August 5, 2014

Regeneron Reports Second Quarter 2014 Financial and Operating Results

- Second quarter 2014 EYLEA® (aflibercept) Injection global net sales increased 53% to $662 million (consisting of $415 million in the U.S. and $247 million in rest of world(1)) versus second quarter 2013
- Second quarter 2014 non-GAAP net income(2) increased 46% to $289 million, or $2.47 per diluted share

TARRYTOWN, N.Y., Aug. 5, 2014 /PRNewswire/ -- Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced financial results for the second quarter of 2014 and provided an update on development programs.

"Regeneron continued to make progress across all aspects of our business, delivering continued growth and another strong quarter,"said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron.  "In the last two months alone, we received approval for an additional indication for EYLEA in diabetic macular edema and reported positive clinical results from our late-stage portfolio with alirocumab in hypercholesterolemia, dupilumab in atopic dermatitis and sarilumab in rheumatoid arthritis."

Business Highlights

EYLEA^® (aflibercept) Injection for Intravitreal Injection

·    In the second quarter of 2014, net sales of EYLEA in the United States increased 26% to $415 million from $330 million in the second quarter of 2013. Net sales in the second quarter of 2013 were impacted by a modest decrease in distributor inventory. Excluding these changes in inventory, underlying demand for EYLEA in the second quarter of 2014 in the United States increased by approximately 22% year over year.

·    Bayer HealthCare LLC commercializes EYLEA outside the United States. In the second quarter of 2014, net sales of EYLEA outside of the United States⁽¹⁾ were $247 million, compared to $102 million in the second quarter of 2013. In the second quarter of 2014, Regeneron recognized $67 million from its share of net profit from EYLEA sales outside the United States, compared to $19 million in the second quarter of 2013 (each after repayment of $15 million in development expenses).

·    In July 2014, the FDA approved EYLEA for the treatment of diabetic macular edema (DME).

·    Applications for marketing approval in the European Union (EU) and Japan for EYLEA in DME have also been submitted. In June 2014, EYLEA was recommended for approval by the European Committee for Medicinal Products for Human Use (CHMP) for the treatment of DME. The decision of the European Commission is expected in the second half of 2014.

·    In July 2014, the Company reported that two-year results from the Phase 3 VIVID-DME trial of EYLEA for the treatment of DME demonstrated sustained improvement in vision. The 52-week results (primary analyses) from this study have been previously reported.

·    The target date for an FDA decision on the supplemental BLA for U.S. regulatory approval of EYLEA for the treatment of macular edema following branch retinal vein occlusion (BRVO) is October 23, 2014. In June 2014, Bayer HealthCare submitted an application to the European Medicines Agency (EMA) seeking marketing authorization in the EU for EYLEA for the treatment of macular edema following BRVO.

·    In the Phase 3 SIGHT trial of EYLEA in wet age-related macular degeneration (AMD) patients in China, EYLEA 2 milligrams (mg) dosed every two months achieved the primary endpoint of a significantly greater improvement in best-corrected visual acuity (BCVA) from baseline compared to photodynamic therapy (PDT) at 28 weeks (14 letters for EYLEA vs. 3.9 letters for PDT, p less than 0.0001). The safety results were consistent with results from prior studies in wet AMD.

Pipeline Progress

Regeneron has fourteen fully human monoclonal antibodies generated using the Company's VelocImmune^® technology in clinical development, including six in collaboration with Sanofi.  Highlights from the late-stage antibody pipeline include:

Alirocumab, the Company's antibody targeting PCSK9 (proprotein convertase subtilisin/kexin type 9) to lower LDL-cholesterol (LDL-C), is currently being evaluated in the global Phase 3 ODYSSEY program.  In July 2014, the Company and Sanofi reported positive, top-line results from nine Phase 3 ODYSSEY studies.  All nine studies (ODYSSEY LONG TERM, FH I, FH II, HIGH FH, COMBO I, COMBO II, OPTIONS I, OPTIONS II and ALTERNATIVE) met their primary efficacy endpoint of a greater percent reduction from baseline in LDL-C at week 24, compared to placebo or active comparator.  Alirocumab was generally well tolerated in the nine ODYSSEY trials.  The most common adverse events were nasopharyngitis and upper respiratory tract infections, which were generally balanced between treatment groups.  Injection site reactions occurred more often in the alirocumab group compared to placebo.  Serious adverse events and deaths were generally balanced between treatment groups as were other key adverse events including musculoskeletal, neurocognitive, and liver-related events.  Data from these nine studies, along with the previously announced positive data from the ODYSSEY MONO study, will form the basis for the Company's initial global regulatory filings.  The ODYSSEY program is expected to enroll more than 23,500 patients across 14 clinical trials of alirocumab both in combination with other lipid-lowering agents and as monotherapy.  All of the trials in the ODYSSEY program are studying every two-week dosing of alirocumab, except for CHOICE I and CHOICE II, which are studying every four-week dosing.  The Phase 3 ODYSSEY program remains ongoing.  This includes three additional studies, CHOICE I, CHOICE II and OUTCOMES, which are expected to report primary endpoints in 2015 and beyond.

In July 2014, the Company and Sanofi also announced that the companies intend to use an FDA rare pediatric disease priority review voucher in connection with the planned BLA submission for alirocumab.  The priority review voucher entitles the holder to designate a human drug application for priority review, which provides for an expedited 6-month review from the filing date instead of the standard 10-month review.

Sarilumab, the Company's antibody targeting IL-6R for rheumatoid arthritis, is currently continuing enrollment in the global Phase 3 SARIL-RA program.  In June 2014, data from the first positive Phase 3 trial in the SARIL-RA program, MOBILITY, were presented at the annual meeting of The European League Against Rheumatism (EULAR) in Paris, France.

Dupilumab, the Company's antibody that blocks signaling of IL-4 and IL-13 for allergic diseases, is currently in Phase 2b testing.  In July 2014, positive results from four Phase 1 and Phase 2 studies of dupilumab in adults with moderate-to-severe atopic dermatitis were published in the New England Journal of Medicine.  In addition, positive results from the Phase 2b trial of dupilumab in atopic dermatitis were reported in July 2014.  A Phase 2b trial of dupilumab in asthma and a Phase 2a trial in nasal polyposis are both fully enrolled.

Second Quarter 2014 Financial Results

Product Revenues: Net product sales were $418 million in the second quarter of 2014, compared to $334 million in the second quarter of 2013.  EYLEA net product sales in the United States were $415 million in the second quarter of 2014, compared to $330 million in the second quarter of 2013. 

Total Revenues: Total revenues increased by 45% to $666 million in the second quarter of 2014, compared to $458 million in the second quarter of 2013.  Total revenues include collaboration revenues of $240 million in the second quarter of 2014, compared to $117 million in the second quarter of 2013.  Collaboration revenues increased primarily due to an increase in the Company's net profit from commercialization of EYLEA outside the United States and higher reimbursement of antibody development costs by Sanofi.  Collaboration revenues in the second quarter of 2014 also included a $15 million sales milestone earned from Bayer HealthCare.  Collaboration revenues in the second quarter of 2013 were reduced by two $10 million upfront payments made to Sanofi to acquire full rights to antibodies to PDGF and antibodies to Ang2 in ophthalmology.

Refer to Table 4 for a summary of collaboration revenue.

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