Yahoo Finance Regeneron Pharmaceuticals Inc (REGN) Q1 2024 Earnings Call Transcript Highlights: Key Financial ...
Revenue: Grew 7% year-over-year to $3.1 billion, excluding COVID antibodies contributions.
Net Income: First quarter diluted net income per share was $9.55.
Free Cash Flow: Generated $1.4 billion in the first quarter.
Market Capitalization: Not directly mentioned, but financial health suggests a robust market cap.
Gross Margin: Approximately 89% on net product sales.
Sanofi Collaboration Revenue: Significant contributor to revenue growth.
Libtayo Global Net Product Sales: Increased by 45%.
Dupixent Global Net Product Sales: $3.1 billion, up 24%.
EYLEA HD Sales: $200 million in its second full quarter on the U.S. market.
Release Date: May 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Regeneron Pharmaceuticals Inc (NASDAQ:REGN) reported a solid start to 2024 with a 7% revenue growth year-over-year, excluding last year's revenue from COVID antibodies.
Dupixent global net product sales increased by 24% to $3.1 billion, reflecting strong growth across all approved indications.
EYLEA HD generated $200 million in its second full quarter on the U.S. market, outperforming recent launches in the anti-VEGF category.
Regeneron Pharmaceuticals Inc (NASDAQ:REGN) and Sanofi's sBLA for Dupixent for COPD treatment was accepted by the FDA for priority review, highlighting progress in expanding treatment indications.
The company's pipeline is robust with over 35 programs in clinical development, showcasing a broad and diversified portfolio aimed at sustainable long-term growth.
Negative Points
The FDA has requested additional efficacy analyses for Dupixent in treating COPD, which could potentially delay approval by up to 3 months if additional review time is needed.
First quarter R&D expenses grew by 17% year-over-year to $1.1 billion, reflecting significant ongoing investment which could impact short-term profitability.
Regeneron Pharmaceuticals Inc (NASDAQ:REGN) received complete response letters from the FDA concerning odronextamab for certain lymphomas, indicating challenges in gaining approval.
The company noted an adverse change in payer coverage for Praluent, leading to a gross to net adjustment and impacting financial expectations for this product.
Despite strong growth, there is increased competition in key therapeutic areas, including from upcoming biologics in COPD, which could impact market share and growth trajectory.
Q & A Highlights
Q: Congrats on the quarter. A question for George. George, there's a lot of interest, obviously, in your muscle sparing obesity program. I was wondering if you could speak to how you think this will differentiate versus competitor muscle-sparing programs and then within that, what will you be specifically paying attention to whenever Len decides to disclose the bimagrumab Phase II data? A: George D. Yancopoulos - Regeneron Pharmaceuticals, Inc. - Co-Founder, President, Chief Scientific Officer & Co-Chairman: Thanks. Great question. As when you block with other approaches like bimagrumab, you're blocking over a dozen members of the so-called BMP, GDF family and so forth. And that raises the concern because only a couple of those are actually involved in muscle preservation that you may end up doing more harm than good. What we have identified over the years is we identified 2 members of this very large family of almost 20 factors, which 2 are specifically involved in muscle preservation and we created antibodies to each of these 2 individually.
Q: Kind of a follow-up to Colin. When you think about endpoints in muscle sparing kind of approaches in obesity, what do you think FDA would accept. Right now, they're not really accepting dexa scans, they're just looking at weight loss. Do you think that they would evolve to look at quality of weight loss as a key endpoint asset space evolves? A: George D. Yancopoulos - Regeneron Pharmaceuticals, Inc. - Co-Founder, President, Chief Scientific Officer & Co-Chairman: Well, just to remind you, if you look at our paper where we did the nonhuman primate studies and so forth, is the first thing we're going to be looking for is there is the very real possibility of increased weight loss. And that might be the simplest regulatory endpoint of all. After that, if we don't see that, but we see better quality of weight loss, that could be manifested in a variety of ways, though we, of course, recognize that those would perhaps create more complicated ways of being regulated. So obviously, if you increase the fat loss while preserving muscle you should have dramatic benefits in metabolic parameters, which are often used in the field, particularly in people with diabetes and so forth as well as ultimately in terms of function by having maintenance of function as opposed to losing function and maintaining those sort of functional endpoints.
Q: I have a question on the EYLEA franchise. I just noticed that McKesson bought one of the largest GPOs, U.S. retina earlier this year and there's actually been -- as you guys know, a relatively long march of retina practices being rolled up by various private equity firms over the last few years. So I know this is something that's happening across a number of therapeutic specialty areas, but maybe just talk about how you see this phenomenon impacting the practice of ophthalmology in the U.S. and any changes to your go-to-market strategy? And I guess related, the inventory drawdown, we didn't see that happen last year. Was there any effect from maybe some of these changes in your customer base that sort of drove that? A: Marion E. McCourt - Regeneron Pharmaceuticals, Inc. - EVP of Commercial: Sure. So let me take the inventory item first, and then I'll come back to the overall marketplace. But this was in aggregate. As I mentioned, in the quarter, we saw a reduction in wholesaler inventory broadly of about $40 million. So that reflects market-wide. But that was a combination of 2 elements. It was a sequential drawdown of EYLEA inventory that was partially offset by a modest increase in EYLEA HD inventory ahead of the permanent J-Code on April 1. And then I would share on the overall market in all the categories where we participate, we're always very conscious of the segmentation of the market, targeting the market, what's occurring in terms of customer base and certainly, our strategies and our approach to the marketplace is reflective of that. And the range of customers we have, as you point out, in retina and how that market has evolved over time. And I think our commercialization approach has been very effective in addressing that market evolution.
Q: With regard to the COPD program here, it doesn't seem like this is an approvability question. So could you just speak to whether restrictions to specific subpopulations could be possible, albeit noting that you had a subpopulation analysis that was consistent with the broader data. A: Leonard S. Schleifer - Regeneron Pharmaceuticals, Inc. - Co-Founder, President, CEO & Co-Chairman: Yes, Salveen, thanks for the question. You're right. From our perspective, we think the data broadly supports the entire BLA and as well as all these analyses, the approval of the drug in eosinophilic COPD. As you might imagine, the FDA went anticipating or looking at a new class of biologics is very interested in checking it up and down and down and up and making sure that there's no subpopulation of the study that might be driving the data. So they might -- if one saw that, one might think about labeling it differently, but none of that has occurred. We've looked at all these analyses. We're going to submit them a way ahead of the schedule that they've asked for, and all of the analyses show a consistent and clinically meaningful reduction in the COPD exacerbations across all of these subgroups that have been asked for.
Q: For this initial severe food allergy study and the results by year-end, could you elaborate on exactly what will be reported and what you would hope to see to have early clinical proof of concept and how long do you anticipate that these patients would stay on Dupixent in order to maintain low or no IgE levels? A: George D. Yancopoulos - Regeneron Pharmaceuticals, Inc. - Co-Founder, President, Chief Scientific Officer & Co-Chairman: These are great questions. We hope from the first few patients if the results are as dramatic as they are in the preclinical studies that we'll be seeing meaningful indicators that we are really reversing severe food allergy. Of course, the first thing and the most important biomarker, as I said, is this evil immunoglobulin IgE, which you can both measure, but they are also routinely tested using these skin prick tests, which are how people are actually evaluated for allergies.
Q: Just had one on your LAG-3 program. Obviously, you guys are aware that Bristol discussed seeing a signal in a subset of lung cancer that benefits from a combination of PD-1 and LAG-3. So I would just love your latest thoughts on how to think about that in the context of both your program and then what you're hoping to see with this Phase II data later this
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
