% versus last year, which outpaced the U. S.

Speaker 2

Anti VEGF category growth. And yet another milestone for EYLEA, after more than 10 years, we recently surpassed 50,000,000 EYLEA injections globally, a testament to its well established efficacy and safety profile. We believe EYLEA continues growing diabetic population as well as the potential for our investigational flivoset 8 milligrams to complement and enhance our retinal franchise. For Dupixent, in quarter 1, global revenues for the quarter exceeded $1,800,000,000 An increase of 43% to last year as we continue to redefine the treatment of type 2 inflammatory diseases. A significant opportunity remains to reach even more patients in already approved indications and we look forward to potentially launching Dupixent And 7 new indications in the U.

Speaker 2

S. Later this year and in early 2023, including pediatric atopic dermatitis, Eosinophilic esophagitis and prurigo nodularis. Collectively, approximately 200,000 U. S. Patients Suffering from these three indications today, but currently have no FDA approved systemic treatment options.

Speaker 2

In oncology Libtayo continues to capture significant share in FDA approved non melanoma skin cancer indications, where it is considered the standard of care. Beyond dermato oncology, we're beginning to generate momentum in monotherapy non small cell lung Hoping to build the foundation for potential launch of Libtayo plus chemotherapy later this year, which would allow Libtayo to address a much larger population of non small cell lung cancer patients. As we've said before, we continue to consider Libtayo to be foundational to our immuno oncology development strategy and expect it to serve As the backbone for our investigational clinical program in combination with various antibodies bispecifics and costimulatory bispecifics In our pipeline as well as other pipeline candidates, including those from our collaborations. In April, we announced our agreement to acquire CheckMate Pharmaceuticals, Regeneron's first ever acquisition of a company. Upon closing, we expect CheckMate's Differentiated Ttole receptor-nine agonist, vedutolimod, will add a promising new modality to Regeneron's pipeline on Looking ahead, we remain on track for the second half of this year to share data In difficult to treat solid tumors such as ovarian and prostate cancers, to submit a BLA for odronextumab, a potentially best class CD20xCD3 bispecific for refractory B cell lymphomas and to advance Regeneron 5,458, Our BCMA by CD3 bispecific.

Speaker 2

Finally, regarding our ongoing COVID-nineteen response, Regeneron remains committed to combating the virus as we head toward the likely endemic stage. We firmly believe that monoclonal antibodies We'll continue to play an important role, particularly to protect immunocompromised individuals who do not respond adequately to COVID-nineteen vaccines As well as to treat infected patients whom an oral antiviral therapy is not well tolerated or might trigger Serious drug drug interactions. We are progressing next generation antibodies that are designed to be active against multiple variants, including those of Omicron lineage and initiate the 1st in human study last month. Concurrently, as the FDA continues their review of our REGENCO BLA for COVID-nineteen treatment and prophylaxis, We're working closely and collaboratively with them and other global regulatory authorities to establish clinical and regulatory pathways to bring additional safe and effective monoclonal treatment options to patients as quickly as possible. In closing, we are excited about the strong commercial momentum for our in line portfolio and the progress we have made advancing our pipeline so far this year.

Speaker 2

For the remainder of 2022, we anticipate up to 8 additional U. S. And EU regulatory approvals, Up to 4 additional U. S. Or EU regulatory filings, pivotal data for a flibitz at 8 milligrams as well as various other data readouts From other pipeline programs, which George will discuss.

Speaker 2

We remain confident in the long term outlook for our business And our pipeline continues to be highly productive, and we are in a strong financial position, all of which positions Regeneron to deliver sustainable growth and long term value creation. Now, I will turn the call over to George.

Speaker 3

Thank you, Len. And I will start with ophthalmology today. At the recent angiogenesis meeting, we presented encouraging results For the Phase 2 Candela study of aflibercept 8 milligram in patients with wet AMD, Candela met the primary safety endpoints with no new safety signals observed And efficacy endpoints numerically favored Aflavacept 8 milligram in visual acuity, drying and other anatomical measures Through week 44. Phase 3 studies, photon in DME and PULSAR in wet AMD are ongoing. The primary objective of the Phase 3 study is to determine whether flibercept 8 milligram dosing can allow for more extended dosing intervals while maintaining efficacy and safety.

Speaker 3

Regarding Phase 3 design in both photon and the PULSAR studies, Patients are randomized at baseline to 3 groups, in every 8 week EYLEA 2 milligram arm, in every 12 week 8 milligram of flibroceptor arm and in every 16 week 8 milligram of flibroceptor arm following loading doses. The primary endpoint of both these studies is mean change in best corrected visual acuity or BCVA at week 48. The primary endpoint will be met if 8 milligramaflimasep is non inferior to 2 milligram EYLEA while being dosed less frequently. We anticipate results of both Photon and Pulsar in the second half of this year and if positive to file for regulatory approvals in the U. S.

Speaker 3

And EU by early 2023. Moving to Dupixent, which had a remarkable quarter in terms of clinical updates and regulatory progress. In January, we announced our 2nd positive Phase 3 study in prurigo nodularis, a disease with high unmet need. At the AAAAI and AAD meetings this year, we presented detailed data from the first positive Phase 3 study in prurigo nodularis. And we also presented detailed data from our positive Phase 3 studies in eosinophilic esophagitis and in chronic spontaneous urticaria or CSU in biologic naive patients.

Speaker 3

The 2nd Phase 3 CSU study in patients refractory to omalizumab Did not reach statistical significance in an interim analysis. And as announced in March, we have completed enrollment in the first of the 2 Phase 3 DUPIXENT studies in COPD and anticipate data from this first study to read out in the first half of next year. In terms of regulatory progress, we expect an FDA decision for Dupixent In children aged 6 months to 5 years with moderate to severe atopic dermatitis by the new June 9 PDUFA date. We're also excited about an upcoming trial in collaboration with the National Institute of Allergy and Infectious Diseases or the NIAID To assess efficacy and safety of Dupixent for asthma in underserved populations, including black and Hispanic children in the United States. Additionally, we're expecting an FDA decision for our supplementary BLA and eosinophilic esophagitis in patients 12 years and older by August 3rd, And we completed a regulatory submission for prurigo and angelaris indication with FDA acceptance of this application anticipated shortly.

Speaker 3

Moving to Libtayo and oncology. We are excited about the upcoming milestones in our oncology pipeline, including the FDA decision On our Libtayo chemo combo application for non small cell lung cancer, data readouts and potential regulatory filings for our hematology bispecifics, as well as initial data readouts from our bispecific antibodies to solid tumors. In hematology, ogenxtimab, our CD20xCD3 bispecific has the potential for best in class efficacy in both follicular And diffuse large B cell lymphoma and was recently granted fast track designation from the FDA for these indications. Detailed results of our first We recently published in Lancet Hematology and our registration intent programs in late stage follicular lymphoma and DLBCL Are expected to complete enrollment soon. Based on the safety profile we are observing from our updated step up dosing regimen, We believe odranexamab has the potential to be administered entirely within the outpatient setting.

Speaker 3

We look forward to filing with this updated data set later this year pending regulatory feedback from the FDA. Development of REGEN-five thousand four hundred and fifty eight, our BCMAxC3 bispecific investigated for relapsed or refractory multiple myeloma Remains on track and pending regulatory feedback, we are planning to submit regulatory approval in the first half of twenty twenty three. Studies in earlier lines of the disease as well as an umbrella study in multiple myeloma investigating 5,458 in combination with various standard care products and investigational candidates We'll begin enrollment shortly. In the second half of the year, we anticipate initial clinical data disclosures For 3 first in class bispecifics, our MUC16xCD3 monotherapy for late stage ovarian cancer, Our met by met bispecific antibody for met bolters non small cell lung cancer as well as our PSMAxCD28 costim bispecific in combination with Libtayo in late stage prostate cancers. For these late stage cancers, patients have limited options And showing any durable response would be a promising early sign to be confirmed with additional clinical studies also involving combinations.

Speaker 3

We continue to progress our strategic approach to oncology, which starts with Libtayo as our foundational anti PD-one therapy and is Augmented by logical combinations utilizing our broad oncology pipeline, whether it involves combining Libtayo with a second checkpoint inhibitor, As we are doing with our LAG-three antibody in melanoma and other settings with different combinations of bispecifics or with other agents in our portfolio. Briefly turning to our antibodies against COVID-nineteen. As we recently announced, the FDA extended its review of our REGEN CO BLA For COVID-nineteen treatment in prophylaxis with the new action date of July 13. This extension was due to ongoing discussions with additional data provided to the FDA on pre exposure prophylaxis use of REGEN CO. As this regulatory process continues, We are advancing next generation COVID-nineteen antibodies and initiated a first in human trial with a new candidate in April.

Speaker 3

We continue to believe that a major unmet need for COVID antibodies is in chronic disease prevention for immunocompromised patients and future development efforts will be addressing this population. Concluding with our Regeneron Genetics Medicine, where we and collaborates For siRNA collaboration with Alnylam, we are very excited about our 1st in class approach to combining siRNA With antibody therapeutics designed to maximize effect as well as duration of target blockade. The first of these is our C5 sRNA and antibody combination, simdiscipline plus pozolivimab. Phase 3 studies of the combination treatment for paroxysmal nocturnal hemoglobinuria Where PNH and myasthenia gravis are underway, we will be dosing patients shortly. In PNH, we are planning to test our combo in both naive and switch patients Tested against standard of care therapies, including rivulizumab and eculizumab.

Speaker 3

Beyond C5, several addition combination programs We're in our preclinical pipeline. We continue to work with Alnylam as leaders in the use of siRNA therapeutics to address non alcoholic steatohepatitis or NASH with several programs addressing novel targets discovered by the Regeneron Genetics Center. First data in NASH patients for ALN HSD are anticipated mid-twenty 22. We are progressing a second target PNPLA3 into the clinic later this year, and we have recently identified an additional novel promising target that has been validated by RGC and is awaiting peer review publication. We're also pleased to report a notable milestone that we on Alnylam initiated our first CNS targets siRNA clinical program targeting amyloid precursor protein or APP in development For both cerebral amyloid angiopathy and Alzheimer's disease.

Speaker 3

Showing that this SRN approach can reduce levels of the target Protein in the CNS has the potential to open the door for using this approach in multiple genetically defined neurodegenerative diseases. In the first quarter, we and Intellia provided an update on our joint CRISPR based knockout program for transthyretin amyloidosis. Just to remind you, this is the first example of achieving CRISPR based genomic editing in human beings. A recent update demonstrated greater than 90% reduction of transthaleritan durably achieved for the follow-up observation period In patients with hereditary transthorritin amyloidosis with choloneuropathy as well as acceptable safety observed so far. Our genetics medicine portfolio now includes the diverse pipeline of sRNA candidates that we are working on with Alnylam, targeting the diseases of the liver, the brain and the eye, As well as our CRISPR based approaches in collaboration with Intelian and our viral targeted gene delivery programs, such as with decibel addressing congenital forms of hearing loss And other internal programs.

Speaker 3

While still early, we think these groundbreaking approaches have the potential to change the practice of medicine. And with that, I will turn the call over to Marianne.

Speaker 4

Thank you, George. Our commercial performance in the Q1 reflects strong execution and the competitive strengths of our diversified and growing portfolio. Starting with Eylea, 1st quarter global net sales grew 11% year over year to nearly $2,400,000,000 Over the same period, U. S. Net product sales grew 13% to $1,520,000,000 as EYLEA continues to strengthen its leadership position.

Speaker 4

Across approved indications, EYLEA is the preferred anti VEGF treatment based on its differentiated efficacy and safety profile as well as extensive real world patient and physician experience. As Len mentioned, we are incredibly proud that Alea has helped improve or save The vision of patients around the world with more than 50,000,000 treatments since launch. Category growth in EYLEA market share continued to increase Across all approved indications, in diabetic eye disease, we've seen notable increases across the patient continuum from initial patient diagnosis Through the receiving ongoing EYLEA treatment, we believe diabetic eye disease will remain an important source of future growth for EYLEA as unfortunately most patients remain under diagnosed and undertreated. Beyond EYLEA, our investigational offlibercept 8 milligram clinical program Continues to generate excitement and a high level of interest within the retinal community. If supported by Phase 3 results, FLIRACET 8 milligram It has the potential to be a major enhancement to the anti VEGF treatment paradigm.

Speaker 4

In summary, we are confident in Regeneron's ability To maintain leadership over the long term based on our current EYLEA performance and future potential of aflopercept 8 milligram. Turning now to Libtayo. With 1st quarter global net sales of $125,000,000 in the U. S. Net sales were $79,000,000 based on steadily improving demand across FDA approved non melanoma skin cancer indications.

Speaker 4

The number of prescribers has increased In our non small cell lung cancer monotherapy indication based on growing brand awareness, positive prescriber feedback and an increasing number of institutions and networks that is included in Libtayo in protocols and pathways. We are working to build on this momentum ahead of the potential chemotherapy combination approval expected later this year That would dramatically expand the patient opportunity for Libtayo in lung cancer. And finally, on to Dupixent, which again We achieved remarkable growth for the quarter, demonstrated by a 43% increase in global net sales to over 1,800,000,000 Our performance is fueled by robust uptake across all approved indications as well as an expanding geographic footprint and potential future indications, Including use in younger patients, Dupixent is a transformational medicine for patients and prescribers with significant growth potential ahead. In the U. S, net product sales grew 38 percent to $1,300,000,000 In atopic dermatitis, Dupixent is the first line systemic treatment In patients with moderate to severe disease, healthcare specialists recognize Dupixent's differentiated profile, which includes dual anti IL-four For an IL-thirteen mechanism of action, compelling efficacy, rapid symptom relief and well established safety profile, More than 430,000 patients worldwide are currently on treatment across all indications And launch preparations are underway for the June potential label expansion for children as young as 6 months of age with atopic dermatitis.

Speaker 4

We estimate approximately 75,000 biologic eligible children in the U. S. Could benefit from Dupixent in this younger age group. We also look forward to potentially extending Dupixent's label to include additional dermatology conditions, including Praga Nodularis for patients Have no currently FDA approved medicines. Approximately 75,000 U.

Speaker 4

S. Patients with PN are in need of new treatment options and may benefit from Dupixent. In the highly competitive biologic asthma indication, Dupixent continues to grow based on its compelling differentiation for healthcare professionals based on its There are positive prescribing trends from the recent pediatric asthma launch, and nasal polyps Dupixent remains the preferred choice for both ENTs and allergists with rapid growth even 3 years after initial launch. Many patients with Type 2 or allergic disease suffer from another concomitant Type 2 disease. For example, in our atopic dermatitis clinical program, 40% of patients also had asthma.

Speaker 4

Dupixent is differentiated not only by its efficacy and safety profile in individual FDA approved Type 2 indications, but also its potential to simultaneously address multiple Type 2 diseases in the same patient. We look forward to expanding Dupixent into Even more Type 2 diseases, launch preparations are underway for synophilic esophagitis, where there are no FDA approved medicines And significant unmet need. Importantly, in our EoE clinical program, approximately 45% of patients also had Atopic dermatitis or asthma. If approved in EOE, we estimate at least 50,000 patients in the U. S.

Speaker 4

Could benefit from Dupixent in this indication. Key opinion leaders continue to provide positive feedback on our clinical data, especially given the lack of effective approved treatment alternatives for the patients who suffer from multiple EOE symptoms. Turning briefly now to Dupixent in markets outside the U. S. In the Q1, net product sales Through 61 percent to $485,000,000 Over the past year, Regeneron has expanded our commercial presence in several key markets outside the United States, and we are with progress so far, integrating our sales efforts with Sanofi.

Speaker 4

In summary, we see significant potential for Dupixent to continue to change the lives of patients and their families, and we will continue to advance initiatives that bring Dupixent to those in need. In conclusion, we are pleased with performance across our portfolio. We continue to advance our in line brands and are on track to deliver on future launches, positioning Regeneron for sustained and long term growth. Now, let's turn the call over to Bob.

Speaker 5

Thank you, Marion. My comments today are on Regeneron's financial results and outlook will be on a non GAAP basis, unless otherwise noted. Regeneron is off to a strong start in 2022 with double digit top and bottom line growth in the Q1 driven by execution across the business. 1st quarter total revenues grew 17% year over year to $2,970,000,000 Excluding global revenues related to the COVID-nineteen antibody cocktail total revenues grew 25%, demonstrating continued strength of our core business. 1st quarter total diluted net income per share grew 16% to $11.49 on net income of 1,300,000,000 Beginning with collaboration revenue and starting with Bayer.

Speaker 5

1st quarter 2022 ex U. S. EYLEA net Sales were $869,000,000 growing 7% on a reported basis and 13% on a constant currency basis versus Q1 2021. Total Bayer collaboration revenue was $385,000,000 of which we recorded 338,000,000 Our share of net profits from EYLEA sales outside the U. S.

Speaker 5

Total Sanofi collaboration revenue was $631,000,000 in Q1 of 2022 and grew 73% from the prior year driven by Dupixent. In this quarter, we recognized a $50,000,000 sales milestone upon achieving $2,000,000,000 of aggregate ex U. S. Sales for antibody collaboration products on a rolling 12 month basis. Finally, we recorded Roche collaboration revenue of $216,000,000 related to Roche's sales of RonaPrieve outside the U.

Speaker 5

S. We do expect additional revenue from this collaboration primarily in the second half of twenty twenty two. Regarding REGEN COV in the U. S, Consistent with our commentary from earlier this year, we did not record any U. S.

Speaker 5

Sales for REGEN COV in the Q1 of 2022. Absent the execution and fulfillment of an additional government contract, we do not expect to record any U. S. Sales for REGEN COVE this year. Other revenue in the Q1 of 2022 was $94,000,000 This includes a $30,000,000 upfront payment from our collaborator Ultragenyx to market Efkiza outside of the U.

Speaker 5

S. Moving now to our operating expenses. R and D increased 12% to 751,000,000 Driven by higher headcount in clinical manufacturing costs, including for next gen COVID antibodies, partially offset by lower clinical trial Starting in the Q1 of 2022, we are changing the presentation of our non GAAP results to include in process R and D acquired in connection with asset acquisitions as well as upfront and opt in payments related to license and collaboration agreements. Going forward, we will now include these charges in both GAAP and non GAAP results as a new line item called acquired in process research and development. In the Q1 of 2022, acquired IPR and D was $28,000,000 which includes a $20,000,000 opt in payment to our collaborator, As I said, in full year 2021, there were $44,000,000 of aggregate upfront payments excluded from non GAAP R and D expense, all of which were recorded in the Q4 of 2021.

Speaker 5

SG and A expense increased 10% year over year to 389,000,000 primarily due to costs related to growth initiatives for EYLEA and higher headcount to support our expanding organization. COCM increased 58% year over year to $198,000,000 due to higher sales in Dupixent And an increase in shipments of commercial supplies of Praulant for Sanofi outside the United States. Finally, the Q1 2022 effective Tax rate was 11.6% compared to 10.5% in the prior year. Shifting now to cash flow and the balance sheet. In the Q1 of 2022, Regeneron generated $2,000,000,000 in free cash flow, inclusive of collections from the U.

Speaker 5

S. Government Sales of REGEN COVE recorded in the Q4 of 2021 and ended the Q1 of 2022 with cash and marketable securities Less debt of $11,400,000,000 We continue to deliver on our capital allocation priorities. Last month, we announced the agreement to acquire CheckMate Pharmaceuticals for total equity value of approximately 250,000,000 Earlier this week, we launched the tender offer for CheckMate Shares and expect this deal to close in mid-twenty 22, subject to receipt of regulatory approval and other customary closing conditions. In addition, we repurchased $352,000,000 Of our shares in the Q1 of 2022, we continue to be opportunistic buyers where we see dislocation between our stock price and our intrinsic valuation. I will conclude with select updates to our full year 2022 guidance and outlook.

Speaker 5

We're updating full year R and D guidance to be in the range of $2,900,000,000 to $100,000,000 The increase in guidance is driven by clinical manufacturing costs for next gen COVID antibodies, most of which were recorded in the Q1 and advancing programs across our pipeline. We also now expect our full year effective tax rate to be in the range of 12% to 14%. A complete summary of our latest full year guidance is available in our press release issued earlier this morning. In conclusion, our core business is performing well and continue to make investments in our R and D engine supported by our strong financial position, leaving Regeneron well positioned for sustainable long term growth. With that, I will pass the call back to Ryan.

Speaker 1

Thank you, Bob. Gigi, that concludes our prepared remarks. We'd now like to open the call for Q and A. With more than 20 callers in the queue and to ensure we are able to address as many questions as possible, we will answer only one question from each caller before moving to the next. Gigi, please go ahead.

Operator

Our first question comes from the line of Chris Raymond from Piper Sandler. Your line is now open.

Speaker 6

Hey, thanks for taking the question. Just a question maybe for Marion if I can on EYLEA and sort of the competitive set. I know you guys have said feedback from the market and VIBISMO has been somewhat muted, but it's actually kind of striking how different Roche is sort of The reception of the drug, they highlight a lot of enthusiasm for stocks and there's a lot of talk about what will happen after a permanent J code. But I know you guys have a lot of levers to pull here, not least of which is launching the high dose format of EYLEA. But Can you talk a little bit about the rebates, how they are playing into your counter strategy in the maybe near to intermediate term and how we should be thinking

Speaker 4

Chris, happy to give you some characterization The market, first let me comment on EYLEA and as we reported today, our performance certainly with EYLEA in a very competitive marketplace more than our fair share of the market growth, but also competitive share gains across indications. As a reminder, in the overall market, we have about 50% of the VEGF category market share with EYLEA and in the branded marketplace over 75% of the branded market share. I really do think it's probably best to let Roche comment on uptake of their new product in the marketplace. I'll share that Prescribers and key opinion leaders comment to us on the importance of the demonstrated safety they see with EYLEA, the efficacious Your profile that we have and certainly the extensive consideration across indications and in market use that has As it relates to other items on pricing and things of that sort, generally, we don't comment, But I certainly will say that looking ahead, we see strong leadership with EYLEA and a profile that is Certainly, you're beating the category in terms of experience, uptake and use.

Speaker 1

Thank you. Next question, Gigi.

Operator

Thank you. Our next question comes from the line of Cory Kasimov from JPMorgan. Your line is now open.

Speaker 1

Great. Good morning, guys. Thanks for taking my question. To follow-up on EYLEA, I wanted to ask about The high dose formulation, assuming the results read out as you anticipate, how do you think about this product potentially sliding into the treatment landscape? Gabe, is it possible that this could broadly take over from your current dose or would you expect it to be primarily used in certain segments of the market?

Speaker 1

Thank you.

Speaker 2

So I

Speaker 4

think at this point, we'll want to wait and look at product profile as the clinical data matures. And then certainly as we move into launch preparation planning, we'll be considerate of how the profile matches up against Patient need and opportunity. So I think more to come on specifics on uptake. We remain optimistic, but of course, we need to wait and see how the clinical data

Speaker 1

Thank you. Gigi, next question please.

Operator

Thank you. Our next question comes from the line of Evan Segarman from BMO Capital Markets. Your line is now open.

Speaker 7

Hi, guys. Thank you so much for taking the question. I love if you could expand on some of the rationale behind acquiring or proposing to acquire CheckMate Pharmaceuticals. Anything in the data that was particularly notable when you were doing your diligence that piqued your interest? And do you expect to go forward combining their asset with Libtayo versus, say, nivolumab or pembro as they had on their prior trials.

Speaker 7

Thank you.

Speaker 2

I am sure, this is Lanny here. I'm sure George would love to stand upon the thinking, but unfortunately, because we just launched The tender offer, we're really not committed to have that discussion. We'll look forward to that discussion, Assuming that the deal closes around the middle of the year as we anticipate. Fair enough, Glenn. Fair enough.

Speaker 2

Thank you. No, it's all right. But because we couldn't answer that question, if you get back in the queue, we'll come back to you for another question.

Speaker 7

Fair enough.

Speaker 1

Thanks, Evan. Gigi, next question.

Operator

Our next question comes from the line of Salveen Richter from Goldman Sachs. Your line is now open.

Speaker 4

Good morning. Thanks for taking my question. On these initial bispecific data sets in solid tumors in the second half, could you just speak to What exactly we're going to see initially and then what you would like to what you would want to see from the data set in terms of being clinically meaningful.

Speaker 3

Well, as I indicated in my Basically, we're going into late stage patients, heavily pretreated. We're hoping to actually be able to report on seeing objective responses and the number and the duration Of the responses is what we're looking for. We would love to be able to see significant numbers of durable responses showing that Each one of these novel agents is really making a difference in the latest stage patients that of course We'd open up for each one of them, we think very important opportunities, in terms of both those late stage But also particularly with logical combinations going back into earlier and earlier stage patients. So each one of them could become then A significant program, not only in monetary, but in combination with logical other agents. So as I said, responses with duration is what we're looking for in all three of those programs.

Speaker 2

Just to amplify a little bit To make sure nobody missed what George just said is that it seems to be the case that with these types of reagents, much of this is the case with other anti cancer agents That while you start in the latest, most difficult patients, there is better activity in earlier lines with these kinds of immune reagents. So finding activity in the late heavily pretreated would be very encouraging.

Speaker 1

Thanks, Glenn and George. Gigi, next question please.

Operator

Thank you. Our next question comes from the line of Brian Abrahams from RBC Capital Markets. Your line is now open.

Speaker 7

Good morning. Congrats on all the progress, and thanks so much for taking my question. Can you elaborate a little bit more on the safety benefit that you're seeing for otranexamab stepped up dosing? And I guess what it means in terms of differentiating versus Other bispecifics and development and ultimately CAR T and then your confidence that, you'll retain similarly strong efficacy with this dose. Thanks.

Speaker 3

Yes. We actually had initiated the concept for bispecifics in general as we were very early players in the field of this concept The step up dosing and what it seems to be being confirmed by our own data and other people's data Is that when you give them initially at low doses and gradually stepped up to your Optimal dose, you are reducing the incidence of severe side effects and particularly cytokine release syndrome. We had actually pretty low rates with our original. So our original dosing regimen was also a step up dosing regimen. And in collaboration with the FDA, we redefined the stepped up dosing and came up with a even More gradual program.

Speaker 3

It only extends the timing to get to maximum dose by 1 week and we're still obviously getting to that same dose. And what we're saying is that from the early read from the new step up dosing, which presumably will give you The detailed data at some point in the future, the results are looking very promising. The already low rate of Significant cytokine release syndrome that we were seeing looks like it's depressed even further down to rates where we think as I stated, We will be able to use this regimen and this approach in the outpatient setting. So it's just very promising that we've come up with the safe It looks like to be a safe protocol

Speaker 2

that could

Speaker 3

be used in outpatient settings and it's getting to the same Maximum dose in a pretty short period of time as well.

Speaker 7

Thanks so much.

Speaker 1

Gigi, next question please.

Operator

Thank you. Our next question comes from the line of Carter Gould from Barclays Capital. Your line is now open.

Speaker 8

Great. Good morning. One for me. I I want to understand, I guess, how you're thinking about your broader CV effort. We've heard from a number of larger pharma and biotech companies sort of rededicating themselves to CV recently.

Speaker 8

When you map out the indications and products that argue you have one of the broader pipelines across CV, but you don't really get much credit for it and Praluent and FQs that remain relatively Small contributors to your sales. So, do you see this being a major commercially relevant area for Regeneron going forward? I'd just like to understand your ambitions here a little bit better. Thank you.

Speaker 2

Yes. We have not obviously realized what we think is the full potential of our CV expertise and capabilities, and we are exploring ways on how to do that, Some of which may require us to rethink combinations of both types of reagents and targets. And hopefully, you'll hear more about that. But we would agree, right now, it's not a major contributor to our near term performance.

Speaker 1

Okay. Thank you. Gigi, next question please.

Operator

Our next question comes from the line of Brian Skorney from Baird. Your line is now open.

Speaker 9

Hi, this is Luke Herman on for Brian Skorney. Could you talk a bit more about 5

Speaker 3

Yes. Well, in small numbers, We have very competitive response rates with deep responses and duration That we think for these late stage patients should be able to support registration. If we can replicate it in the larger Phase 2 registrational possible study that we are undertaking. We continue to see a very acceptable safety and tolerability profile. And as you said, this is just sort of the first step in the whole program.

Speaker 3

We are very excited about combinations And we're also very excited about moving to earlier lines of therapy. In terms of combinations, as we've talked about before, It's very logical and the preclinical data are very compelling that combinations with so called co stimulatory bispecifics That also bind to a target on the same myeloma cells, but now activate what we and others refer to as single tube We'll be very exciting and has really the potential to enhance responsiveness and deepen responsiveness and deepen duration. We have a series of additional next generation candidates as well that we could layer on top of that next series of logical combinations, which And we're also thinking that obviously as Len already Mentioned, going to earlier lines of therapy is only going to increase the responsiveness and the opportunities to get longer and longer response And dare I say even potentially cures. So that's the basic summary of our programs. Get registration in the late night late setting by replicating the data that we've seen With our ongoing registration possible Phase 2 study, adding combinations to enhance responses, Deepening responsiveness and duration.

Speaker 3

And 3, going into earlier lines of therapy, as well.

Speaker 1

Thanks, George. Gigi, next question please.

Operator

Thank you. Our next question comes from the line of Brittany A. Woods from Cowen and Company. Your line is now open.

Speaker 4

Good morning, everyone. This is Britney on for Tyler. Congrats on another strong quarter and thanks for taking our questions. So a multi part question a bit related on the REGEN COV cocktail. For the ongoing studies of the next gen candidates, when do you suspect that you will be File for approval, what will the regulatory path forward look like?

Speaker 4

And also if we continue to be in a relatively low case period as We enter the endemic phase. What could a pivotal trial ultimately look like there?

Speaker 3

These are all really great questions. And we are continuing to discuss our regulatory path both for getting our Hopefully full approval for our existing cocktail, but also the regulatory path going forward for next generation With the FDA, that's an ongoing discussion that's has potential to change And obviously associated studies to support that program has the potential to change. So we're not at this point Talking about the details of either, but great questions.

Speaker 2

And suffice it to say the complexities are increased when you have to start thinking about Supply as well. So as George said, we're in discussions with the agency about what it would take to get an authorization, But you're always chasing the next variant, and we have probably what we think is the Greatest end to end capabilities in this space as is out there, but still knowing which variant to manufacture for Rich antibody and how to keep chasing that, it's a fairly complex situation. We're committed to try and Make monoclonal is an important part of the solution, and I think they can be, but it is going to require Some artful science, so to speak.

Speaker 1

Thank you. Gigi, next question please.

Operator

Our next question comes from the line of Dane Leone from Raymond James. Your line is now open.

Speaker 9

Hi. Thank you for taking the questions and congratulations on all the progress across all of your programs. One question for me on the Photon and Pulsar outcomes. It's been interesting to hear your narrative over many years now Through EYLEA, and your team's generally been right in terms of next generation efforts that kind of failed to Displace EYLEA as the standard of care. And to that point, I'm a little interested from your Commentary on the Candela readout and how that impacts your interpretation of Photon and Pulsar, meaning What does your team really think ends up being a differentiated outcome for those patients that are able to treat and extend on the high dose Out to Q16 week, and does that have to be a comparison to what read out with parisimab studies to make it a compelling Drug option or a higher dose option in the market to complement EYLEA.

Speaker 9

And the context for this, I guess, I'd put in is you guys have Generally contended that a lot of these studies comparing against per label EYLEA are not actually fair studies to be running. Parizumab obviously used an extra loading dose, but in the real world, the treatment extended EYLEA versus any of these other agents is actually quite equivalent. So I'd be just interested to hear how you think that the contextualization of these high dose of Libercept studies Really informed of who should get the higher dose if and when it becomes available. Thank you very much.

Speaker 2

That's going to be obviously a choice for clinicians to decide once they've seen all the data. But I think that an important consideration is still going to be not only the duration, because duration does matter, Efficacy, efficacy management, but safety. And I think the distinct advantage we have with high dose EYLEA Is that from a molecular point of view, whether you're having immunologic reactions and those sorts of things, EYLEA is a very well known entity. If we can transition to a higher dose With the same kind of safety and allow for longer duration, I think that is a more attractive paradigm in switching to a new molecular mechanism of action with unproven safety with 50,000,000 Injections behind it. And frankly, I do think even the FDA views, the when you're changing dosing paradigms The same molecule is different when you're bringing in a new molecule.

Speaker 2

So we can't say and we wouldn't Dare to speak for what clinicians will do once they see the data, but we do feel strongly that having the same Eylea backbone, if we get the safety that we anticipate thus far from the small Candela study And we get the kind of extension of duration, perhaps with more drying, we'll look at the actual numbers. I think that sort of transition is more efficient And then transitions that may occur with new agents.

Speaker 1

Thank you, Len. Thank you. Gigi, I think we have time for 2 more questions.

Operator

Thank you. Our next question comes from the line of Charlie Yang from Morgan Stanley. Your line is now open.

Speaker 10

Thanks for taking the question. This is Charlie Young On for Matthew. I just want to follow-up on the REGION 5,458 BCMA I guess my question here is, given the competitor is ahead, and potentially kind of getting approval Later this year, and they are already testing in combination with DARZALEX, for example. I'm just curious about kind of your confidence The 5,458 count in terms of its outlook and maybe just provide some thoughts on the competitive landscape and The commercial opportunity across different line of settings. Thank you.

Speaker 3

Yes. We think being Marginally ahead or behind here isn't really going to mean all that much. It's how good your actual agent is. And also of course what opportunities you have for combinations. And so as we said, if we can reproduce The efficacy we've seen in our initial studies in our potentially pivotal Phase 2 program, that'll make it a very, very competitive Agent in terms of efficacy and that's what obviously really matters, but also in terms of combinations.

Speaker 3

We do believe that we have some of the most interesting and potentially game changing combinations with novel agents such as these Post inventory bispecifics that are whole different opportunities than combinations with traditional and more traditional agents. So it can take The efficacy that hopefully we will see with the monotherapy both in the late stage setting, but just as if not more importantly in the earlier stage settings And really extend and take it to another level. And Being a little bit ahead or behind here is not going to be as important as producing really good data. Combinations, we think it's really Whether you can really come up and you have in your portfolio very interesting logical combinations that can really be game changing. And we think that we have those opportunities, which is why we're so excited about this program.

Speaker 1

Great. Thanks, Gigi, last question please.

Operator

Thank you. Our next question comes from the line of Mohit Bansal from Wells Fargo. Your line is now open.

Speaker 11

Great. Thank you for squeezing me in. Maybe a question on EYLEA, high dose EYLEA. Hey, Josh. I would love to get your take on the design of the DME trial.

Speaker 11

It seems like there are 5 monthly doses in the 2 milligram arm, just Like label, but only 3 for the 8 milligram arm. Could you please walk us through the rationale behind this difference and wouldn't it would hide Rosalia at a disadvantage?

Speaker 2

Thank you.

Speaker 3

Yes. Well, certainly the whole goal of the high dose EYLEA is to deliver the same Efficacy and safety, as Len said, safety being very important, but with the reduced injection And so honestly it is as you said more challenging to be accomplishing the results In Photon, with less loading injections than for the 2 milligram EYLEA, but that is the goal With the high dose, aflibercept. So it is challenging, but it is the higher dose. That's what the goal is and I guess the data will

Speaker 2

speak. Yes. And I think we can eliminate if we gave too high of a loading dose obviously, It might complicate some of the efficacy readouts. But as George said, I think based on what we know when we designed it, This looks like it could we're optimistic.

Speaker 3

All right.

Speaker 1

Thank you. I think we're done. Yes.

Speaker 3

Yes. Thank you.

Speaker 1

Thanks, Mohit. Gigi, we conclude the call.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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Earnings Conference Call
Regeneron Pharmaceuticals Q1 2022
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