Regeneron Pharmaceuticals Inc Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Tyler Van Buren - TD Cowen - Analyst : Regarding the EYLEA HD CRL for the prefilled syringe, can you elaborate further on the question posed by the FDA? And perhaps more importantly, compare the situation to the original EYLEA HD CRL as that speed to resolution was very quick, about 2.5 months if I'm not mistaken, which would still be ahead of the RVO in every four week dosing PDUFA in August. Leonard Schleifer - Regeneron Pharmaceuticals Inc - Co-Chairman of the Board, President, Chief Executive Officer, Founder Right. It's Len speaking. I think you have to understand a little bit of detail on the processes and what happens. And that when you're reviewing -- when the FDA is reviewing your submission for an approval of a new device, we don't necessarily make all the components and in this case, we don't make all the components. You might be buying a stopper from somebody, some glass from somebody else, a needle from somebody else, and so forth. And we have the design and then we have an assembly. When the FDA has questions about one of the components, it's -- that's what it's referred to as a drug master file. They go to the holder of that drug master file. Let's say it's somebody who makes one of the components. The FDA has a question, well, how do you guys do this? And then the holder of the master file responds to the FDA. By rule, we are not partied to that up and back between the FDA and the third party component supplier. The reason we're not partied is because most of the time, these questions relate to general practices where in which the supplier is not only supplying Regeneron, they might be supplying 20 other pharmaceutical companies, which is in fact the case in some of these DMFs we're dealing with here. So that's the general tone of things. The questions get asked. In this particular case, based on our phone calls, after we received the CRL last Wednesday, we realized that nobody had gotten these questions until the day of the CRL or the day before or literally after the CRL. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 29, 2025 / 12:30PM, REGN.OQ - Q1 2025 Regeneron Pharmaceuticals Inc Earnings Call In any case, based on our conversation with the FDA, we believe that there's one key issue that is left to resolve. There are a few other minor ones which I think were just clarifications, but the one key issue relates to a supplier. And the supplier has told us that the FDA asked for some data. They have all the data. They expeditiously supplied it. Now of course, we don't know the data because we can't be involved by rule in that process. We take it, that word that they think that they have satisfied the agency. Of course, the FDA has to review this. They could be up and back. You said this. Well, we really wanted that. Maybe you have more of this, and so forth. So that leads to a little bit of uncertainty on how fast this could all get resolved. We do have commitments from the FDA that they will move expeditiously as well. That doesn't mean they'll approve it. But they will review quickly the data that's submitted and have an up and back because they recognize, I think, the importance in advance of the prefilled syringe being a better way of administering the product than that of a vial for patients getting intravitreal injections. So boil all that down, how long can this take? It could go quickly, as you said. The last time this happened, it took a few months. It could go longer. We don't think there's a reinspection involved. It's not an issue related to that. So we don't think there will be these internal long timelines for that. But we'll know more in the coming weeks or months. And we will hopefully get it across the finish line in a short while. But we'll try and keep you posted once we know what the FDA is really up to. I'm sorry that that's a little indefinite, Tyler, but that's the nature of the process.

Question: Alexandria Hammond - Wolfe Research - Analyst : I want to pivot a little bit, and I'm curious on the pipeline. So on your factor XI antibodies, how you prioritize which indications to go after? And how should we think about the timing of launches? Can you provide any follow up to on your discussions with regulatory authorities on aligning trial design?

Question: Christopher Schott - JPMorgan - Analyst : I just had one on EYLEA and the foundation funding. I appreciate the color on the call, but just any updated thoughts on when we could think about the foundation reopening and how quickly once it's reopened, we could think about some of these volumes moving from the generic Avastin back to branded agents? Leonard Schleifer - Regeneron Pharmaceuticals Inc - Co-Chairman of the Board, President, Chief Executive Officer, Founder Chris, thanks for the question. Just for the benefit of everybody, let me just remind everybody how all this works. When you're under commercial insurance and you're younger than 65, if you have a copay in your insurance program, sponsors that people like Regeneron can directly to a patient supply copay assistance in the form of a coupon, et cetera, et cetera. When a patient turns 65 and if they go on Medicare, which most of our patients getting intravitreal injections are, those patients that are responsible for a copay, typically around 20% if they're in plain old Medicare, it varies somewhat if they're in Medicare Advantage. Some people -- many people have insurance, supplemental gap insurance, AARP, whatever you want to call it, which covers these copays. But there are still others who don't have the insurance and can't afford the copay associated with an injection of an anti-VEGF agent, for example. The government has indicated that companies can be part of this safety net, if you will, to help patients who need financial assistance. And the way this works is that companies and others can support independent charitable foundations who then assist patients with retinal disease regardless of the drug they need. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 29, 2025 / 12:30PM, REGN.OQ - Q1 2025 Regeneron Pharmaceuticals Inc Earnings Call The foundations take in financially eligible patients and give out the assistance that they can afford to give out on a first come, first serve basis. And so there is no direct relationship. If we give money to a foundation, it could go to support VABYSMO. It could go to support PAVBLU. It could go to support EYLEA. It could go to support -- in fact, in these funds, as they're constructed today, it could go to support the drugs for geographic atrophy. There's no connection as there shouldn't be in what we give and then what the -- how the foundations dole out the resources. We would like to help as many patients as we can. It turns out we -- was the if not the sole, the vast supporter of these foundations in the recent history. We're talking about having given large sums of money in the neighborhood of over $400 million last year to do this charitable work. As our commercial outlook in the field has changed, as our resources have changed, we looked at this and said, we'd like to continue doing this, but we can't do it all ourselves. We'd like to help as many people as possible. And so we're trying to come up with a way where others and Regeneron could make sure that people in need get the drug, copay support without regard to what drug they actually choose or their doctors choose. And one of the things that we've come up with is sort of a standard thing that's done that we all have seen this in our charitable philanthropic efforts, we're considering a matching program where Regeneron would put up and say we'll put up X dollars to some amount and that people depending upon other people putting up, we would match their contributions. We would hope that this might stimulate others to be more philanthropic than they've been. We are working through the mechanics of this with the foundation. When this all can get launched, we hope in the not too distant future. Whether or not others will step up to the plate, I'm not sure, but we certainly hope because patients do need this. I hope that that answers your question. And since this is such an important issue, because if I haven't answered it, we'll give you another question to drill down on this a little further.

Question: Terence Flynn - Morgan Stanley - Analyst : Just wanted to ask an additional one on the prefilled syringe. Len, thanks for all the details. But can you confirm that this component is something that's used in your prefilled syringe that's already approved in Europe, or is this a different component or is the component used in any other prefilled syringes? Just trying to understand the novelty here and why this might be a hang up. Leonard Schleifer - Regeneron Pharmaceuticals Inc - Co-Chairman of the Board, President, Chief Executive Officer, Founder Yes, this is the same device, same design, and the same components that was approved in Europe last year and has been safely used for months. So we don't think there's any issue whatsoever with the approvability of this. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 29, 2025 / 12:30PM, REGN.OQ - Q1 2025 Regeneron Pharmaceuticals Inc Earnings Call But the FDA has their own set of questions. They want to know did you do this or where's the data for that and that sort of thing. And they don't just automatically approve it just because Europe has approved it. But yes, your question is a good one, Terence. It gives us all some confidence that these issues should be resolvable because they were resolved for European approval.

Question: Akash Tawari - Jeffries - Analyst : So you mentioned $400 million in patient assistance to Good Days. Can you comment on what percent of your US patient base receives funding in 2024? Is 25% a fair estimate? And just to kind of drill into the specifics, from what you've seen in Q1, what percentage of those patients are dual covered or have supplemental insurance so they would be able to get back onto EYLEA without help from Good Days? And then Len, assuming that other -- Roche and some of these other players don't -- aren't receptive to this matching program, what are you -- what is your team going to do, right? Is there a situation where funding to Good Days doesn't return at any point in 2025? Leonard Schleifer - Regeneron Pharmaceuticals Inc - Co-Chairman of the Board, President, Chief Executive Officer, Founder A lot of questions embedded in there, but the first series of questions, we can't answer. We don't do any correlations about our contributions and the implications for EYLEA usage. That's not permitted. It's not appropriate and the people who make the decisions at Regeneron on are not the commercial people. This is not a conduit of any shape, matter or form, and that's not permissible under the rules. So we don't -- we can't answer any of those questions about EYLEA . In terms of what our game plan is, well, I think you've heard it. We want to stimulate a community of givers. You mentioned one. It doesn't have to be. It could be somebody else. If Elon Musk wants to give, that's good by us too. We're not targeting anybody in particular. We're just saying that we would like to stimulate others, and I should just leave it at that.

Question: Carter Gould - Cantor Fitzgerald - Analyst : Sorry to come back to the regulatory operations, and I appreciate all the color and nuance on the prefilled syringe. But Len, this is your fourth CRL and as well as a delay in the past sort of 12 months. Is there acknowledgement this performance is unsatisfactory across the regulatory group? And maybe you could highlight any steps you've taken to improve regulatory performance? I recognize their idiosyncrasies. And if I'm being a fair, please correct me, but the rate of CRLs and delays really stands out versus peers. Leonard Schleifer - Regeneron Pharmaceuticals Inc - Co-Chairman of the Board, President, Chief Executive Officer, Founder Well, that's a tough one. Well, if anybody's going to take responsibility, it's going to be me. I'm not putting this on a regulatory group whatsoever because I think they've done a spectacular job as a manufacturing group. We have a lot of activity at the FDA. I can't remember what we said, nine submissions and we -- so we're going to have more than our share of regulatory interactions. I think our team is first-rate. The kinds of issues that have come up are reflecting, in my view, an increased scrutiny by the FDA post-COVID on contract manufacturers performing a variety of functions. All of our CRLs, -- I should say not all, but for the vast majority of our CRLs, they relate to these issues at third party suppliers which the FDA recognized were woefully behind the times during COVID. There wasn't enough of them. They were flunking inspections. And so I think the FDA is trying to step up the game if you will of these contract manufacturers. And since we're so active, we see more. I don't think it's a -- I'll acknowledge for sure that we're unhappy about this. And if there's a blame, I'm happy to take it personally. But it's certainly not the reflection on a regulatory group and/or manufacturing people who are working really hard to get this right. Now in some cases, the rules have changed sort of midgame. We had a CRL where we hadn't quite enrolled enough people. And why did the FDA change that sort of approach was because other manufacturers weren't bothering to enroll anybody over a 10 year period. And so they've said, we're not going to do these accelerated approvals. So we got caught up in that. But we've rectified that. And we're expecting that approval to come. There was another CRL related to a manufacturing thing with -- originally with EYLEA, out of our control. We got that. I don't want this to sound like excuses. We own the issues because it's our product, but it is reflective, I think, more of what is going on at the level of the contract manufacturers.

Question: William Pickering - Bernstein - Analyst : On the EYLEA HD monthly dosing submission, the [LRR] safety trial just completed enrolling in March, and I believe that you submitted the filing before that. So what percent of the total enrollment was included in the submission? Did you have alignment with the FDA? This would be sufficient? And what's your overall level of confidence in this submission at this point? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 29, 2025 / 12:30PM, REGN.OQ - Q1 2025 Regeneron Pharmaceuticals Inc Earnings Call Leonard Schleifer - Regeneron Pharmaceuticals Inc - Co-Chairman of the Board, President, Chief Executive Officer, Founder I don't think we're going to get into the details of all of that. Suffice to say that they've accepted our submission and therefore, there's no deficiency, say like we didn't have enough numbers or something like that. Now it's a review issue. And we'll see how that process goes. And we'll let you know when we know something. But in terms of whether or not we've satisfied the requirement for evaluation, we did pass that hurdle because it was accepted for review.

Question: Evan Seigerman - BMO Capital Markets - Analyst : I want to pose one for you, Len. Hypothetically speaking, if you could redesign a way to provide patient assistance without the use of charities and current legislation aside, how would you structure that program for Medicare? Would it be direct kind of co-payments for patients who need it or other kind of mechanisms? How do you think about that? Leonard Schleifer - Regeneron Pharmaceuticals Inc - Co-Chairman of the Board, President, Chief Executive Officer, Founder Yeah. That is a great question, and I addressed that, I think, recently on a CNBC interview that I gave. But let me revisit it. Just to level set everybody, remember the point being is that we cannot do direct patient assistance to people who are having their drugs paid for by government funding. I suggested with the stroke of a Presidential pen that they could choose to allow sponsors to provide copay assistance directly the way we do for commercial patients. The notion that somebody is going to take an expensive drug that requires treatment for cancer, let's say, or an injection in the eye or something like that because they get copay assistance seems to me ill-founded. And maybe it might increase utilization perhaps. But far more importantly, it means patients will get the best drug that they and their doctors choose for them. There is lots of evidence. And we just had it this quarter that we -- most retinal specialists will tell you that Avastin is not the best drug to treat patients with a variety of retinal diseases, yet people who are poor, who can't afford copays wind up getting that in a disproportionate number as you saw when there was no copay assistance here. And that's really the wrong that needs to be righted. And were I designing this, I would allow copay assistance by directly from sponsors to patients. I think one could literally do this. If the President wanted to do this, he would get millions and millions of seniors would be greatly appreciative that they weren't fussing and worrying and figuring out, well, am I getting the best treatment that's going to make me not lose my vision or am I getting the right cancer treatment so that I can live to see the next year and so forth. I think that that would be a great thing for the President to do.

Question: Salveen Richter - Goldman Sachs - Analyst : You tightened your capital expenditure guidance for this year. Can you help us understand this in the context of your recent manufacturing announcements and cadence here for forward spend noting the current environment? Leonard Schleifer - Regeneron Pharmaceuticals Inc - Co-Chairman of the Board, President, Chief Executive Officer, Founder Yeah. Thanks, Salveen for the question. We lowered the top end of the range by $25 million. There's nothing really to look through that other than just some timing of the way we see the expenditures going out. But we're committed to our capital plans and nothing has changed accordingly.

Question: David Risinger - Leerink Partners - Analyst : Well, I'm hoping you can address a big picture question. The industry is facing three major US government risks, specifically actions that are harming biopharma innovation, including FDA disruption, questioning of proven medical science, evisceration of the NIH, in addition, tariff threats, and then finally, the Trump administration's agenda to take down drug prices more than the Biden administration. So considering what appears to be a lack of appreciation in Washington of the benefits that the biopharmaceutical industry brings to Americans, could you please comment on how you and your executive team and Board are engaging differently today with Washington leadership to change the political agenda for the better? Leonard Schleifer - Regeneron Pharmaceuticals Inc - Co-Chairman of the Board, President, Chief Executive Officer, Founder Great question, David. Look, I think during this transition period, there is a lot of disruption in Washington. There is loss of personnel, reduction in force, new people in charge, new focuses, and so forth. I told the President that I thought that RFK Jr., while he thinks outside the box, needed some assistance on the science front. I said that straight out and offered to provide that. And I think that there are others who feel similarly as I do that we can't lose the ability to do science. Does that mean that the way science has been done in this country, the way grants have been given out, is done exactly right? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 29, 2025 / 12:30PM, REGN.OQ - Q1 2025 Regeneron Pharmaceuticals Inc Earnings Call No, there is room for improvement across all of what we do. We saw that during COVID when one of our antibodies didn't get the kind of indication it clearly should have based on the science. Why that happened? Somebody wasn't following the science. So there's room for improvement. But of course, there's risk, David, as you pointed out. If we take a path where we just stop following science and we give up on tried and true methodologies, I think we could be in trouble. If we take a fresh look at things but still get guided by scientific principles, I think things could improve. Obviously, experience does matter, and I really hope that we do not lose really good people at the FDA in the rank and file or even at the policy level. I think that would be deleterious. So I think that we don't get to set the policy. We hopefully get to influence a little bit and we try and work through it. But the company spends a fair amount of effort trying to keep people on a path that will serve the health of our citizens as best it can.