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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, 2023
			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: 000-19034

REGENERON PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

New York						13-3444607
(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 class			Trading Symbol			Name of each exchange on which registered
Common Stock - par value $.001 per share			REGN			NASDAQ 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.

Yes

☒

No

☐

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).

Yes

☒

No

☐

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 filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging 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).

Yes

☐

No

☒

The number of shares outstanding of each of the registrant's classes of common stock as of April 11, 2023:

Class of Common Stock						Number of Shares
Class A Stock, $.001 par value						1,818,146
Common Stock, $.001 par value						107,892,108

---

REGENERON PHARMACEUTICALS, INC.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

Page Numbers

PART I

FINANCIAL INFORMATION

Item 1.

Financial Statements (unaudited)

2

Condensed Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022

2

Condensed Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended March 31, 2023 and 2022

3

Condensed Consolidated Statements of Stockholders' Equity for the Three Months Ended March 31, 2023 and 2022

4

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022

5

Notes to Condensed Consolidated Financial Statements

6

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

21

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

42

Item 4.

Controls and Procedures

42

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

42

Item 1A.

Risk Factors

43

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

77

Item 6.

Exhibits

78

SIGNATURE PAGE

79

"Altibodies™," "ARCALYST®," "Evkeeza®," "EYLEA®," "Inmazeb®," "Libtayo®," "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.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

REGENERON PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In millions, except per share data)

			March 31,						December 31,
			2023						2022
ASSETS
Current assets:
Cash and cash equivalents			$	3,916.3					$	3,105.9
Marketable securities			5,043.4						4,636.4
Accounts receivable, net			5,118.6						5,328.7
Inventories			2,424.7						2,401.9
Prepaid expenses and other current assets			406.2						411.2
Total current assets			16,909.2						15,884.1
Marketable securities			6,066.6						6,591.8
Property, plant, and equipment, net			3,880.9						3,763.0
Intangible assets, net			928.7						915.5
Deferred tax assets			1,924.9						1,723.7
Other noncurrent assets			349.6						336.4
Total assets			$	30,059.9					$	29,214.5
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable			$	599.5					$	589.2
Accrued expenses and other current liabilities			2,074.3						2,074.2
Deferred revenue			426.3						477.9
Total current liabilities			3,100.1						3,141.3
Long-term debt			1,981.8						1,981.4
Finance lease liabilities			720.0						720.0
Deferred revenue			85.5						69.8
Other noncurrent liabilities			677.3						638.0
Total liabilities			6,564.7						6,550.5
Stockholders' equity:
Preferred Stock, par value $.01 per share; 30.0 shares authorized; issued and outstanding - none			—						—
Class A Stock, convertible, par value $.001 per share; 40.0 shares authorized; shares issued and outstanding - 1.8 in 2023 and 2022			—						—
Common Stock, par value $.001 per share; 320.0 shares authorized; shares issued - 131.4 in 2023 and 130.4 in 2022			0.1						0.1
Additional paid-in capital			10,597.7						9,949.3
Retained earnings			24,124.5						23,306.7
Accumulated other comprehensive loss			(181.6)						(238.8)
Treasury Stock, at cost; 23.5 shares in 2023 and 22.6 shares in 2022			(11,045.5)						(10,353.3)
Total stockholders' equity			23,495.2						22,664.0
Total liabilities and stockholders' equity			$	30,059.9					$	29,214.5
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,
						2023						2022
Statements of Operations
Revenues:
Net product sales						$	1,668.0					$	1,638.6
Collaboration revenue						1,378.1						1,232.5
Other revenue						116.0						94.0
						3,162.1						2,965.1
Expenses:
Research and development						1,101.2						843.8
Acquired in-process research and development						56.1						28.1
Selling, general, and administrative						601.1						450.0
Cost of goods sold						208.4						207.3
Cost of collaboration and contract manufacturing						249.1						197.6
Other operating (income) expense, net						(0.5)						(20.2)
						2,215.4						1,706.6
Income from operations						946.7						1,258.5
Other income (expense):
Other (expense) income, net						(70.7)						(183.8)
Interest expense						(18.0)						(13.6)
						(88.7)						(197.4)
Income before income taxes						858.0						1,061.1
Income tax expense						40.2						87.6
Net income						$	817.8					$	973.5
Net income per share - basic						$	7.64					$	9.12
Net income per share - diluted						$	7.17					$	8.61
Weighted average shares outstanding - basic						107.1						106.8
Weighted average shares outstanding - diluted						114.0						113.1
Statements of Comprehensive Income
Net income						$	817.8					$	973.5
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on debt securities						57.2						(144.9)
Unrealized gain on cash flow hedges						—						1.0
Comprehensive income						$	875.0					$	829.6
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 Stock												Common Stock												Additional Paid-in Capital						Retained Earnings						Accumulated Other Comprehensive Income (Loss)						Treasury Stock												Total Stockholders' Equity
						Shares						Amount						Shares						Amount																								Shares						Amount
Balance, December 31, 2022						1.8						$	—					130.4						$	0.1					$	9,949.3					$	23,306.7					$	(238.8)					(22.6)						$	(10,353.3)					$	22,664.0
Issuance of Common Stock for equity awards granted under long-term incentive plans						—						—						1.1						—						491.3						—						—						—						—						491.3
Common Stock tendered upon exercise of stock options and vesting of restricted stock for employee tax obligations						—						—						(0.1)						—						(99.2)						—						—						—						—						(99.2)
Issuance/distribution of Common Stock for 401(k) Savings Plan						—						—						—						—						18.9						—						—						—						1.7						20.6
Repurchases of Common Stock						—						—						—						—						—						—						—						(0.9)						(693.9)						(693.9)
Stock-based compensation charges						—						—						—						—						237.4						—						—						—						—						237.4
Net income						—						—						—						—						—						817.8						—						—						—						817.8
Other comprehensive income, net of tax						—						—						—						—						—						—						57.2						—						—						57.2
Balance, March 31, 2023						1.8						$	—					131.4						$	0.1					$	10,597.7					$	24,124.5					$	(181.6)					(23.5)						$	(11,045.5)					$	23,495.2
Balance, December 31, 2021						1.8						$	—					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, 2022						1.8						$	—					127.6						$	0.1					$	8,754.1					$	19,941.8					$	(170.1)					(19.9)						$	(8,611.2)					$	19,914.7
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,
						2023						2022
Cash flows from operating activities:
Net income						$	817.8					$	973.5
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization						99.5						74.3
Stock-based compensation expense						238.7						166.9
Losses on marketable and other securities, net						166.6						204.5
Other non-cash items, net						20.6						84.3
Deferred income taxes						(216.5)						(225.0)
Changes in assets and liabilities:
Decrease in accounts receivable						210.1						1,197.5
Increase in inventories						(46.8)						(88.6)
Increase in prepaid expenses and other assets						(5.5)						(44.8)
(Decrease) increase in deferred revenue						(35.9)						9.5
Increase (decrease) in accounts payable, accrued expenses, and other liabilities						119.0						(250.4)
Total adjustments						549.8						1,128.2
Net cash provided by operating activities						1,367.6						2,101.7
Cash flows from investing activities:
Purchases of marketable and other securities						(1,749.4)						(2,309.8)
Sales or maturities of marketable and other securities						1,792.8						746.3
Capital expenditures						(178.2)						(141.8)
Payments for Libtayo intangible asset						(100.9)						—
Net cash used in investing activities						(235.7)						(1,705.3)
Cash flows from financing activities:
Proceeds from issuance of Common Stock						485.2						521.6
Payments in connection with Common Stock tendered for employee tax obligations						(97.0)						(98.8)
Repurchases of Common Stock						(710.7)						(358.1)
Net cash (used in) provided by financing activities						(322.5)						64.7
Net increase in cash, cash equivalents, and restricted cash						809.4						461.1
Cash, cash equivalents, and restricted cash at beginning of period						3,119.4						2,898.1
Cash, cash equivalents, and restricted cash at end of period						$	3,928.8					$	3,359.2
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, 2022 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, 2022.

Certain reclassifications have been made to prior period amounts to conform with the current period's presentation.

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2. Product Sales

Net product sales consist of the following:

									Three Months Ended March 31,
(In millions)									2023						2022
EYLEA®			U.S.						$	1,433.8					$	1,517.6
Libtayo®(a)			U.S.						109.7						78.9
			ROW(b)						67.2						—
Praluent®			U.S.						40.2						33.6
Evkeeza®			U.S.						14.9						8.5
Inmazeb®			U.S.						2.2						—
									$	1,668.0					$	1,638.6
(a) Prior to July 1, 2022, Regeneron recorded net product sales of Libtayo in the United States and Sanofi recorded net product sales of Libtayo outside the United States. Effective July 1, 2022, the Company records global net product sales of Libtayo. See Note 3 for further details.
(b) Rest of world ("ROW")

As of March 31, 2023 and December 31, 2022, the Company had $3.578 billion and $3.586 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, 2023 and 2022. 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,
						2023						2022
Besse Medical, a subsidiary of AmerisourceBergen Corporation						52		%				55		%
McKesson Corporation						25		%				30		%

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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 Classification						Three Months Ended March 31,
(In millions)												2023						2022
Antibody:
Regeneron's share of profits in connection with commercialization of antibodies						Collaboration revenue						$	636.5					$	415.3
Sales-based milestones earned						Collaboration revenue						$	—					$	50.0
Reimbursement for manufacturing of commercial supplies						Collaboration revenue						$	161.9					$	160.8
Regeneron's obligation for its share of Sanofi R&D expenses, net of reimbursement of R&D expenses						(R&D expense)/Reduction of R&D expense						$	(26.4)					$	26.8
Reimbursement of commercialization-related expenses						Reduction of SG&A expense						$	117.6					$	91.7
Immuno-oncology(a):
Regeneron's share of profits in connection with commercialization of Libtayo outside the United States						Collaboration revenue						$	—					$	2.8
Reimbursement for manufacturing of ex-U.S. commercial supplies						Collaboration revenue						$	—					$	2.0
Reimbursement of R&D expenses						Reduction of R&D expense						$	—					$	21.5
Reimbursement of commercialization-related expenses						Reduction of SG&A expense						$	—					$	19.0
Regeneron's obligation for its share of Sanofi commercial expenses						SG&A expense						$	—					$	(9.2)
Regeneron's obligation for Sanofi's share of Libtayo U.S. gross profits						Cost of goods sold						$	—					$	(32.3)
Amounts recognized in connection with up-front payments received						Other operating income						$	—					$	18.1
(a) As described within the "Immuno-Oncology" section below, effective July 1, 2022, the Company obtained the exclusive right to develop, commercialize, and manufacture Libtayo worldwide.

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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 (the "LCA"), Sanofi is generally responsible for funding 80% to 100% of agreed-upon development costs. The Company is obligated to reimburse Sanofi for 30% to 50% of worldwide development expenses that were funded by Sanofi based on the Company's share of collaboration profits from commercialization of collaboration products. Under the terms of the LCA, the Company was required to apply 10% of its share of the profits from the Antibody Collaboration in any calendar quarter to reimburse Sanofi for these development costs. On July 1, 2022, an amendment to the LCA became effective, pursuant to which the percentage of the Company's share of profits used to reimburse Sanofi for such development costs increased from 10% to 20%. A portion of the value associated with the increase in reimbursement percentage was deemed to be contingent consideration attributable to the Company's acquisition of the Libtayo (cemiplimab) rights described within the "Immuno-Oncology" section below; this portion will be recorded as an increase to the Libtayo intangible asset over time as the Company repays such development costs to Sanofi.

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. The Company is entitled to receive the final sales milestone payment of $50.0 million when such sales outside the United States exceed $3.0 billion on a rolling twelve-month basis.

The following table summarizes contract balances in connection with the Company's Antibody Collaboration with Sanofi:

						March 31,						December 31,
(In millions)						2023						2022
Accounts receivable, net						$	731.5					$	692.3
Deferred revenue						$	377.5					$	415.8

Immuno-Oncology

The Company was previously a party to a collaboration with Sanofi for 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 were co-developing and co-commercializing Libtayo. The parties shared equally, on an ongoing basis, development and commercialization expenses for Libtayo. The Company had principal control over the development of Libtayo and led commercialization activities in the United States, while Sanofi led commercialization activities outside of the United States. The parties shared equally in profits and losses in connection with the commercialization of Libtayo.

Effective July 1, 2022, the Company obtained the exclusive right to develop, commercialize, and manufacture Libtayo worldwide under an Amended and Restated Immuno-oncology License and Collaboration Agreement with Sanofi (the "A&R IO LCA"). In connection with the A&R IO LCA, in 2022, the Company made a $900.0 million up-front payment to Sanofi, as well as a $100.0 million regulatory milestone payment. In addition, Sanofi earned a $65.0 million sales-based milestone upon the achievement of a specified amount of worldwide net product sales of Libtayo in 2022 and is eligible to receive an additional $35.0 million sales-based milestone upon the achievement of a specified amount of worldwide net product sales of Libtayo in 2023 (aggregate of $100.0 million in sales-based milestones eligible to be earned under the terms of the A&R IO LCA). The Company also pays Sanofi an 11% royalty on net product sales of Libtayo through March 31, 2034. The transaction was accounted for as an asset acquisition and amounts paid to Sanofi in connection with obtaining the worldwide rights to Libtayo, including the up-front payment and any contingent consideration, are recorded as an intangible asset.

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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. Agreed-upon development expenses incurred by the Company and Bayer are generally shared equally. Bayer markets EYLEA outside the United States, and the companies share equally in profits and losses from such sales.

Amounts recognized in the Company's Statements of Operations in connection with its Bayer collaboration are as follows:

						Statement of Operations Classification						Three Months Ended March 31,
(In millions)												2023						2022
Regeneron's share of profits in connection with commercialization of EYLEA outside the United States						Collaboration revenue						$	331.6					$	338.4
Reimbursement for manufacturing of ex-U.S. commercial supplies						Collaboration revenue						$	25.3					$	25.0
One-time payment in connection with change in Japan arrangement						Collaboration revenue						$	—					$	21.9
Regeneron's obligation for its share of Bayer R&D expenses, net of reimbursement of R&D expenses						(R&D expense)/Reduction of R&D expense						$	(13.4)					$	0.3

The following table summarizes contract balances in connection with the Company's Bayer collaboration:

						March 31,						December 31,
(In millions)						2023						2022
Accounts receivable, net						$	356.8					$	348.2
Deferred revenue						$	134.3					$	131.9

c. Roche

The Company is a party to 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). Under the terms of the collaboration agreement, the parties jointly fund certain studies, and the Company has the right to distribute the product in the United States while Roche has the right to distribute 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.

Amounts recognized in the Company's Statements of Operations in connection with the Roche Collaboration Agreement are as follows:

						Statement of Operations Classification						Three Months Ended March 31,
(In millions)												2023						2022
Global gross profit payment from Roche in connection with sales of Ronapreve						Collaboration revenue						$	222.2					$	216.3

Reimbursement of research and development expenses from Roche was not material for the three months ended March 31, 2023 and 2022.

The following table summarizes contract balances in connection with the Roche Collaboration Agreement:

						March 31,						December 31,
(In millions)						2023						2022
Accounts receivable, net						$	220.6					$	396.6

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d. Sonoma Biotherapeutics, Inc.

In March 2023, the Company and Sonoma Biotherapeutics, Inc. entered into a license and collaboration agreement to bring together the Company's VelociSuite® technologies with Sonoma's technology platform for the discovery, development, and commercialization of novel regulatory T cell (Treg) therapies for autoimmune diseases. In connection with the agreement, the Company made a $45.0 million up-front payment (which was recorded to Acquired in-process research and development expense in the first quarter of 2023) and, in April 2023, the Company purchased an aggregate of $30.0 million of Sonoma preferred stock. Sonoma is also eligible to receive a $45.0 million development milestone payment. The Company and Sonoma will co-fund research and development activities and share equally any future commercial expenses and profits. The Company will have the option to lead late-stage development and commercialization on all products globally, with Sonoma retaining rights to co-promote all such products in the United States.

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)						2023						2022
Net income - basic and diluted						$	817.8					$	973.5
Weighted average shares - basic						107.1						106.8
Effect of dilutive securities:
Stock options						5.0						5.0
Restricted stock awards and restricted stock units						1.9						1.3
Weighted average shares - diluted						114.0						113.1
Net income per share - basic						$	7.64					$	9.12
Net income per share - diluted						$	7.17					$	8.61

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)						2023						2022
Stock options						1.7						2.2

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5. Marketable Securities

Marketable securities as of March 31, 2023 and December 31, 2022 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)						Amortized						Unrealized												Fair
As of March 31, 2023						Cost Basis						Gains						Losses						Value
Corporate bonds						$	6,819.1					$	4.8					$	(231.7)					$	6,592.2
U.S. government and government agency obligations						2,902.2						5.5						(4.3)						2,903.4
Sovereign bonds						72.6						0.1						(2.3)						70.4
Commercial paper						279.1						0.1						(0.1)						279.1
Certificates of deposit						153.9						—						(0.2)						153.7
Asset-backed securities						53.9						0.1						(1.5)						52.5
						$	10,280.8					$	10.6					$	(240.1)					$	10,051.3
As of December 31, 2022
Corporate bonds						$	6,975.5					$	—					$	(291.1)					$	6,684.4
U.S. government and government agency obligations						2,945.4						0.9						(6.9)						2,939.4
Sovereign bonds						67.1						—						(3.0)						64.1
Commercial paper						121.1						—						—						121.1
Certificates of deposit						182.1						—						(0.1)						182.0
Asset-backed securities						28.9						—						(1.7)						27.2
						$	10,320.1					$	0.9					$	(302.8)					$	10,018.2

The Company classifies its investments in available-for-sale debt securities based on their contractual maturity dates. The available-for-sale debt securities as of March 31, 2023 mature at various dates through August 2028. The fair values of available-for-sale debt securities by contractual maturity consist of the following:

						March 31,						December 31,
(In millions)						2023						2022
Maturities within one year						$	5,043.4					$	4,636.4
Maturities after one year through five years						4,996.6						5,381.4
Maturities after five years						11.3						0.4
						$	10,051.3					$	10,018.2

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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 Months												12 Months or Greater												Total
(In millions) As of March 31, 2023			Fair Value						Unrealized Loss						Fair Value						Unrealized Loss						Fair Value						Unrealized Loss
Corporate bonds			$	707.1					$	(8.1)					$	5,293.7					$	(223.6)					$	6,000.8					$	(231.7)
U.S. government and government agency obligations			228.1						(0.1)						79.2						(4.2)						307.3						(4.3)
Sovereign bonds			—						—						64.0						(2.3)						64.0						(2.3)
Commercial paper			212.6						(0.1)						—						—						212.6						(0.1)
Certificates of deposit			74.9						(0.1)						2.9						(0.1)						77.8						(0.2)
Asset-backed securities			—						—						24.7						(1.5)						24.7						(1.5)
			$	1,222.7					$	(8.4)					$	5,464.5					$	(231.7)					$	6,687.2					$	(240.1)
As of December 31, 2022
Corporate bonds			$	2,445.4					$	(73.1)					$	4,200.4					$	(218.0)					$	6,645.8					$	(291.1)
U.S. government and government agency obligations			785.2						(2.0)						71.0						(4.9)						856.2						(6.9)
Sovereign bonds			18.6						(1.1)						45.6						(1.9)						64.2						(3.0)
Certificates of deposit			40.2						(0.1)						—						—						40.2						(0.1)
Asset-backed securities			11.5						(0.6)						15.2						(1.1)						26.7						(1.7)
			$	3,300.9					$	(76.9)					$	4,332.2					$	(225.9)					$	7,633.1					$	(302.8)

The unrealized losses on corporate bonds as of March 31, 2023 were primarily driven by increases in interest rates. The Company has reviewed its portfolio of available-for-sale debt securities and determined that the decline in fair value below cost did not result from credit-related factors. In addition, the Company does not intend to sell, and it is not more likely than not that the Company will be required to sell, such securities before recovery of their amortized cost bases.

With respect to marketable securities, for the three months ended March 31, 2023 and 2022, 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.

For the three months ended March 31, 2023 and 2022, realized gains and losses on sales of marketable securities were not material.

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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, 2023			Fair Value						Level 1						Level 2
Cash equivalents			$	1,422.7					$	154.1					$	1,268.6
Available-for-sale debt securities:
Corporate bonds			6,592.2						—						6,592.2
U.S. government and government agency obligations			2,903.4						—						2,903.4
Sovereign bonds			70.4						—						70.4
Commercial paper			279.1						—						279.1
Certificates of deposit			153.7						—						153.7
Asset-backed securities			52.5						—						52.5
Equity securities (unrestricted)			20.7						20.7						—
Equity securities (restricted)			1,038.0						1,028.3						9.7
			$	12,532.7					$	1,203.1					$	11,329.6
As of December 31, 2022
Cash equivalents			$	1,662.8					$	88.3					$	1,574.5
Available-for-sale debt securities:
Corporate bonds			6,684.4						—						6,684.4
U.S. government and government agency obligations			2,939.4						—						2,939.4
Sovereign bonds			64.1						—						64.1
Commercial paper			121.1						—						121.1
Certificates of deposit			182.0						—						182.0
Asset-backed securities			27.2						—						27.2
Equity securities (unrestricted)			24.6						24.6						—
Equity securities (restricted)			1,185.4						1,185.4						—
			$	12,891.0					$	1,298.3					$	11,592.7

The Company held certain restricted equity securities as of March 31, 2023 which are subject to transfer restrictions that expire at various dates through 2024.

During the three months ended March 31, 2023 and 2022, we recorded $164.7 million and $211.2 million of net unrealized losses, respectively, on equity securities in Other (expense) income, net.

In addition to the investments summarized in the table above, as of both March 31, 2023 and December 31, 2022, the Company had $48.3 million in equity investments that do not have a readily determinable fair value. These investments are recorded within Other noncurrent assets.

The fair value of our long-term debt, which was determined based on Level 2 inputs, was estimated to be $1.516 billion and $1.443 billion as of March 31, 2023 and December 31, 2022, respectively.

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