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United States securities and exchange commission logo
May 8, 2024
Christopher Fenimore
Chief Financial Officer
Regeneron Pharmaceuticals, Inc.
777 Old Saw Mill River Road
Tarrytown, New York 10591-6707
Re: Regeneron
Pharmaceuticals, Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2023
Filed February 5,
2024
File No. 000-19034
Dear Christopher Fenimore:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments.
Please respond to this letter within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe a
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to this letter, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2023
Item 1. Business
Products, page 3
1. Please address the
following as it relates to your presentation of net product sales of
Regeneron-discovered
products on page 5:
Explain the
purpose of this disclosure and its usefulness to investors.
Disclose more
prominently that not all of the net product sales presented on page 5
are recognized as
revenue in your Statements of Operations.
For those net
product sales recorded by a collaboration partner and for which you
record your share
of profits in connection with the collaboration, quantify the
amounts recorded
and specify where such amounts are recorded on your Statements
of Operations
(i.e., collaboration revenue).
Provide
cross-references to your revenue disclosure for each collaboration in MD&A.
Christopher Fenimore
FirstName
Regeneron LastNameChristopher
Pharmaceuticals, Inc. Fenimore
Comapany
May 8, 2024NameRegeneron Pharmaceuticals, Inc.
May 8,
Page 2 2024 Page 2
FirstName LastName
Notes to the Consolidated Financial Statements
3. Collaboration, License and Other Agreements
a. Sanofi, page F-17
2. We note your disclosure on page 89 that under your collaboration
agreements with Bayer
and Sanofi, you have contingent contractual obligations to reimburse
Bayer and Sanofi for
a defined percentage of agreed-upon development expenses funded by
Bayer and Sanofi
(i.e., "development balance") if the applicable collaboration is
profitable. You also
disclose that these reimbursements are deducted each quarter, in
accordance with a
formula, from your share of the collaboration profits otherwise
payable to you. Please
address the following specifically as it relates to your contingent
reimbursement
obligation under the Sanofi Antibody License and Collaboration
Agreement ("LCA"):
Describe and quantify the contractual terms governing your
contingent
reimbursement obligation under the LCA and the methods and key
assumptions used
to determine the associated $2.33 billion contingent obligation
as of December 31,
2023.
Clarify why the $2.33 billion contingent repayment obligation
does not appear to be
recorded as a liability on your balance sheet. In particular,
explain your basis for
deeming the obligation to be contingent given the likelihood of
continued profits
under the Antibody LCA.
Clarify your basis for reporting certain reimbursements of
Sanofi development
expenses as R&D expense, while reporting other such
reimbursements as a reduction
of collaboration profits. For example, if true, confirm that the
$83.7 million in R&D
expenses classified as "Regeneron's obligation for its share of
Sanofi R&D expenses,
net of reimbursement of R&D expenses" on page F-17 represents
your share of
current period R&D expenses incurred by Sanofi based on the
original expense
sharing percentage in the LCA, while the $459.8 million reported
on page 80 as
"Reimbursement of development expenses incurred by Sanofi in
accordance with
Regeneron's payment obligation" represents reimbursements of
amounts due under
your contingent repayment obligation which relates to cumulative
development costs.
Clarify your disclosure on page F-17 that a portion of the
value associated with the
increase in reimbursement percentage (from 10% to 20%) was deemed
to be
contingent consideration attributable to your acquisition of the
Libtayo (cemiplimab)
rights under the IO LCA, which will be recorded as an increase to
the Libtayo
intangible asset over time as you repay such development costs to
Sanofi. Cite the
relevant accounting guidance supporting this accounting
treatment.
Revise your disclosure accordingly.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
Christopher Fenimore
Regeneron Pharmaceuticals, Inc.
May 8, 2024
Page 3
Please contact Franklin Wyman at 202-551-3660 or Angela Connell at
202-551-3426
with any questions.
FirstName LastNameChristopher Fenimore Sincerely,
Comapany NameRegeneron Pharmaceuticals, Inc.
Division of Corporation
Finance
May 8, 2024 Page 3 Office of Life Sciences
FirstName LastName