Regeneron Pharmaceuticals Inc Q3 2024 Earnings Call Transcript

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

Question: Taylor Hanley - JPMorgan - Analyst : This is Taylor Hanley on for Chris Schott. We just had a question on EYLEA. So with Alnylam launching their biosimilar, how are you thinking about EYLEA going forward? And what levels can you pull to potentially accelerate conversion to high-dose EYLEA? And how are you thinking about pricing for the franchise more broadly? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 12:30PM, REGN.OQ - Q3 2024 Regeneron Pharmaceuticals Inc Earnings Call Leonard Schleifer - Regeneron Pharmaceuticals Inc - Co-Chairman of the Board, President, Chief Executive Officer, Founder So Mary may have some extra comments on that. But look, EYLEA is a fantastic product. We have delivered probably somewhere in the neighborhood of around $100 million or more injections with EYLEA. And so the performance and safety of the product, our transparency with safety issues that may arise over the past decade, I think, has given physicians and their patients, a lot of comfort with EYLEA, and you see some stickiness of that product. Nonetheless, we think that EYLEA HD is a differentiated product, and we are continuing to work on using the standard approaches of education and informing the doctors about the potential use in patients, providing them with more data, as George referred to, some of the long-term data is rather striking. We know that there is a biosimilar in the market for EYLEA, not for EYLEA HD, and we know it will be competitive, but we think we'll be able to compete well.

Question: Tyler Van Buren - TD Cowen - Analyst : Congrats on the quarterly results and all the progress. Can you reiterate your confidence in EYLEA HD quarter-over-quarter growth going into Q4 despite the negative impact due to wholesaler inventory? And are you seeing a tailwind with the overall franchise yet due to the removal of product from a major supplier of linvoseltamab?

Question: Brian Abrahams - RBC Capital Markets - Analyst : On the HD prefilled syringe, can you talk about the potential inflection in use that, that could catalyze next year, including how the differentiation of that prefilled string might resonate. And maybe also elaborate on some of the gating factors to development there, timeline sounds like they've been pushed out a little bit. Leonard Schleifer - Regeneron Pharmaceuticals Inc - Co-Chairman of the Board, President, Chief Executive Officer, Founder Yes. As I said, we anticipate bringing that to the market by the middle of next year. I believe already or almost immediately, EYLEA will be bringing the same device to the market with EYLEA HD outside of the United States. So we have a high degree of confidence. There are some additional requirements that you have to do inside the United States, which we're working through. And as I said, we think we'll have a differentiated product opportunity there. So you're right, Brian, it's possible that there could be an inflection when that comes to market because there is a preference for the prefilled syringe.

Question: Carter Gould - Barclays - Analyst : Maybe for Leonard and Chris, just now in the wake of Amgen potentially being on the market has driven any sort of change in conservative conceptually how you're thinking about the pace of R&D investments going forward or your capital allocation priorities, you're potentially leaning into buybacks or further rolling out or delaying a potential dividend? Any color on that front would be helpful. Leonard Schleifer - Regeneron Pharmaceuticals Inc - Co-Chairman of the Board, President, Chief Executive Officer, Founder Well, we're -- they say imitation is the best form of flattery. So we're glad to be flattered by Amgen that they're spending their time imitating our products. We're spending our money trying to bring new products to market which where we think is what this industry really is built for. It's really not built -- biosimilars are fine, but we think the industry is best built and Regeneron is best built to bring innovative products to market. As I mentioned, we have over 40 products in clinical development, many of which are in Phase III. As George detailed, there are a lot of exciting programs in there with lots of data readouts. We're not going to gate spending based upon a biosimilar entry, we're going to spend what's appropriate based upon the opportunities that we see. We have a strong balance sheet. We have good earnings. We have the capability to make significant investments. And George has built, I think, the most olipic research and development organization in the industry. So it would be full hardy not to invest in that, and you'll probably see some investments to go up. The big question in this game always is, will these investments pay off I think our past performance will not guarantee to anything in the future, the more than 10 or 12 products that George and gang have bought market there's a good harbinger of things to come. And as I said, with more than 40 things in development, we couldn't be more excited about our future product profiles.

Question: Terence Flynn - Morgan Stanley - Analyst : Great. I know you have some upcoming factor readouts here before the end of the year. Maybe you could just tell us what you're looking for to make the decision about whether to advance those into a Phase III program and how you're considering them versus each other and also versus the standard of care.

Question: Chris Raymond - Piper Sandler - Analyst : Maybe just a follow-up on the last and supply issue with Pine and potentially others exiting the market. Maybe just stepping back, compounded Avastin has seen supply and quality issues before. Do you see this episode as different from prior disruptions? We had a KOL tell us that he believes this marks sort of the beginning of the end for Avastin. I'd love to hear your thoughts on that. And maybe as a follow-up, if Avastin is likely to play less of a role here, does this not provide more of an opening for a biosimilar option?

Question: Salveen Richter - Goldman Sachs - Analyst : Can you just elaborate on the drivers for the pricing pressure noted for EYLEA HD and whether these pressures are going to be ongoing on the Ford? And just in that context, maybe just kind of your outlook for overall growth of the branded anti-VEGF market in the context of the biosimilars.

Question: Mohit Bansal - Wells Fargo - Analyst : I just want to understand how high does EYLEA uptake so far is tracking versus your own internal expectations, given that, I mean, it seems like about 25% conversion has happened yet at point. And at the same time, compared to -- this has been growing really rapidly. So just trying to understand what are the dynamics that we need to look at here and if there are any levers you can pull going forward to help increase uptake? Leonard Schleifer - Regeneron Pharmaceuticals Inc - Co-Chairman of the Board, President, Chief Executive Officer, Founder So let's answer the question. Obviously, we don't give specific guidance on conversion or the size of the market, but we do talk about what we think the catalyst can be -- and I do feel that we have a bunch of catalysts next year, the potential approval and data for RVO, more importantly, perhaps the prefilled syringe by mid-year. So I think that next year, we could see a little bit of an acceleration. Obviously, we're working very hard. It's a great product. But there are -- these things don't happen overnight because people do love EYLEA. And it is more sticky than one might have anticipated but I think the progress is solid and we expect it to keep going.

Question: Evan Seigerman - BMO Capital Markets - Analyst : Sorry about the earlier mishap. Just a follow-up on it. I know, George, you've spoken a lot about the really need for quality of weight loss, and I think that's very important. Maybe talk to the regulatory environment for muscle or preservation or muscle building assets. I know FDA has been kind of hesitant there. And they're really focused on weight loss, but maybe how you talk about how those will evolve in the coming years. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 12:30PM, REGN.OQ - Q3 2024 Regeneron Pharmaceuticals Inc Earnings Call

Question: David Risinger - Leerink Partners - Analyst : So I have -- I'll just keep it to one question, please. regarding next-gen product development. So clearly, Regeneron was extremely successful in creating EYLEA HD. Could you talk about your efforts to develop a next-gen Dupixent, including whether it would be a less frequently administered product? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 12:30PM, REGN.OQ - Q3 2024 Regeneron Pharmaceuticals Inc Earnings Call

Question: William Pickering - Bernstein - Analyst : Do you think that the rate of biosimilar erosion for Lucentis is a good proxy for what we can expect for EYLEA. I think they saw about 25% of volume switch over in the first 12 months. And are there any important differences in the commercial dynamics to keep in mind?

Question: Cory Kasimov - Evercore ISI - Analyst : I wanted to follow up on Carter's question earlier about capital allocation priorities. I'm sure you're pretty frustrated by the market reaction to recent developments around EYLEA. I know you have nearly $3 billion left in your authorized share repo. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 12:30PM, REGN.OQ - Q3 2024 Regeneron Pharmaceuticals Inc Earnings Call But have you given any thoughts to an ASR? And what are your evolving views around a dividend given that you already have over $15 billion in net cash on hand? And obviously have another significant inflection in additional cash generation not too far down the road. Leonard Schleifer - Regeneron Pharmaceuticals Inc - Co-Chairman of the Board, President, Chief Executive Officer, Founder So we have lots of discussions on this. We don't really have anything more to add than we've said publicly, which is perhaps the best opportune time to think about the dividend is when we have paid off the development balance to Sanofi, which we anticipate should be somewhere around the end of 2026. But beyond that, how we repurchase stock, when weather, et cetera, et cetera, is something that we really don't discuss until it's happening.