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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
  
Commission File Number: 0-19034
REGENERON PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
New York13-3444607
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
777 Old Saw Mill River Road, Tarrytown, New York 10591-6707
(Address of principal executive offices, including zip code)
(914) 847-7000
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common Stock - par value $.001 per shareREGNNASDAQ Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.YesNo
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).YesNo
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).YesNo
The number of shares outstanding of each of the registrant's classes of common stock as of April 12, 2022:
Class of Common StockNumber of Shares
Class A Stock, $.001 par value1,818,146
Common Stock, $.001 par value108,028,048



REGENERON PHARMACEUTICALS, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
Page Numbers







"ARCALYST®," "Evkeeza®," "EYLEA®," "Inmazeb®," "Libtayo®" (in the United States), "Praluent®" (in the United States), "REGEN-COV®," "Regeneron®," "Regeneron Genetics Center®," "RGC," "Veloci-Bi®," "VelociGene®," "VelociHum®," "VelociMab®," "VelocImmune®," "VelociMouse®," "VelociSuite®," "VelociT®," and "ZALTRAP®" 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. This report refers to products of Regeneron Pharmaceuticals, Inc., its collaborators, and other parties. Consult the product label in each territory for specific information about such products.



Table of Contents

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except share data)
March 31,December 31,
20222021
ASSETS
Current assets:
Cash and cash equivalents$3,345.7 $2,885.6 
Marketable securities3,704.9 2,809.1 
Accounts receivable, net4,839.0 6,036.5 
Inventories1,991.5 1,951.3 
Prepaid expenses and other current assets424.9 332.4 
Total current assets14,306.0 14,014.9 
Marketable securities7,084.0 6,838.0 
Property, plant, and equipment, net3,556.4 3,482.2 
Deferred tax assets1,140.3 876.9 
Other noncurrent assets262.0 222.8 
Total assets$26,348.7 $25,434.8 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable$470.3 $564.0 
Accrued expenses and other current liabilities2,046.0 2,206.8 
Finance lease liabilities 719.7 
Deferred revenue491.3 442.0 
Total current liabilities3,007.6 3,932.5 
Long-term debt1,980.4 1,980.0 
Finance lease liabilities720.0  
Deferred revenue33.5 73.3 
Other noncurrent liabilities692.5 680.2 
Total liabilities6,434.0 6,666.0 
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 - 1,823,823 in 2022 and 2021
  
Common Stock, $.001 par value; 320,000,000 shares authorized; shares issued - 127,623,390 in 2022 and 126,244,444 in 2021
0.1 0.1 
Additional paid-in capital8,754.1 8,087.5 
Retained earnings 19,941.8 18,968.3 
Accumulated other comprehensive loss(170.1)(26.2)
Treasury Stock, at cost; 19,940,149 shares in 2022 and 19,392,961 shares in 2021
(8,611.2)(8,260.9)
Total stockholders' equity19,914.7 18,768.8 
Total liabilities and stockholders' equity$26,348.7 $25,434.8 
The accompanying notes are an integral part of the financial statements.
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REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)
(In millions, except per share data)
Three Months Ended
March 31,
20222021
Statements of Operations
Revenues:
Net product sales$1,638.6 $1,724.3 
Collaboration revenue1,232.5 754.4 
Other revenue94.0 50.0 
2,965.1 2,528.7 
Expenses:
Research and development843.8 742.9 
Acquired in-process research and development28.1  
Selling, general, and administrative450.0 405.6 
Cost of goods sold207.3 183.2 
Cost of collaboration and contract manufacturing197.6 124.8 
Other operating (income) expense, net(20.2)(40.5)
1,706.6 1,416.0 
Income from operations1,258.5 1,112.7 
Other income (expense):
Other (expense) income, net(183.8)154.9 
Interest expense(13.6)(14.6)
(197.4)140.3 
Income before income taxes1,061.1 1,253.0 
Income tax expense87.6 137.8 
Net income$973.5 $1,115.2 
Net income per share - basic$9.12 $10.58 
Net income per share - diluted$8.61 $10.09 
Weighted average shares outstanding - basic106.8 105.4 
Weighted average shares outstanding - diluted113.1 110.5 
Statements of Comprehensive Income
Net income$973.5 $1,115.2 
Other comprehensive income (loss), net of tax:
Unrealized loss on debt securities(144.9)(13.3)
Unrealized gain on cash flow hedges1.0 0.2 
Comprehensive income $829.6 $1,102.1 
The accompanying notes are an integral part of the financial statements.
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REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
(In millions)
Class A StockCommon StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury StockTotal Stockholders' Equity
SharesAmountSharesAmountSharesAmount
Balance, December 31, 20211.8$ 126.2$0.1 $8,087.5 $18,968.3 $(26.2)(19.4)$(8,260.9)$18,768.8 
Issuance of Common Stock for equity awards granted under long-term incentive plans
— — 1.6 — 593.7 — — — — 593.7 
Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations
— — (0.2)— (105.8)— — — — (105.8)
Issuance/distribution of Common Stock for 401(k) Savings Plan
— — — — 12.8 — — — 1.7 14.5 
Repurchases of Common Stock
— — — — — — — (0.5)(352.0)(352.0)
Stock-based compensation charges— — — — 165.9 — — — — 165.9 
Net income— — — — — 973.5 — — — 973.5 
Other comprehensive loss, net of tax— — — — — — (143.9)— — (143.9)
Balance, March 31, 20221.8 $ 127.6 $0.1 $8,754.1 $19,941.8 $(170.1)(19.9)$(8,611.2)$19,914.7 
Balance, December 31, 20201.8 $ 121.5 $0.1 $6,716.2 $10,893.0 $29.3 (16.4)$(6,613.3)$11,025.3 
Issuance of Common Stock for equity awards granted under long-term incentive plans— — 0.5 — 93.9 — — — — 93.9 
Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations— — (0.1)— (66.4)— — — — (66.4)
Issuance/distribution of Common Stock for 401(k) Savings Plan— — — — 8.5 — — — 1.5 10.0 
Repurchases of Common Stock— — — — — — — (0.7)(323.5)(323.5)
Stock-based compensation charges— — — — 135.6 — — — — 135.6 
Net income— — — — — 1,115.2 — — — 1,115.2 
Other comprehensive loss, net of tax— — — — — — (13.1)— — (13.1)
Balance, March 31, 20211.8$ 121.9$0.1 $6,887.8 $12,008.2 $16.2 (17.1)$(6,935.3)$11,977.0 
The accompanying notes are an integral part of the financial statements.
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REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
Three Months Ended
March 31,
20222021
Cash flows from operating activities:
Net income $973.5 $1,115.2 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization74.3 67.4 
Stock-based compensation expense166.9 130.9 
Losses (gains) on marketable and other securities, net204.5 (144.4)
Other non-cash items, net84.3 28.7 
Deferred taxes(225.0)10.1 
Changes in assets and liabilities:
Decrease (increase) in accounts receivable1,197.5 (58.3)
Increase in inventories(88.6)(252.8)
Increase in prepaid expenses and other assets(44.8)(50.0)
Increase (decrease) in deferred revenue9.5 (143.6)
Decrease in accounts payable, accrued expenses, and other liabilities(250.4)(34.7)
Total adjustments1,128.2 (446.7)
Net cash provided by operating activities2,101.7 668.5 
Cash flows from investing activities:
Purchases of marketable and other securities(2,309.8)(1,360.0)
Sales or maturities of marketable and other securities746.3 416.3 
Capital expenditures(141.8)(115.3)
Net cash used in investing activities(1,705.3)(1,059.0)
Cash flows from financing activities:
Proceeds from issuance of Common Stock521.6 95.0 
Payments in connection with Common Stock tendered for employee tax obligations(98.8)(154.5)
Repurchases of Common Stock(358.1)(306.9)
Net cash provided by (used in) financing activities64.7 (366.4)
Net increase (decrease) in cash, cash equivalents, and restricted cash461.1 (756.9)
Cash, cash equivalents, and restricted cash at beginning of period2,898.1 2,207.3 
Cash, cash equivalents, and restricted cash at end of period$3,359.2 $1,450.4 
The accompanying notes are an integral part of the financial statements.
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REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Interim Financial Statements
Basis of Presentation
The interim Condensed Consolidated Financial Statements of Regeneron Pharmaceuticals, Inc. and its subsidiaries ("Regeneron," "Company," "we," "us," and "our") have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and disclosures necessary for a presentation of the Company's financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, these financial statements reflect all normal recurring adjustments and accruals necessary for a fair statement of the Company's condensed consolidated financial statements for such periods. The results of operations for any interim period are not necessarily indicative of the results for the full year. The December 31, 2021 Condensed Consolidated Balance Sheet data were derived from audited financial statements, but do not include all disclosures required by accounting principles generally accepted in the United States of America. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
Certain reclassifications have been made to prior period amounts to conform with the current period's presentation.
Beginning with the first quarter of 2022, the Company added a new line item, Acquired in-process research and development, to its Condensed Consolidated Statements of Operations and Comprehensive Income. This line item includes in-process research and development acquired in connection with asset acquisitions as well as up-front/opt-in payments related to license and collaboration agreements. Amounts recorded in this line item for the three months ended March 31, 2022 would have historically been recorded to Research and development expenses. No such amounts were recorded for the three months ended March 31, 2021.
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2. Product Sales
Net product sales consist of the following:
(In millions)Three Months Ended
March 31,
Net Product Sales in the United States
20222021
EYLEA®
$1,517.6 $1,347.0 
Libtayo®
78.9 69.1 
Praluent®
33.6 43.3 
REGEN-COV®*
 262.2 
Evkeeza®
8.5 0.5 
ARCALYST®
 **2.2 
$1,638.6 $1,724.3 
* Net product sales of REGEN-COV in the United States relate to product sold in connection with our agreements with the U.S. government. See Note 3 for further details.
** Effective April 1, 2021, Kiniksa records net product sales of ARCALYST in the United States. Previously, the Company recorded net product sales of ARCALYST in the United States.
As of March 31, 2022 and December 31, 2021, the Company had $3.664 billion and $5.059 billion, respectively, of trade accounts receivable that were recorded within Accounts receivable, net.
The Company had product sales to certain customers that accounted for more than 10% of total gross product revenue for the three months ended March 31, 2022 and 2021. Sales to each of these customers as a percentage of the Company's total gross product revenue are as follows:
Three Months Ended
March 31,
20222021
Besse Medical, a subsidiary of AmerisourceBergen Corporation
55 %46 %
McKesson Corporation30 %29 %
U.S. government %13 %
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3. Collaboration, License, and Other Agreements
a. Sanofi
Amounts recognized in our Statements of Operations in connection with our collaborations with Sanofi are detailed below:
Statement of Operations ClassificationThree Months Ended
March 31,
(In millions)20222021
Antibody:
Regeneron's share of profits in connection with commercialization of antibodiesCollaboration revenue$415.3 $260.6 
Sales-based milestone earnedCollaboration revenue$50.0 $ 
Reimbursement for manufacturing of commercial suppliesCollaboration revenue$160.8 $105.6 
Reimbursement of research and development expensesReduction of Research and development expense$36.5 $30.1 
Regeneron's obligation for its share of Sanofi research and development expensesResearch and development expense$(9.7)$(11.9)
Reimbursement of commercialization-related expenses Reduction of Selling, general, and administrative expense$91.7 $60.4 
Immuno-oncology:
Regeneron's share of profits (losses) in connection with commercialization of Libtayo outside the United StatesCollaboration revenue$2.8 $(6.1)
Reimbursement for manufacturing of ex-U.S. commercial suppliesCollaboration revenue$2.0 $4.7 
Reimbursement of research and development expensesReduction of Research and development expense$21.5 $21.9 
Reimbursement of commercialization-related expensesReduction of Selling, general, and administrative expense$19.0 $18.5 
Regeneron's obligation for its share of Sanofi commercial expensesSelling, general, and administrative expense$(9.2)$(7.7)
Regeneron's obligation for Sanofi's share of Libtayo U.S. gross profitsCost of goods sold$(32.3)$(30.4)
Amounts recognized in connection with up-front payments receivedOther operating income$18.1 $22.9 
Antibody
The Company is party to a global, strategic collaboration with Sanofi to research, develop, and commercialize fully human monoclonal antibodies (the "Antibody Collaboration"), which currently consists of Dupixent® (dupilumab), Kevzara® (sarilumab), and itepekimab. Under the terms of the Antibody License and Collaboration Agreement, Sanofi is generally responsible for funding 80%–100% of agreed-upon development costs.
Sanofi leads commercialization activities for products under the Antibody Collaboration, subject to the Company's right to co-commercialize such products. In addition to profit and loss sharing, the Company is entitled to receive sales milestone payments from Sanofi. During the three months ended March 31, 2022, the Company earned a $50.0 million sales-based milestone from Sanofi, upon aggregate annual sales of antibodies outside the United States (including Praluent) exceeding $2.0 billion on a rolling twelve-month basis. We are entitled to receive up to an aggregate of $100.0 million in additional sales milestone payments from Sanofi, which includes the next sales milestone payment of $50.0 million that would be earned when such sales outside the United States exceed $2.5 billion on a rolling twelve-month basis.
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The following table summarizes contract balances in connection with the Company's Antibody Collaboration with Sanofi:
March 31,December 31,
(In millions)20222021
Accounts receivable, net $500.4 $504.8 
Deferred revenue
$380.2 $368.7 
Immuno-Oncology
The Company is party to a collaboration with Sanofi to research, develop, and commercialize antibody-based cancer treatments in the field of immuno-oncology (the "IO Collaboration").
Under the terms of the Immuno-oncology License and Collaboration Agreement, the parties are co-developing and co-commercializing Libtayo (cemiplimab). The parties share equally, on an ongoing basis, agreed-upon development and commercialization expenses for Libtayo. The Company has principal control over the development of Libtayo and leads commercialization activities in the United States (see Note 2 for related product sales information), while Sanofi leads commercialization activities outside of the United States. The parties share equally in profits and losses in connection with the commercialization of Libtayo.
The following table summarizes contract balances in connection with the Company's IO Collaboration with Sanofi:
March 31,December 31,
(In millions)20222021
Accounts receivable, net
$4.9 $(22.5)
Deferred revenue
$21.1 $16.0 
Other liabilities
$258.0 $276.1 
Other liabilities include up-front payments received from Sanofi for which recognition has been deferred.
The aggregate amount of the estimated consideration under the IO Collaboration related to the Company's obligation that was unsatisfied (or partially unsatisfied) as of March 31, 2022 was $532.8 million. This amount is expected to be recognized over the remaining period in which the Company is obligated to satisfy its obligation in connection with performing development activities.
b. Bayer
The Company is party to a license and collaboration agreement with Bayer for the global development and commercialization of EYLEA (aflibercept) and aflibercept 8 mg outside the United States. All agreed-upon development expenses incurred by the Company and Bayer are shared equally.
Bayer markets EYLEA outside the United States and the companies share equally in profits and losses from sales. In Japan, the Company was entitled to receive a tiered percentage of between 33.5% and 40.0% of EYLEA net product sales through 2021, and effective January 1, 2022, the companies share equally in profits and losses from sales.
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Amounts recognized in our Statements of Operations in connection with our Bayer collaboration are as follows:
Statement of Operations ClassificationThree Months Ended
March 31,
(In millions)20222021
Regeneron's share of profits in connection with commercialization of EYLEA outside the United StatesCollaboration revenue$338.4 $308.9 
Reimbursement for manufacturing of ex-U.S. commercial suppliesCollaboration revenue$25.0 $13.9 
One-time payment in connection with change in Japan arrangement
Collaboration revenue$21.9 $ 
Reimbursement of research and development expenses
Reduction of Research and development expense
$11.1 

$10.8 
Regeneron's obligation for its share of Bayer research and development expenses
Research and development expense
$(10.8)$(12.5)
The following table summarizes contract balances in connection with our Bayer collaboration:
March 31,December 31,
(In millions)20222021
Accounts receivable, net$344.8 $355.5 
Deferred revenue
$122.4 $129.4 
c. Teva
The Company and Teva are parties to a collaboration agreement (the "Teva Collaboration Agreement") to develop and commercialize fasinumab globally, excluding certain Asian countries that are subject to our collaboration agreement with Mitsubishi Tanabe Pharma Corporation. The Company leads global development activities, and the parties share development costs equally, on an ongoing basis, under a global development plan.
Amounts recognized in our Statements of Operations in connection with the Teva Collaboration Agreement were not material for the three months ended March 31, 2022 and 2021. In addition, contract balances in our Balance Sheets were not material as of March 31, 2022 and December 31, 2021.
The aggregate amount of the estimated consideration under the Teva Collaboration Agreement related to the Company's obligation that was unsatisfied (or partially unsatisfied) as of March 31, 2022 was $83.6 million. This amount is expected to be recognized over the remaining period in which the Company is obligated to satisfy its obligation in connection with performing development activities.
d. U.S. Government
In 2020, we announced an expansion of our Other Transaction Agreement with the Biomedical Advanced Research Development Authority ("BARDA"), pursuant to which the U.S. Department of Health and Human Services ("HHS") was obligated to fund certain of our costs incurred for research and development activities related to COVID-19 treatments.
In 2020 and 2021, we entered into agreements to manufacture and deliver filled and finished drug product of REGEN-COV (casirivimab and imdevimab) to the U.S. government. In connection with one of our 2021 agreements, Roche supplied a portion of the doses to Regeneron to fulfill our agreement with the U.S. government (see "Roche" below for further details regarding our collaboration agreement with Roche).
As of December 31, 2021, the Company had completed its final deliveries of drug product under its agreements with the U.S. government. See Note 2 for REGEN-COV net product sales recognized during 2021.
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e. Roche
In 2020, we entered into a collaboration agreement (the "Roche Collaboration Agreement") with Roche to develop, manufacture, and distribute the casirivimab and imdevimab antibody cocktail (known as REGEN-COV in the United States and Ronapreve in other countries). We lead global development activities for casirivimab and imdevimab, and the parties jointly fund certain studies.
Under the terms of the agreement, each party is obligated to dedicate a certain amount of manufacturing capacity to casirivimab and imdevimab each year. We distribute the product in the United States and Roche distributes the product outside of the United States. The parties share gross profits from worldwide sales based on a pre-specified formula, depending on the amount of manufactured product supplied by each party to the market. Each quarter, a single payment is due from one party to the other to true-up the global gross profits between the parties. If Regeneron is to receive a true-up payment from Roche, such amount will be recorded to Collaboration revenue. If Regeneron is to make a true-up payment to Roche, such amount will be recorded to Cost of goods sold.
Amounts recognized in our Statements of Operations in connection with the Roche Collaboration Agreement are as follows:
Statement of Operations ClassificationThree Months Ended
March 31,
(In millions)20222021
Global gross profit payment from Roche in connection with sales of RonapreveCollaboration revenue$216.3 $66.8 
Reimbursement of research and development expenses from Roche was $86.8 million for the three months ended March 31, 2021. Such amounts were not material for the three months ended March 31, 2022.
The following table summarizes contract balances in connection with the Roche Collaboration Agreement:
March 31,December 31,
(In millions)20222021
Accounts receivable, net$204.3 $ 
Accrued expenses and other current liabilities$ $268.8 
f. Alnylam
In 2018, the Company and Alnylam Pharmaceuticals, Inc. entered into a collaboration to discover RNA interference ("RNAi") therapeutics for NASH and potentially other related diseases, as well as to research, co-develop and commercialize any therapeutic product candidates that emerge from these discovery efforts (including ALN-HSD, which is currently in clinical development). The parties share equally, on an ongoing basis, development expenses for ALN-HSD.
In 2019, the parties entered into a global, strategic collaboration to discover, develop, and commercialize RNAi therapeutics for a broad range of diseases by addressing therapeutic disease targets expressed in the eye and central nervous system ("CNS"), in addition to a select number of targets expressed in the liver. For each program, we provide Alnylam with a specified amount of funding at program initiation and at lead candidate designation. Following designation of a lead candidate, the parties may further advance such lead candidate under either a co-commercialization collaboration agreement structure (under which the parties are advancing ALN-APP, which is currently in clinical development) or a license agreement.
In addition, during 2019, the parties entered into a Co-Commercialization Collaboration Agreement for a silencing RNA ("siRNA") therapeutic targeting the C5 component of the human complement pathway being developed by Alnylam, with Alnylam as the lead party, and a License Agreement for a combination product consisting of such siRNA therapeutic (cemdisiran) and a fully human monoclonal antibody being developed by the Company (pozelimab), with the Company as the licensee. Under the C5 siRNA Co-Commercialization Collaboration Agreement, the parties share costs equally and under the License Agreement, the licensee is responsible for its own costs and expenses.
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Amounts recognized in our Statements of Operations in connection with the Alnylam agreements described above were not material for the three months ended March 31, 2022 and 2021. In addition, contract balances in our Balance Sheets were not material as of March 31, 2022 and December 31, 2021.
g. Checkmate
In April 2022, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") to acquire Checkmate Pharmaceuticals, Inc. at a total equity value of approximately $250 million. On May 2, 2022, the Company commenced a tender offer to acquire any and all outstanding shares of common stock of Checkmate at a price of $10.50 per share, to be paid to each shareholder tendering Checkmate shares in cash, without interest, subject to reduction for any applicable withholding taxes. The consummation of the tender offer is subject to certain conditions, including the tender of at least a majority of the outstanding shares of Checkmate common stock, the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and other customary closing conditions. If the tender offer is successfully consummated, the Company will acquire all shares not acquired in the tender offer through a merger that does not require the vote of Checkmate stockholders. The transaction is expected to close in mid-2022.
4. Net Income Per Share
Basic net income per share is computed by dividing net income by the weighted average number of shares of Common Stock and Class A Stock outstanding. Net income per share is presented on a combined basis, inclusive of Common Stock and Class A Stock outstanding, as each class of stock has equivalent economic rights. Diluted net income per share includes the potential dilutive effect of other securities as if such securities were converted or exercised during the period, when the effect is dilutive. The calculations of basic and diluted net income per share are as follows:
Three Months Ended
March 31,
(In millions, except per share data)20222021
Net income - basic and diluted$973.5 $1,115.2 
Weighted average shares - basic106.8 105.4 
Effect of dilutive securities:
Stock options5.0 4.5 
Restricted stock awards and restricted stock units1.3 0.6 
Weighted average shares - diluted113.1 110.5 
Net income per share - basic$9.12 $10.58 
Net income per share - diluted$8.61 $10.09 
Shares which have been excluded from diluted per share amounts because their effect would have been antidilutive include the following:
Three Months Ended
March 31,
(Shares in millions)20222021
Stock options2.2 5.0 
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5. Marketable Securities
Marketable securities as of March 31, 2022 and December 31, 2021 consist of both available-for-sale debt securities of investment grade issuers (see below and Note 6) as well as equity securities of publicly traded companies (see Note 6).
The following tables summarize the Company's investments in available-for-sale debt securities:
(In millions)AmortizedUnrealizedFair
As of March 31, 2022Cost BasisGainsLossesValue
Corporate bonds$8,422.3 $1.3 $(207.4)$8,216.2 
U.S. government and government agency obligations385.8  (3.9)381.9 
Sovereign bonds55.2  (1.5)53.7 
Commercial paper712.7  (1.3)711.4 
Certificates of deposit344.2  (0.9)343.3 
Asset-backed securities44.9  (1.2)43.7 
$9,965.1 $1.3 $(216.2)$9,750.2 
As of December 31, 2021
Corporate bonds$7,518.4 $10.2 $(40.9)$7,487.7 
U.S. government and government agency obligations109.0 0.3 (0.8)108.5 
Sovereign bonds64.4 0.3 (0.3)64.4 
Commercial paper439.7  (0.1)439.6 
Certificates of deposit255.2  (0.1)255.1 
Asset-backed securities42.0  (0.1)41.9 
$8,428.7 $10.8 $(42.3)$8,397.2 
The Company classifies its investments in available-for-sale debt securities based on their contractual maturity dates. The available-for-sale debt securities listed as of March 31, 2022 mature at various dates through March 2027. The fair values of available-for-sale debt securities by contractual maturity consist of the following:
March 31,December 31,
(In millions)20222021
Maturities within one year$3,704.9 $2,809.1 
Maturities after one year through five years6,045.3 5,588.1 
$9,750.2 $8,397.2 

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The following table shows the fair value of the Company's available-for-sale debt securities that have unrealized losses, aggregated by investment category and length of time that the individual securities have been in a continuous loss position.
Less than 12 Months12 Months or GreaterTotal
(In millions)
As of March 31, 2022
Fair ValueUnrealized LossFair ValueUnrealized LossFair ValueUnrealized Loss
Corporate bonds$7,269.3 $(194.2)$212.9 $(13.2)$7,482.2 $(207.4)
U.S. government and government agency obligations326.2 (3.8)1.2 (0.1)327.4 (3.9)
Sovereign bonds44.7 (1.5)  44.7 (1.5)
Commercial paper666.5 (1.3)  666.5 (1.3)
Certificates of deposit324.5 (0.9)  324.5 (0.9)
Asset-backed securities43.7 (1.2)  43.7 (1.2)
$8,674.9 $(202.9)$214.1 $(13.3)$8,889.0 $(216.2)
As of December 31, 2021
Corporate bonds$5,889.3 $(40.9)$ $ $5,889.3 $(40.9)
U.S. government and government agency obligations90.0 (0.8)  90.0 (0.8)
Sovereign bonds37.0 (0.3)  37.0 (0.3)
Commercial paper295.7 (0.1)  295.7 (0.1)
Certificates of deposit169.4 (0.1)  169.4 (0.1)
Asset-backed securities34.9 (0.1)  34.9 (0.1)
$6,516.3 $(42.3)$ $ $6,516.3 $(42.3)
For the three months ended March 31, 2022, realized gains and losses on sales of marketable securities were not material. For the three months ended March 31, 2021, realized gains were not material and there were no realized losses on sales of marketable securities.
With respect to marketable securities, for the three months ended March 31, 2022 and 2021, amounts reclassified from Accumulated other comprehensive loss into Other (expense) income, net were related to realized gains and losses on sales of available-for-sale debt securities.
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6. Fair Value Measurements
The table below summarizes the Company's assets which are measured at fair value on a recurring basis. The following fair value hierarchy is used to classify assets, based on inputs to valuation techniques utilized to measure fair value:
Level 1 - Quoted prices in active markets for identical assets
Level 2 - Significant other observable inputs, such as quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-based valuations in which significant inputs used are observable
Level 3 - Significant other unobservable inputs
(In millions)Fair Value Measurements at Reporting Date
As of March 31, 2022Fair ValueLevel 1Level 2
Available-for-sale debt securities:
Corporate bonds$8,216.2 $ $8,216.2 
U.S. government and government agency obligations381.9  381.9 
Sovereign bonds53.7  53.7 
Commercial paper711.4  711.4 
Certificates of deposit343.3  343.3 
Asset-backed securities43.7  43.7 
Equity securities (unrestricted)43.9 43.9  
Equity securities (restricted)994.8 994.8  
$10,788.9 $1,038.7 $9,750.2 
As of December 31, 2021
Available-for-sale debt securities:
Corporate bonds$7,487.7 $ $7,487.7 
U.S. government and government agency obligations108.5  108.5 
Sovereign bonds64.4  64.4 
Commercial paper439.6  439.6 
Certificates of deposit255.1  255.1 
Asset-backed securities41.9  41.9 
Equity securities (unrestricted)58.4 58.4  
Equity securities (restricted)1,191.5 1,191.5  
$9,647.1 $1,249.9 $8,397.2 
The Company held certain restricted equity securities as of March 31, 2022 which are subject to transfer restrictions that expire at various dates through 2024.
During the three months ended March 31, 2022 and 2021, we recorded $