FORM 10-Q
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(Mark One)
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(X)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended
March 31, 2015
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OR
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( )
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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For the transition period from __________ to __________
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Commission File Number
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0-19034
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New York
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13-3444607
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(State or other jurisdiction of
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(I.R.S. Employer Identification No.)
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incorporation or organization)
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777 Old Saw Mill River Road, Tarrytown, New York
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10591-6707
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(Address of principal executive offices)
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(Zip Code)
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Yes
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X
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No
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Yes
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X
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No
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Large accelerated filer
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X
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
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Yes
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No
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X
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Class of Common Stock
|
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Number of Shares
|
Class A Stock, $.001 par value
|
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1,971,868
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Common Stock, $.001 par value
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101,305,623
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Page Numbers
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"ARCALYST
®
", "EYLEA
®
", "ZALTRAP
®
", "
VelocImmune
®
", "
VelociGene
®
", "
VelociMouse
®
", "
VelociMab
®
", and "
VelociSuite
®
" are trademarks of Regeneron Pharmaceuticals, Inc. Trademarks and trade names of other companies appearing in this report are, to the knowledge of Regeneron Pharmaceuticals, Inc., the property of their respective owners.
|
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March 31,
|
|
December 31,
|
||||
|
2015
|
|
2014
|
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
507,907
|
|
|
$
|
648,719
|
|
Marketable securities
|
234,257
|
|
|
251,761
|
|
||
Accounts receivable - trade, net
|
1,015,962
|
|
|
739,379
|
|
||
Accounts receivable from Sanofi
|
159,444
|
|
|
121,058
|
|
||
Accounts receivable from Bayer HealthCare
|
163,056
|
|
|
156,962
|
|
||
Inventories
|
133,863
|
|
|
128,861
|
|
||
Deferred tax assets
|
62,126
|
|
|
49,235
|
|
||
Prepaid expenses and other current assets
|
34,099
|
|
|
71,486
|
|
||
Total current assets
|
2,310,714
|
|
|
2,167,461
|
|
||
|
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|
||||
Marketable securities
|
483,305
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|
|
460,154
|
|
||
Property, plant, and equipment, at cost, net of accumulated depreciation and amortization
|
1,110,597
|
|
|
974,309
|
|
||
Deferred tax assets
|
289,484
|
|
|
289,021
|
|
||
Other assets
|
4,473
|
|
|
3,034
|
|
||
Total assets
|
$
|
4,198,573
|
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|
$
|
3,893,979
|
|
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|
||||
LIABILITIES and STOCKHOLDERS' EQUITY
|
|||||||
Current liabilities:
|
|
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|
||||
Accounts payable and accrued expenses
|
$
|
462,762
|
|
|
$
|
483,489
|
|
Deferred revenue from Sanofi, current portion
|
19,342
|
|
|
15,927
|
|
||
Deferred revenue - other, current portion
|
51,845
|
|
|
58,098
|
|
||
Other current liabilities
|
2,185
|
|
|
97,146
|
|
||
Total current liabilities
|
536,134
|
|
|
654,660
|
|
||
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|
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|
||||
Deferred revenue from Sanofi
|
48,656
|
|
|
72,367
|
|
||
Deferred revenue - other
|
114,318
|
|
|
103,909
|
|
||
Facility lease obligations
|
328,394
|
|
|
310,938
|
|
||
Convertible senior notes
|
144,082
|
|
|
146,773
|
|
||
Other long-term liabilities
|
55,559
|
|
|
40,855
|
|
||
Total liabilities
|
1,227,143
|
|
|
1,329,502
|
|
||
|
|
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|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, $.01 par value; 30,000,000 shares authorized; issued and outstanding - none
|
—
|
|
|
—
|
|
||
Class A Stock, convertible, $.001 par value; 40,000,000 shares authorized; shares issued and outstanding - 1,971,868 in 2015 and 1,973,368 in 2014
|
2
|
|
|
2
|
|
||
Common Stock, $.001 par value; 160,000,000 shares authorized; shares issued - 103,418,736 in 2015 and 102,475,154 in 2014
|
103
|
|
|
102
|
|
||
Additional paid-in capital
|
2,812,573
|
|
|
2,465,008
|
|
||
Retained earnings
|
292,665
|
|
|
216,644
|
|
||
Accumulated other comprehensive income
|
47,904
|
|
|
52,251
|
|
||
Treasury stock, at cost; 2,163,980 shares in 2015 and 2,017,732 in 2014
|
(181,817
|
)
|
|
(169,530
|
)
|
||
Total stockholders' equity
|
2,971,430
|
|
|
2,564,477
|
|
||
Total liabilities and stockholders' equity
|
$
|
4,198,573
|
|
|
$
|
3,893,979
|
|
|
|
|
|
||||
The accompanying notes are an integral part of the financial statements.
|
|
|
Three Months Ended
March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Statements of Operations
|
|
|
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|
||||
Revenues:
|
|
|
|
|
||||
Net product sales
|
|
$
|
544,573
|
|
|
$
|
362,378
|
|
Sanofi collaboration revenue
|
|
173,356
|
|
|
130,508
|
|
||
Bayer HealthCare collaboration revenue
|
|
123,846
|
|
|
125,312
|
|
||
Technology licensing and other revenue
|
|
27,837
|
|
|
7,542
|
|
||
|
|
869,612
|
|
|
625,740
|
|
||
|
|
|
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|
||||
Expenses:
|
|
|
|
|
||||
Research and development
|
|
343,113
|
|
|
287,379
|
|
||
Selling, general, and administrative
|
|
158,991
|
|
|
103,227
|
|
||
Cost of goods sold
|
|
42,570
|
|
|
27,473
|
|
||
Cost of collaboration and contract manufacturing
|
|
41,385
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|
|
16,099
|
|
||
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|
586,059
|
|
|
434,178
|
|
||
|
|
|
|
|
||||
Income from operations
|
|
283,553
|
|
|
191,562
|
|
||
|
|
|
|
|
||||
Other income (expense):
|
|
|
|
|
||||
Investment and other income
|
|
81
|
|
|
937
|
|
||
Interest expense
|
|
(6,169
|
)
|
|
(11,613
|
)
|
||
Loss on extinguishment of debt
|
|
(942
|
)
|
|
—
|
|
||
|
|
(7,030
|
)
|
|
(10,676
|
)
|
||
|
|
|
|
|
||||
Income before income taxes
|
|
276,523
|
|
|
180,886
|
|
||
|
|
|
|
|
||||
Income tax expense
|
|
(200,502
|
)
|
|
(112,581
|
)
|
||
|
|
|
|
|
||||
Net income
|
|
$
|
76,021
|
|
|
$
|
68,305
|
|
|
|
|
|
|
||||
Net income per share - basic
|
|
$
|
0.74
|
|
|
$
|
0.69
|
|
Net income per share - diluted
|
|
$
|
0.66
|
|
|
$
|
0.61
|
|
|
|
|
|
|
||||
Weighted average shares outstanding - basic
|
|
102,227
|
|
|
98,709
|
|
||
Weighted average shares outstanding - diluted
|
|
114,519
|
|
|
112,151
|
|
||
|
|
|
|
|
||||
Statements of Comprehensive Income
|
|
|
|
|
||||
Net income
|
|
$
|
76,021
|
|
|
$
|
68,305
|
|
Other comprehensive (loss) income:
|
|
|
|
|
||||
Unrealized (loss) gain on marketable securities, net of tax
|
|
(4,347
|
)
|
|
2,653
|
|
||
Comprehensive income
|
|
$
|
71,674
|
|
|
$
|
70,958
|
|
|
|
|
|
|
||||
The accompanying notes are an integral part of the financial statements.
|
|
|
Three Months Ended
March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
76,021
|
|
|
$
|
68,305
|
|
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
16,027
|
|
|
11,530
|
|
||
Non-cash compensation expense
|
|
103,759
|
|
|
75,785
|
|
||
Non-cash interest expense
|
|
2,358
|
|
|
5,916
|
|
||
Loss on extinguishment of debt
|
|
942
|
|
|
—
|
|
||
Other non-cash charges and expenses, net
|
|
6,006
|
|
|
3,761
|
|
||
Deferred taxes
|
|
(10,888
|
)
|
|
(5,761
|
)
|
||
Changes in assets and liabilities:
|
|
|
|
|
||||
Increase in Sanofi, Bayer HealthCare, and trade accounts receivable
|
|
(321,063
|
)
|
|
(92,529
|
)
|
||
Increase in inventories
|
|
(5,932
|
)
|
|
(15,550
|
)
|
||
Decrease (increase) in prepaid expenses and other assets
|
|
35,874
|
|
|
(20,898
|
)
|
||
(Decrease) increase in deferred revenue
|
|
(16,140
|
)
|
|
37,107
|
|
||
Increase (decrease) in accounts payable, accrued expenses, and other liabilities
|
|
25,534
|
|
|
(14,139
|
)
|
||
Total adjustments
|
|
(163,523
|
)
|
|
(14,778
|
)
|
||
Net cash (used in) provided by operating activities
|
|
(87,502
|
)
|
|
53,527
|
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
||||
Purchases of marketable securities
|
|
(95,775
|
)
|
|
(253,878
|
)
|
||
Sales or maturities of marketable securities
|
|
80,456
|
|
|
82,469
|
|
||
Capital expenditures
|
|
(114,162
|
)
|
|
(64,822
|
)
|
||
Net cash used in investing activities
|
|
(129,481
|
)
|
|
(236,231
|
)
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
||||
Proceeds (payments) in connection with facility and capital lease obligations
|
|
6,738
|
|
|
(262
|
)
|
||
Repayments of convertible senior notes
|
|
(16,686
|
)
|
|
—
|
|
||
Payments in connection with reduction of outstanding warrants
|
|
(124,531
|
)
|
|
—
|
|
||
Proceeds from issuance of Common Stock
|
|
76,273
|
|
|
55,042
|
|
||
Payments in connection with Common Stock tendered for employee tax obligations
|
|
(21,192
|
)
|
|
(63,086
|
)
|
||
Excess tax benefit from stock-based compensation
|
|
155,569
|
|
|
117,260
|
|
||
Net cash provided by financing activities
|
|
76,171
|
|
|
108,954
|
|
||
|
|
|
|
|
||||
Net decrease in cash and cash equivalents
|
|
(140,812
|
)
|
|
(73,750
|
)
|
||
|
|
|
|
|
||||
Cash and cash equivalents at beginning of period
|
|
648,719
|
|
|
535,608
|
|
||
|
|
|
|
|
||||
Cash and cash equivalents at end of period
|
|
$
|
507,907
|
|
|
$
|
461,858
|
|
|
|
|
|
|
||||
The accompanying notes are an integral part of the financial statements.
|
|
Rebates &
Chargebacks
|
|
Distribution-
Related
Fees
|
|
Other Sales-
Related
Deductions
|
|
Total
|
||||||||
Balance as of December 31, 2014
|
$
|
3,083
|
|
|
$
|
21,166
|
|
|
$
|
532
|
|
|
$
|
24,781
|
|
Provision related to current period sales
|
11,353
|
|
|
24,781
|
|
|
1,383
|
|
|
37,517
|
|
||||
Credits/payments
|
(9,779
|
)
|
|
(13,036
|
)
|
|
(1,411
|
)
|
|
(24,226
|
)
|
||||
Balance as of March 31, 2015
|
$
|
4,657
|
|
|
$
|
32,911
|
|
|
$
|
504
|
|
|
$
|
38,072
|
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2013
|
$
|
4,400
|
|
|
$
|
19,663
|
|
|
$
|
538
|
|
|
$
|
24,601
|
|
Provision related to current period sales
|
6,886
|
|
|
16,858
|
|
|
448
|
|
|
24,192
|
|
||||
Credits/payments
|
(6,664
|
)
|
|
(16,310
|
)
|
|
(454
|
)
|
|
(23,428
|
)
|
||||
Balance as of March 31, 2014
|
$
|
4,622
|
|
|
$
|
20,211
|
|
|
$
|
532
|
|
|
$
|
25,365
|
|
|
|
Three Months Ended
March 31,
|
||||||
Sanofi Collaboration Revenue
|
|
2015
|
|
2014
|
||||
ZALTRAP:
|
|
|
|
|
||||
Regeneron's share of losses in connection with commercialization of ZALTRAP
|
|
—
|
|
|
$
|
(3,212
|
)
|
|
Reimbursement of Regeneron research and development expenses
|
|
$
|
686
|
|
|
1,092
|
|
|
Other
|
|
15,236
|
|
|
2,177
|
|
||
Total ZALTRAP
|
|
15,922
|
|
|
57
|
|
||
Antibody:
|
|
|
|
|
||||
Reimbursement of Regeneron research and development expenses
|
|
168,820
|
|
|
126,822
|
|
||
Reimbursement of Regeneron commercialization-related expenses
|
|
8,458
|
|
|
—
|
|
||
Regeneron's share of losses in connection with commercialization of antibodies
|
|
(22,405
|
)
|
|
—
|
|
||
Other
|
|
2,561
|
|
|
3,629
|
|
||
Total Antibody
|
|
157,434
|
|
|
130,451
|
|
||
|
|
$
|
173,356
|
|
|
$
|
130,508
|
|
|
|
Three Months Ended
March 31,
|
||||||
Bayer HealthCare Collaboration Revenue
|
|
2015
|
|
2014
|
||||
EYLEA:
|
|
|
|
|
||||
Regeneron's net profit in connection with commercialization of EYLEA outside the United States
|
|
$
|
89,426
|
|
|
$
|
61,159
|
|
Sales milestones
|
|
15,000
|
|
|
30,000
|
|
||
Cost-sharing of Regeneron EYLEA development expenses
|
|
2,657
|
|
|
20,347
|
|
||
Other
|
|
12,912
|
|
|
10,932
|
|
||
Total EYLEA
|
|
119,995
|
|
|
122,438
|
|
||
PDGFR-beta antibody:
|
|
|
|
|
||||
Cost-sharing of REGN2176-3 development expenses
|
|
1,254
|
|
|
513
|
|
||
Other
|
|
2,597
|
|
|
2,361
|
|
||
Total PDGFR-beta
|
|
3,851
|
|
|
2,874
|
|
||
Total Bayer HealthCare collaboration revenue
|
|
$
|
123,846
|
|
|
$
|
125,312
|
|
|
December 31, 2014
|
||||||||||
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
||||||
Balance Sheet Data:
|
|
|
|
|
|
||||||
Deferred tax assets (noncurrent)
|
$
|
266,869
|
|
|
$
|
22,152
|
|
|
$
|
289,021
|
|
Total assets
|
3,871,827
|
|
|
22,152
|
|
|
3,893,979
|
|
|||
Additional paid-in capital
|
2,404,118
|
|
|
60,890
|
|
|
2,465,008
|
|
|||
Retained earnings
|
255,382
|
|
|
(38,738
|
)
|
|
216,644
|
|
|||
Total stockholders' equity
|
2,542,325
|
|
|
22,152
|
|
|
2,564,477
|
|
|||
Total liabilities and stockholders' equity
|
3,871,827
|
|
|
22,152
|
|
|
3,893,979
|
|
|||
|
|
|
|
|
|
||||||
|
Three Months Ended March 31, 2014
|
||||||||||
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
||||||
Consolidated Statement of Operations Data:
|
|
|
|
|
|
||||||
Selling, general, and administrative
|
$
|
108,850
|
|
|
$
|
(5,623
|
)
|
|
$
|
103,227
|
|
Total operating expenses
|
439,801
|
|
|
(5,623
|
)
|
|
434,178
|
|
|||
Income from operations
|
185,939
|
|
|
5,623
|
|
|
191,562
|
|
|||
Income before income taxes
|
175,263
|
|
|
5,623
|
|
|
180,886
|
|
|||
Income tax expense
|
109,820
|
|
|
2,761
|
|
|
112,581
|
|
|||
Net income
|
65,443
|
|
|
2,862
|
|
|
68,305
|
|
|||
Net income per share - basic
|
$
|
0.66
|
|
|
$
|
0.03
|
|
|
$
|
0.69
|
|
Net income per share - diluted
|
$
|
0.58
|
|
|
$
|
0.03
|
|
|
$
|
0.61
|
|
|
|
|
|
|
|
||||||
Consolidated Statement of Cash Flows Data:
|
|
|
|
|
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
65,443
|
|
|
$
|
2,862
|
|
|
$
|
68,305
|
|
Non-cash compensation expense
|
81,408
|
|
|
(5,623
|
)
|
|
75,785
|
|
|||
Deferred taxes
|
(8,522
|
)
|
|
2,761
|
|
|
(5,761
|
)
|
|
Three Months Ended
June 30, 2014
|
|
Six Months Ended
June 30, 2014
|
||||||||||||||||||||
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
||||||||||||
Selling, general, and administrative
|
$
|
102,414
|
|
|
$
|
(5,684
|
)
|
|
$
|
96,730
|
|
|
$
|
211,264
|
|
|
$
|
(11,307
|
)
|
|
$
|
199,957
|
|
Total operating expenses
|
443,294
|
|
|
(5,684
|
)
|
|
437,610
|
|
|
883,095
|
|
|
(11,307
|
)
|
|
871,788
|
|
||||||
Income from operations
|
222,406
|
|
|
5,684
|
|
|
228,090
|
|
|
408,345
|
|
|
11,307
|
|
|
419,652
|
|
||||||
Income before income taxes
|
203,119
|
|
|
5,684
|
|
|
208,803
|
|
|
378,382
|
|
|
11,307
|
|
|
389,689
|
|
||||||
Income tax expense
|
110,384
|
|
|
2,068
|
|
|
112,452
|
|
|
220,204
|
|
|
4,829
|
|
|
225,033
|
|
||||||
Net income
|
92,735
|
|
|
3,616
|
|
|
96,351
|
|
|
158,178
|
|
|
6,478
|
|
|
164,656
|
|
||||||
Net income per share - basic
|
$
|
0.92
|
|
|
$
|
0.04
|
|
|
$
|
0.96
|
|
|
$
|
1.58
|
|
|
$
|
0.07
|
|
|
$
|
1.65
|
|
Net income per share - diluted
|
$
|
0.82
|
|
|
$
|
0.03
|
|
|
$
|
0.85
|
|
|
$
|
1.40
|
|
|
$
|
0.06
|
|
|
$
|
1.46
|
|
|
Three Months Ended
September 30, 2014
|
|
Nine Months Ended
September 30, 2014
|
||||||||||||||||||||
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
||||||||||||
Selling, general, and administrative
|
$
|
149,748
|
|
|
$
|
(5,745
|
)
|
|
$
|
144,003
|
|
|
$
|
361,012
|
|
|
$
|
(17,052
|
)
|
|
$
|
343,960
|
|
Total operating expenses
|
543,069
|
|
|
(5,745
|
)
|
|
537,324
|
|
|
1,426,164
|
|
|
(17,052
|
)
|
|
1,409,112
|
|
||||||
Income from operations
|
182,719
|
|
|
5,745
|
|
|
188,464
|
|
|
591,064
|
|
|
17,052
|
|
|
608,116
|
|
||||||
Income before income taxes
|
176,078
|
|
|
5,745
|
|
|
181,823
|
|
|
554,460
|
|
|
17,052
|
|
|
571,512
|
|
||||||
Income tax expense
|
96,358
|
|
|
2,090
|
|
|
98,448
|
|
|
316,562
|
|
|
6,919
|
|
|
323,481
|
|
||||||
Net income
|
79,720
|
|
|
3,655
|
|
|
83,375
|
|
|
237,898
|
|
|
10,133
|
|
|
248,031
|
|
||||||
Net income per share - basic
|
$
|
0.79
|
|
|
$
|
0.04
|
|
|
$
|
0.83
|
|
|
$
|
2.37
|
|
|
$
|
0.10
|
|
|
$
|
2.47
|
|
Net income per share - diluted
|
$
|
0.70
|
|
|
$
|
0.03
|
|
|
$
|
0.73
|
|
|
$
|
2.10
|
|
|
$
|
0.09
|
|
|
$
|
2.19
|
|
|
Three Months Ended
December 31, 2014
|
|
Year Ended
December 31, 2014
|
||||||||||||||||||||
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
|
As Previously Reported
|
|
Adjustments
|
|
As Revised
|
||||||||||||
Selling, general, and administrative
|
$
|
143,743
|
|
|
$
|
31,564
|
|
|
$
|
175,307
|
|
|
$
|
504,755
|
|
|
$
|
14,512
|
|
|
$
|
519,267
|
|
Total operating expenses
|
554,962
|
|
|
31,564
|
|
|
586,526
|
|
|
1,981,126
|
|
|
14,512
|
|
|
1,995,638
|
|
||||||
Income from operations
|
247,367
|
|
|
(31,564
|
)
|
|
215,803
|
|
|
838,431
|
|
|
(14,512
|
)
|
|
823,919
|
|
||||||
Income before income taxes
|
221,287
|
|
|
(31,564
|
)
|
|
189,723
|
|
|
775,747
|
|
|
(14,512
|
)
|
|
761,235
|
|
||||||
Income tax expense
|
111,111
|
|
|
(11,483
|
)
|
|
99,628
|
|
|
427,673
|
|
|
(4,564
|
)
|
|
423,109
|
|
||||||
Net income
|
110,176
|
|
|
(20,081
|
)
|
|
90,095
|
|
|
348,074
|
|
|
(9,948
|
)
|
|
338,126
|
|
||||||
Net income per share - basic
|
$
|
1.09
|
|
|
$
|
(0.20
|
)
|
|
$
|
0.89
|
|
|
$
|
3.46
|
|
|
$
|
(0.10
|
)
|
|
$
|
3.36
|
|
Net income per share - diluted
|
$
|
0.96
|
|
|
$
|
(0.18
|
)
|
|
$
|
0.78
|
|
|
$
|
3.07
|
|
|
$
|
(0.09
|
)
|
|
$
|
2.98
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2015
|
|
2014
|
||||
Net income - basic and diluted
|
|
$
|
76,021
|
|
|
$
|
68,305
|
|
|
|
|
|
|
||||
(Shares in thousands)
|
|
|
|
|
||||
Weighted average shares - basic
|
|
102,227
|
|
|
98,709
|
|
||
Effect of dilutive securities:
|
|
|
|
|
||||
Stock options
|
|
9,313
|
|
|
9,879
|
|
||
Restricted stock
|
|
467
|
|
|
401
|
|
||
Warrants
|
|
2,512
|
|
|
3,162
|
|
||
Dilutive potential shares
|
|
12,292
|
|
|
13,442
|
|
||
Weighted average shares - diluted
|
|
114,519
|
|
|
112,151
|
|
||
|
|
|
|
|
||||
Net income per share - basic
|
|
$
|
0.74
|
|
|
$
|
0.69
|
|
Net income per share - diluted
|
|
$
|
0.66
|
|
|
$
|
0.61
|
|
|
|
Three Months Ended March 31,
|
||||
(Shares in thousands)
|
|
2015
|
|
2014
|
||
Stock options
|
|
3,673
|
|
|
3,646
|
|
Convertible senior notes
|
|
1,929
|
|
|
4,761
|
|
|
|
Amortized
|
|
Unrealized
|
|
Fair
|
||||||||||
As of March 31, 2015
|
|
Cost Basis
|
|
Gains
|
|
Losses
|
|
Value
|
||||||||
Unrestricted
|
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
|
$
|
530,693
|
|
|
$
|
898
|
|
|
$
|
(99
|
)
|
|
$
|
531,492
|
|
U.S. government and government agency obligations
|
|
56,433
|
|
|
201
|
|
|
—
|
|
|
56,634
|
|
||||
Municipal bonds
|
|
39,807
|
|
|
52
|
|
|
(3
|
)
|
|
39,856
|
|
||||
Equity securities
|
|
17,005
|
|
|
72,575
|
|
|
—
|
|
|
89,580
|
|
||||
|
|
$
|
643,938
|
|
|
$
|
73,726
|
|
|
$
|
(102
|
)
|
|
$
|
717,562
|
|
|
|
|
|
|
|
|
|
|
||||||||
As of December 31, 2014
|
|
|
|
|
|
|
|
|
||||||||
Unrestricted
|
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
|
$
|
548,832
|
|
|
$
|
136
|
|
|
$
|
(1,462
|
)
|
|
$
|
547,506
|
|
U.S. government and government agency obligations
|
|
28,596
|
|
|
3
|
|
|
(46
|
)
|
|
28,553
|
|
||||
Municipal bonds
|
|
37,044
|
|
|
37
|
|
|
(43
|
)
|
|
37,038
|
|
||||
Equity securities
|
|
2,005
|
|
|
5,374
|
|
|
—
|
|
|
7,379
|
|
||||
|
|
616,477
|
|
|
5,550
|
|
|
(1,551
|
)
|
|
620,476
|
|
||||
Restricted
|
|
|
|
|
|
|
|
|
|
|||||||
Equity securities
|
|
15,000
|
|
|
76,439
|
|
|
—
|
|
|
91,439
|
|
||||
|
|
$
|
631,477
|
|
|
$
|
81,989
|
|
|
$
|
(1,551
|
)
|
|
$
|
711,915
|
|
|
|
March 31, 2015
|
|
December 31, 2014
|
||||
Maturities within one year
|
|
$
|
234,257
|
|
|
$
|
251,761
|
|
Maturities after one year through five years
|
|
392,624
|
|
|
360,208
|
|
||
Maturities after five years through ten years
|
|
1,101
|
|
|
1,128
|
|
||
|
|
$
|
627,982
|
|
|
$
|
613,097
|
|
|
Less than 12 Months
|
|
12 Months or Greater
|
|
Total
|
||||||||||||||||||
As of March 31, 2015
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
||||||||||||
Corporate bonds
|
$
|
136,720
|
|
|
$
|
(85
|
)
|
|
$
|
4,139
|
|
|
$
|
(14
|
)
|
|
$
|
140,859
|
|
|
$
|
(99
|
)
|
Municipal bonds
|
3,938
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
3,938
|
|
|
(3
|
)
|
||||||
|
$
|
140,658
|
|
|
$
|
(88
|
)
|
|
$
|
4,139
|
|
|
$
|
(14
|
)
|
|
$
|
144,797
|
|
|
$
|
(102
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As of December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate bonds
|
$
|
390,613
|
|
|
$
|
(1,462
|
)
|
|
—
|
|
|
—
|
|
|
$
|
390,613
|
|
|
$
|
(1,462
|
)
|
||
U.S. government and government agency obligations
|
25,549
|
|
|
(46
|
)
|
|
—
|
|
|
—
|
|
|
25,549
|
|
|
(46
|
)
|
||||||
Municipal bonds
|
10,779
|
|
|
(43
|
)
|
|
—
|
|
|
—
|
|
|
10,779
|
|
|
(43
|
)
|
||||||
|
$
|
426,941
|
|
|
$
|
(1,551
|
)
|
|
—
|
|
|
—
|
|
|
$
|
426,941
|
|
|
$
|
(1,551
|
)
|
|
|
|
Fair Value Measurements at Reporting Date Using
|
||||||||
As of March 31, 2015
|
Fair Value
|
|
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
|
|
Significant Other
Observable Inputs
(Level 2)
|
||||||
Available-for-sale marketable securities:
|
|
|
|
|
|
||||||
Unrestricted
|
|
|
|
|
|
||||||
Corporate bonds
|
$
|
531,492
|
|
|
—
|
|
|
$
|
531,492
|
|
|
U.S. government and government agency obligations
|
56,634
|
|
|
—
|
|
|
56,634
|
|
|||
Municipal bonds
|
39,856
|
|
|
—
|
|
|
39,856
|
|
|||
Equity securities
|
89,580
|
|
|
$
|
89,580
|
|
|
—
|
|
||
|
$
|
717,562
|
|
|
$
|
89,580
|
|
|
$
|
627,982
|
|
|
|
|
|
|
|
||||||
As of December 31, 2014
|
|
|
|
|
|
||||||
Available-for-sale marketable securities:
|
|
|
|
|
|
||||||
Unrestricted
|
|
|
|
|
|
||||||
Corporate bonds
|
$
|
547,506
|
|
|
—
|
|
|
$
|
547,506
|
|
|
U.S. government and government agency obligations
|
28,553
|
|
|
—
|
|
|
28,553
|
|
|||
Municipal bonds
|
37,038
|
|
|
—
|
|
|
37,038
|
|
|||
Equity securities
|
7,379
|
|
|
$
|
7,379
|
|
|
—
|
|
||
|
620,476
|
|
|
7,379
|
|
|
613,097
|
|
|||
Restricted
|
|
|
|
|
|
||||||
Equity securities
|
91,439
|
|
|
—
|
|
|
91,439
|
|
|||
|
$
|
711,915
|
|
|
$
|
7,379
|
|
|
$
|
704,536
|
|
|
March 31,
|
|
December 31,
|
||||
|
2015
|
|
2014
|
||||
Raw materials
|
$
|
9,644
|
|
|
$
|
10,923
|
|
Work-in-process
|
83,990
|
|
|
73,519
|
|
||
Finished goods
|
11,398
|
|
|
10,768
|
|
||
Deferred costs
|
28,831
|
|
|
33,651
|
|
||
|
$
|
133,863
|
|
|
$
|
128,861
|
|
|
March 31,
|
|
December 31,
|
||||
|
2015
|
|
2014
|
||||
Accounts payable
|
$
|
90,601
|
|
|
$
|
99,508
|
|
Accrued payroll and related costs
|
64,112
|
|
|
92,778
|
|
||
Accrued clinical trial expense
|
44,659
|
|
|
41,555
|
|
||
Accrued sales-related charges, deductions, and royalties
|
165,511
|
|
|
133,085
|
|
||
Other accrued expenses and liabilities
|
97,879
|
|
|
116,563
|
|
||
|
$
|
462,762
|
|
|
$
|
483,489
|
|
ITEM 2.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
EYLEA (aflibercept) Injection
, known in the scientific literature as VEGF Trap-Eye, which is available in the United States, European Union (EU), Japan, and certain other countries outside the United States for the treatment of neovascular age-related macular degeneration (wet AMD), macular edema following central retinal vein occlusion (CRVO), and diabetic macular edema (DME). In addition, (i) in October 2014 and February 2015, the U.S. Food and Drug Administration (FDA) and European Commission, respectively, approved EYLEA for the treatment of macular edema following retinal vein occlusion (RVO), which includes macular edema following branch retinal vein occlusion (BRVO), (ii) in September 2014, the Japanese Ministry of Health, Labour and Welfare (MHLW) approved EYLEA for myopic choroidal neovascularization (mCNV), and (iii) in March 2015, the FDA approved EYLEA for the treatment of diabetic retinopathy in patients with DME. Bayer HealthCare has additional regulatory applications for EYLEA for the treatment of wet AMD, macular edema secondary to CRVO and BRVO, DME, and mCNV pending in other countries. We are collaborating with Bayer HealthCare on the global development and commercialization of EYLEA outside the United States.
|
•
|
ARCALYST
®
(rilonacept) Injection for Subcutaneous Use
, which is available in the United States for the treatment of Cryopyrin-Associated Periodic Syndromes (CAPS), including Familial Cold Auto-inflammatory Syndrome (FCAS) and Muckle-Wells Syndrome (MWS), in adults and children 12 years and older.
|
Trap-based Clinical Programs
|
|
EYLEA
|
|
In Phase 3 clinical development for the treatment of wet AMD (Asia) and DME (Asia) in collaboration with Bayer HealthCare. As described below, EYLEA is also being studied in combination with (i) an antibody to Platelet Derived Growth Factor Receptor Beta (PDGFR-beta), and (ii) an antibody to angiopoietin-2 (Ang2).
|
|
Antibody-based Clinical Programs in Collaboration with Sanofi
|
|
Praluent (alirocumab)
|
|
Antibody to PCSK9. In Phase 3 clinical development for low-density lipoprotein (LDL) cholesterol reduction and for the prevention of cardiovascular events.
|
|
Sarilumab (REGN88)
|
|
Antibody to the interleukin-6 receptor (IL-6R). In clinical development in rheumatoid arthritis (Phase 3) and non-infectious uveitis (Phase 2).
|
|
Dupilumab (REGN668)
|
|
Antibody to the interleukin-4 receptor (IL-4R) alpha subunit. In clinical development in atopic dermatitis in adults (Phase 3), atopic dermatitis in children (Phase 2), asthma (Phase 3), nasal polyps in patients who also have chronic sinusitis (NPwCS) (Phase 2), and eosinophilic esophagitis (EoE) (Phase 2).
|
|
REGN1033
|
|
Antibody to myostatin (GDF8). In Phase 2 clinical development in skeletal muscle disorders.
|
|
REGN2222
|
|
Antibody against respiratory syncytial virus (RSV). In Phase 1 clinical development. In the fourth quarter of 2014, Sanofi provided notice to Regeneron that it had elected not to continue co-development of REGN2222 effective December 2015, and will be entitled to receive royalties on any future sales of the product candidate.
|
|
Antibody-based Clinical Programs in Collaboration with Bayer HealthCare
|
|
REGN2176-3
|
|
Combination product comprised of an antibody to PDGFR-beta co-formulated with EYLEA for use in ophthalmology, via intravitreal administration. Phase 2 clinical study for the treatment of wet AMD initiated in the second quarter of 2015.
|
|
Antibody-based Clinical Programs Developing Independently
|
|
REGN1908-1909
*
|
|
Antibody combination in Phase 1/Phase 2 clinical development against allergic disease.
|
|
REGN1500
*
|
|
Antibody to Angptl-3. Phase 2 clinical study for the treatment of dyslipidemia in homozygous familial hypercholesterolemia initiated in the first quarter of 2015. Studies are ongoing under a partial clinical hold by the FDA that excludes women of childbearing potential.
|
|
REGN1400
|
|
Antibody to ErbB3. In Phase 1 clinical development in oncology.
|
|
REGN1154
*
|
|
Antibody against an undisclosed target. Phase 1 clinical study in Australia completed.
|
|
REGN1193
*
|
|
Antibody in Phase 1 clinical development against an undisclosed target.
|
|
REGN1979
|
|
Bispecific antibody against CD20 and CD3. In Phase 1 clinical development in oncology.
|
|
REGN910-3
**
|
|
Combination product comprised of an antibody to Ang2 co-formulated with EYLEA for use in ophthalmology, via intravitreal administration. In Phase 1 clinical development for the treatment of wet AMD and DME.
|
|
REGN2810
*
|
|
Antibody to PD-1. Phase 1 clinical study in oncology initiated in the first quarter of 2015.
|
|
Fasinumab (REGN475)
*
|
|
Antibody to Nerve Growth Factor (NGF). In development for the treatment of pain; currently on partial clinical hold by the FDA limiting duration of trials in osteoarthritis to 16 weeks.
|
*
Sanofi did not opt-in to or elected not to continue to co-develop the product candidate and we have sole global rights. Under the terms of our agreement, Sanofi is entitled to receive a mid-single digit royalty on any future sales of the product candidate.
|
||||
**
We acquired from Sanofi full exclusive rights to antibodies targeting the Ang2 receptor and ligand in ophthalmology, which were previously included in our antibody collaboration with Sanofi. Under the terms of our agreement, Sanofi is entitled to receive a potential development milestone and royalties on any future sales of the product candidate.
|
Study
|
Patient group
|
Primary efficacy endpoint
(percent change from baseline in LDL-C at 24 weeks)
|
Most common AEs
a
|
|
Praluent
|
Comparator
|
|||
LONG
TERM
Praluent (n =1,553) vs. placebo (n =788)
150 mg dose
|
All patients (high CV risk)
(total n=2,341)
|
61% reduction
|
1% increase (placebo)
b
|
Nasopharyngitis, upper respiratory tract infection, injection site reactions, influenza, diarrhea, urinary tract infection, bronchitis, myalgia, headache, back pain, arthralgia
|
- HeFH subgroup
(n=415)
|
56% reduction
|
7% increase (placebo)
c
|
||
- Non-HeFH subgroup
(n=1,926)
|
62% reduction
|
0.5% reduction (placebo)
d
|
||
COMBO I
Praluent (n =209) vs. placebo (n =107)
75 mg/150 mg dose
|
High CV risk
|
48% reduction
|
2% reduction (placebo)
b
|
Upper respiratory tract infection, nasopharyngitis, urinary tract infection, dizziness, sinusitis, injection-site reaction
|
COMBO II
Praluent (n =479) vs. ezetimibe (n =241)
75 mg/150 mg dose
|
High CV risk
|
51% reduction
|
21% reduction (ezetimibe)
b
|
Upper respiratory tract infection, accidental overdose, dizziness, myalgia
|
OPTIONS I
[Baseline statin = atorvastatin 20/40 mg]
Praluent (n =104) vs. ezetimibe (n =102) or double atorvastatin (n =104) or switch to rosuvastatin
e
(n =45)
75 mg / 150 mg dose
|
High CV risk
|
44% - 54% reduction
|
•
21% - 23% reduction (ezetimibe)
f
•
5% reduction (double statin dose)
b
•
21% reduction (statin switch)
b
|
Nasopharyngitis, upper respiratory tract infection, hypertension, back pain
|
|
|
|
|
|
|
|
|
|
|
(continued)
|
|
|
|
|
Study
|
Patient group
|
Primary efficacy endpoint
(percent change from baseline in LDL-C at 24 weeks)
|
Most common AEs
a
|
|
Praluent
|
Comparator
|
|||
OPTIONS II
[Baseline statin = rosuvastatin 10/20 mg]
Praluent (n =103) vs. ezetimibe (n =101) or double rosuvastatin (n =101)
75 mg / 150 mg dose
|
High CV risk
|
36% - 51% reduction
|
•
11% -14% reduction (ezetimibe)
g
•
16% reduction (statin switch)
g
|
Nasopharyngitis, upper respiratory tract infection, hypertension, back pain
|
ALTERNATIVE
Praluent (n =126) vs. ezetimibe (n =125)
[Validation arm = atorvastatin 20 mg (n =63)]
75 mg / 150 mg dose
|
High CV risk and history of intolerance to two or more statins
|
45% reduction
|
15% reduction (ezetimibe)
b
|
Myalgia, nasopharyngitis, arthralgia, upper respiratory tract infection, headache, fatigue
|
HIGH FH
Praluent (n =72) vs. placebo (n =35)
150 mg dose
|
HeFH
|
46% reduction
|
7% reduction (placebo)
b
|
Nasopharyngitis, injection-site reaction, diarrhea, sinusitis, bronchitis, headache, fatigue
|
FH I
Praluent (n =323) vs. placebo (n =163)
75 mg / 150 mg dose
|
HeFH
|
49% reduction
|
9% increase (placebo)
b
|
Injection site reactions, nasopharyngitis, influenza, headache
|
FH II
Praluent (n =167) vs. placebo (n =82)
75 mg / 150 mg dose
|
HeFH
|
49% reduction
|
3% increase (placebo)
b
|
|
MONO
Praluent (n =52) vs. ezetimibe (n =51)
75 mg/150 mg dose
|
Moderate CV risk
|
48% reduction
|
16% reduction (ezetimibe)
b
|
Nasopharyngitis,
influenza, upper respiratory tract infection
|
•
|
Efficacy remained consistent throughout treatment, and, at week 78 there was a 56% reduction from baseline in
|
•
|
At week 24, 81% of patients in the Praluent group achieved their pre-specified LDL-C goal (either 70 mg/dL or 100 mg/dL depending on baseline CV risk) compared to 8.5% for placebo (p<0.001).
|
•
|
AEs occurred in 81% of Praluent and 83% of placebo patients, leading to discontinuation in 7.2% and 5.8% of patients, respectively. AEs were similar between groups, apart from differences in injection site reactions (5.9% Praluent, 4.2% placebo), myalgia (5.4% Praluent, 2.9% placebo), neurocognitive events (1.2% Praluent, 0.5% placebo), and ophthalmological events (2.9% Praluent, 1.9% placebo). In a 3,752-patient, pooled safety analysis of nine placebo-controlled Praluent studies, rates of skeletal muscle-related (15.1% Praluent, 15.4% placebo) and neurocognitive events (0.8% Praluent, 0.7% placebo) were generally balanced between Praluent and placebo.
|
•
|
At week 78, positively adjudicated pre-specified CV AEs (including additional CV AEs beyond those in the
|
•
|
In a post hoc analysis using a pre-specified endpoint from the ODYSSEY OUTCOMES study that included CHD death, MI, stroke, or unstable angina requiring hospitalization, a lower rate of adjudicated major adverse cardiac events was observed in the Praluent group (27 of 1,550 patients, 1.7%) compared with the placebo group (26 of 788 patients, 3.3%; hazard ratio 0.52; 95% percent confidence interval (CI), 0.31 to 0.90; nominal p<0.01). The cumulative incidence curves diverged progressively over time.
|
•
|
ODYSSEY LONG TERM was not designed to evaluate CV outcomes. The number of CV events seen in the post hoc analysis was relatively small, which limits the ability to draw conclusions on the effects of Praluent on CV events. The ongoing ODYSSEY OUTCOMES trial will evaluate the CV benefits of Praluent.
|
•
|
12% to 33% of dupilumab-treated patients achieved clearing or near-clearing of skin lesions, as measured by an Investigator's Global Assessment (IGA) score of 0 or 1, compared to 2% with placebo (p=0.02 to p<0.0001).
|
•
|
Dupilumab-treated patients experienced a 16.5% to 47% mean reduction in itching, as measured by the pruritus numerical-rating scale (NRS) score, compared to an increase of 5% in the placebo group (p=0.0005 to p<0.0001).
|
•
|
In the high eosinophils patient group - mean improvements from baseline in FEV
1
(and mean percent change in FEV
1
) at 12 weeks, the primary (and a secondary) endpoint of the study were: 390 ml (26%) dupilumab 300 mg every other week (Q2W); 430 ml (26%) dupilumab 200 mg Q2W; 180 ml (10%) placebo. (p<0.01)
|
•
|
In the overall population - mean improvements from baseline in FEV
1
at 12 weeks (and mean percent change in FEV
1
) were: 280 ml (18%) dupilumab 300 mg Q2W; 310 ml (18%) dupilumab 200 mg Q2W; 120 ml (6%) placebo. (p<0.001)
|
•
|
In both the high eosinophils patient group and overall patient group - dupilumab showed a reduction in adjusted annualized rate of severe exacerbations compared to placebo (64% to 75% reduction, p<0.05 for high eosinophils group and p < 0.01 for the overall population)
|
|
|
2015 Events to Date
|
|
2015-2016 Plans (next 12 months)
|
Praluent (PCSK9 Antibody)
|
|
BLA accepted for priority review in the United States
|
|
Continue enrollment of Phase 3 ODYSSEY OUTCOMES trial
|
|
|
Regulatory application accepted for review by the EMA
|
|
Report additional results from Phase 3 ODYSSEY trials
|
|
|
Reported positive results from ODYSSEY CHOICE I and CHOICE II trials
|
|
File for additional regulatory approvals outside the United States
|
|
|
ODYSSEY LONG TERM 18-month trial results published in
|