Regeneron Pharmaceuticals Q4 2024 Earnings Call Transcript

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Provided by Quartr
February 4, 2025
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Operator

Hello, and welcome to Regeneron Pharmaceuticals 4th Quarter 2024 Earnings Conference Call. My name is Towanda, and I will be your operator for today's call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. Please note that this conference is being recorded.

Operator

I will now turn the call over to Ryan Crow, Senior Vice President, Investor Relations. You may begin.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Thank you, Towanda. Good morning, good afternoon and good evening to everyone listening around the world. Thank you for your interest in Regeneron and welcome to our Q4 2024 earnings conference call. An archive and transcript of this call will be available on the Regeneron Investor Relations website shortly after the call ends. Joining me on today's call are Doctor.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Leonard Schleifer, Board Co Chair, Co Founder, President and Chief Executive Officer Doctor. George Yancopoulos, Board Co Chair, Co Founder, President and Chief Scientific Officer Marion McCourt, Executive Vice President of Commercial and Chris Fenimore, Executive Vice President and Chief Financial Officer. After our prepared remarks, the remaining time will be available for your questions. I would like to remind you that remarks made on today's call may include forward looking statements about Regeneron. Such statements may include, but are not limited to, those related to Regeneron and its products and business, financial forecasting guidance, development programs and related anticipated milestones, collaborations, finances, regulatory matters, payer coverage and reimbursement, intellectual property, pending litigation and other proceedings and competition.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Each forward looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected in that statement. A more complete description of these and other material risks can be found in Regeneron's filings with the United States Securities and Exchange Commission, including its Form 10 ks for the year ended December 31, 2024, which we expect to file with the SEC tomorrow, February 5. Regeneron does not undertake any obligation to update any forward looking statements, whether as a result of new information, future events or otherwise. In addition, please note that GAAP and non GAAP financial measures will be discussed on today's call. Information regarding our use of non GAAP financial measures and a reconciliation of those measures to GAAP is available in our quarterly results press release and our corporate presentation, both of which can be accessed on the Regeneron Investor Relations website.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Once our call concludes, Chris and the IR team will be available to answer any further questions. With that, let me turn the call over to our President and Chief Executive Officer, Doctor. Leonard Schleifer. Leonard?

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

Thank you, Ryan, and thank you to everyone for joining today's call. Regeneron CAP 2024 with a strong 4th quarter highlighted by 10% revenue growth, reflecting the strength and durability of our key franchises, primarily Dupixent, Libtayo and EYLEA HD. 2024 was also a year in which we made significant investments across our broad pipeline, which yielded notable progress across several key programs. For my remarks today, I will review some of our key performance drivers, then briefly discuss a few of our more differentiated pipeline opportunities and close with a few comments on capital allocation. After my remarks, George will provide further updates on our pipeline.

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

Marin will then review our commercial performance. And finally, Chris will detail our financial results for the Q4 of 2024 and our guidance for the current year. To start, I would like to share my perspective on the current state of Regeneron. From the beginning, our focus has been on science and innovation, developing cutting edge technology platforms that repeatedly yield scientific breakthroughs. These efforts have led to 13 products that have been approved or authorized worldwide, several of which are driving revenue growth and hold significant future potential.

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

Our approach has already delivered 5 blockbuster drugs, a leading pipeline of approximately 40 product candidates across various therapeutic areas and a world class DNA sequence linked healthcare database, providing us with unparalleled insights into key drivers of disease. At the JPMorgan conference last month, we detailed 10 differentiated mid and late pipeline opportunities that could collectively address a total market opportunity of over $220,000,000,000 Given these opportunities, the strength of our early stage pipeline and our turnkey technology platforms, we have never been more confident in Regeneron's future and we are incredibly excited about what lies ahead. Moving to our quarterly results. Dupixent continues to be a transformative medicine with over 1,000,000 patients on treatment around the world across 7 approved indications. In the U.

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

S, Dupixent remains the leader in new to brand prescription share across all of its approved indications and continues to be well positioned for future growth given the potential for further penetration in approved indications, the ongoing launch in COPD and potential 2025 launches in chronic spontaneous urticaria and bullous pimplargoid. Regarding the ongoing launch in COPD, where Dupixent is the 1st and only biologic approved, we and our partner Sanofi have made great progress securing broad payer coverage and reimbursement, positioning us to drive uptake over the course of this year and beyond. EYLEA HD and EYLEA continue to lead the anti veg of category and our commercial efforts remain focused on driving EYLEA HD uptake, while preserving share for EYLEA in an increasingly competitive category. Over the course of this year, we expect continued competitive pressure on EYLEA while strengthening the profile of EYLEA HD by offering it in a more convenient prefilled syringe administration, broadening its label to include macular edema following retinal vein occlusion or RVO and adding more dosing flexibility, including every 4 week dosing as well as extended dosing intervals of up to every 24 weeks for certain indications. With these anticipated label enhancements, EYLEA HD will offer the broader set of retinal disease indications with the greatest dose and flexibility of any product in the NMEDGEV category, positioning it to become the new standard of care in the category.

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

And we anticipate these enhancements will lead to acceleration in EYLEA HD uptake starting in the second half of this year. Leptina became Regeneron's latest blockbuster product in 2024 and we are looking to build on that by expanding shared metastatic non melanoma skin cancers along with making further inroads in lung cancer. We also plan to seek regulatory approval for high risk adjuvant cutaneous squamous cell carcinoma in setting in which KEYTRUDA failed and over the longer term could represent a blockbuster opportunity globally in and of itself. Moving to our pipeline and focusing on the upcoming year, we expect regulatory approvals for limbocetimab in relapsedrefractory multiple myeloma, ogenestimab in late lung follicular lymphoma and the aforementioned Libtayo indication in adjuvant CSCC. In addition, we expect to read out pivotal or proof of concept data this year from several other programs, including our pivotal ARIFY studies for idepicamab, our IO-thirty three antibody in former smokers with COPD.

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

Pivotal data for the fialumab Libtayo combination in first line metastatic melanoma are also anticipated in 2024. We also expect pivotal data for our C5 antibody siRNA combination in generalized myasthenia graviton. Finally, we expect to learn more about our potential opportunity to improve the quality of weight loss in obese patients on semaglutide by blocking myostatin in active NA. George will soon discuss these programs in more detail and provide updates on many of the other programs in our broad and differentiated pipeline. Finally, regarding capital allocation, this morning we were pleased to announce the initiation of a quarterly cash dividend program and an additional $3,000,000,000 share repurchase authorization, increasing our total current buyback capacity to approximately $4,500,000,000 These decisions reflect our Board and management's ongoing commitment to returning capital to shareholders, but this does not change the core of our capital allocation framework.

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

Importantly, our dividend will not impact the way we plan to heavily invest in our business and pipeline going forward, does not impair our ability to do business development in the future and we anticipate that share repurchases will remain the primary means of returning capital to shareholders. However, initiating the dividend reflects our continued confidence in the future cash flows from our business, provides more balance to our approach to capital returns, gives us flexibility in how we return capital in the future and expands the pool of potential Regeneron shareholders to include funds with a dividend mandate. In closing, Regeneron remains in a very strong position scientifically, commercially and financially, enabling us to invest heavily in R and D and deliver tremendous innovation from our pipeline, maximize the growth opportunities from our in line brands, initiate a quarterly dividend and significantly increase our capacity to repurchase shares. We look forward to keeping you updated in these innovations throughout 2025 beyond. With that, I'll now turn the call over to George.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

Thank you, Len. At last month's JPMorgan Healthcare Conference, we showcased our robust R and D efforts and the promising opportunities within our pipeline that have the potential to revolutionize the practice of medicine across several different disease areas. This year holds the potential to be transformative for Regeneron as we hope to capitalize on several of our scientific and technological breakthroughs. We anticipate reporting pivotal or proof of concept data from multiple programs across diverse therapeutic areas, including in oncology, COPD and obesity, while also rapidly advancing our Factor XI antibodies to multiple Phase III trials. These programs represent significant opportunities for Regeneron to address substantial unmet needs across large commercial categories, positioning Regeneron for long term growth.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

Let me highlight some of these opportunities and recent pipeline advancements. Starting with EYLEA HD, In December, we and Bayer reported positive data from the Phase 3 QUASAR study in retinal vein occlusion, where EYLEA HD demonstrated non inferior vision gains within every 8 week dosing regimen compared to the standard of care 2 milligram EYLEA dosed every 4 weeks. Additionally, approximately 90% of EYLEA HD patients were able to maintain 8 week dosing intervals throughout the 36 weeks. These data together with our recently presented long term follow-up data from the PULSAR and PHOTON studies in wet AMD and DME respectively continue to support EYLEA HD's best in class clinical profile. We remain on track to submit a supplementary BLA for this indication later in Q1.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

We also plan to seek approval from the FDA to potentially include every 4 week dosing, maximizing EYLEA HD's dosing flexibility for physicians. Along with the submission for a prefilled syringe and the potential FDA approval in April to extend dosing intervals to up to 24 weeks, the longest intervals in the category, EYLEA HD is set to provide the greatest dosing flexibility across the broadest indication set of any anti VEGF therapy all in a convenient prefilled syringe. Next immunology and starting with DUPIXENT. In November, DUPIXENT was approved in Europe to treat eosinophilic esophagitis in children as young as 1 year old, making it the 1st and only medicine indicated for these young patients in the U. S.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

And the European Union and further highlighting Dupixent's exceptional safety profile. The supplementary BLA resubmission for chronic spontaneous urticaria was recently accepted by the FDA with a target action date of April 18, potentially making it the 1st new target therapy for CSU in a decade. Finally, our supplementary BLA was submitted for bulluspendicoid late last year, marking another first as Dupixent is the only biologic to achieve significant improvements in disease remission and symptoms for this indication. While Mary will discuss the ongoing launch of Dupixent in COPD, I want to remind you of another potentially significant opportunity in COPD with idepikumab, our interleukin-thirty three antibody discovered by Regeneron. We anticipate reporting pivotal results in former smokers from the ARFI program in the second half of this year, a partially overlapping and distinct population from that treated with Dupixent.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

As part of our long term commitment to improving the lives of patients with allergic conditions, I would also like to highlight the compelling initial data from our ongoing Dupixent plus limvosertimab trial for severe food allergy. These two agents have the potential to eliminate immunoglobulin E or IgE, the key driver allergic reactions and prevent IgE from returning, thereby reversing severe allergies. Last month, we shared initial clinical data from the first patient in our proof of concept study, which showed greater than 90% reductions in both total and food specific IgE levels following initial treatments at low doses. This trial is continuing to enroll patients and we plan to provide updates throughout 2025. Turning now to oncology, where we continue to break new ground.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

Last month, we announced positive data for Libtayo in high risk adjuvant CSCC, becoming the 1st immunotherapy to show a benefit in this high risk population. At the 1st pre specified interim analysis for disease free survival, adjuvant Libtayo demonstrated 68% reduction in the risk of disease recurrence or death compared to placebo with no new safety signals identified. This is the same setting in which Merck reported last year that KEYTRUDA had failed highlighting that antibodies even within the same class do not always produce the same treatment effect. We plan to submit these data to the FDA in the first half of twenty twenty five and present these results at a medical meeting later this year. This data set reinforces our belief that Libtayo provides a best in class foundation for combinations with our other oncology assets.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

Data from early clinical trials in melanoma suggests that cienlumab, our LAG-three antibody, when combined with Libtayo, might be first combination to demonstrate meaningful additive benefit compared to PD-one monotherapy without exacerbating safety. This combination is being studied in an ongoing randomized Phase 3 trial versus KEYTRUDA monotherapy in first line metastatic melanoma with results expected in the second half of this year. If these data confirm best in class activity in melanoma, it will increase our confidence for this combination in other cancer settings. Turning to our CD3 bispecifics. We are pleased to announce that we have recently resubmitted the BLA for limvacelitimab, our BCMAxCD3 bispecific for relapsed refractory multiple myeloma following the resolution of third party manufacturing issues.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

Limvoseltamab has the potential to be the best in class BCMA by CD3 bispecific due to its differentiated clinical profile dosing and administration with nearly double the reported complete response rates at similar duration of follow-up. Given the strength of the data in late lines of therapy, including the observed level of efficacy and favorable safety profile of viloboseltumab, we are pursuing a differentiated approach in earlier lines of therapy, emphasizing monotherapy and novel limited combination approaches. For otranexamab, our CD20xCD3 bispecific, we are pleased to announce that we have resubmitted the BLA for relapsedrefractory follicular lymphoma, where odraneximab has also demonstrated potentially best in class efficacy and we expect an FDA decision in the second half of twenty twenty five. In December at the American Society of Hematology meeting, we presented initial results from the safety lead in portion of the confirmatory Phase 3 OLYMPIA trial. Ogenximab monotherapy delivered complete responses in all 12 patients evaluable for efficacy with previously untreated follicular lymphoma.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

As a reminder, the standard of care regimen in this setting rituximab plus chemotherapy has historically achieved complete responses in approximately 67% of patients. Based on this impressive monotherapy efficacy for otranexamab in both late line and first line patients, we are once again exploring a differentiated program in early lines of therapy, highlighted by our head to head evaluation of ojraneximab monotherapy compared to rituxan plus chemotherapy in our Phase 3 OLYMPIA-one trial, which has already achieved over 40% enrollment. Our CD28 co stimulatory bispecifics for solid tumors are also progressing. We're working to mitigate safety concerns related to their combination with PD-one blockade, while prioritizing combination with CD3 bispecifics. The science suggests that this approach may enhance efficacy with fewer immune mediated adverse events.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

We will provide updates on these innovative combinations later this year. Moving now to a rapidly advancing Factor XI program. We're employing a 2 pronged approach to anticoagulation that offers a potential for improved blood clot prevention and lower bleeding risk. Supported by genetic data from the Regeneron Genetics Center, our approach has delivered 2 antibodies with unique profile to meet different market needs. Regeneron 708 which targets the catalytic domain of Factor XI may provide improved efficacy compared to standard of care options, offering patients who need significant anticoagulation activity a potentially more effective option.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

On the other hand, REGEN-nine thousand nine hundred and thirty three which targets the A2 domain is expected to carry a lower risk of bleeding, potentially making it a viable option for patients with the highest bleeding risk who would otherwise not be candidates for currently available anticoagulants. Late this year, we reported positive proof of concept data for the prevention of venous thromboembolism following total knee replacement with both antibodies demonstrating robust antithrombotic effects. Regeneron 7,508 was superior to enoxaparin and non inferior opixaban, while REGEN-nine thousand nine hundred and thirty three was numerically better than enoxaparin. These data support the advancement of both antibodies into broad pivotal programs across multiple indications and patient types, with initial Phase 3 studies expected to begin enrolling this year. Moving briefly to obesity, where we are progressing early clinical programs in an expansive pipeline of preclinical assets.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

Our muscle sparing Phase 2 COURAGE study is investigating the addition of terivagrumab to semaglutide with and without garatizumab to improve the quality of weight loss and evaluate the maintenance of weight loss after discontinuing semaglutide. This trial is fully enrolled with data expected in the second half of the year. Moving to our Regeneron Genetics Medicine pipeline, starting with our differentiated siRNA plus antibody approach, we have the potential to address multiple complement mediated diseases. In December at the ASH Annual Meeting, we presented compelling updated results from an exploratory cohort in our Phase 3 program for paroxysmal maternal hemoglobinuria. Our combination achieved greater disease control compared to the standard current of care, revolizumab and only our combination lowered mean LDH levels to the normal range.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

When revolizumab patients were switched to our combination, their mean LDH levels, which remained higher than normal, also became normalized. We are also evaluating this combination in generalized myasthenia gravis with pivotal results expected in the second half of this year. In addition, we recently initiated our Phase 3 program exploring this combination in geographic atrophy in dry age related macular degeneration, where we believe our systemic approach has several advantages over currently approved intravitreal agents. For DB oto, our otoferlin gene therapy program for genetic hearing loss, We announced data last month from the ongoing clinical program. GB auto is an AAV based dual vector gene therapy delivered to the inner ear to enable hearing in children suffering from profound genetic hearing deficit.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

We reported that 10 out of 11 treated children with at least 1 post treatment assessment showed a notable increase in hearing with some reaching the normal range. We look forward to continue to share additional data later this year. Regarding our collaboration with Alnylam, we are advancing several new siRNA CNS programs including synuclein for Parkinson's and tau for Alzheimer's and other neurodegenerative diseases with trials initiating later this year. And finally, I would like to highlight 2 recent advances that extend our leadership position in the field of structured big data that will be necessary to allow computational approaches to revolutionize the healthcare industry. Over the past decade, we have become the leader in high throughput human DNA sequencing, enabling us to create the world's largest DNA sequence linked healthcare database encompassing nearly 3,000,000 individuals, all with DNA sequence linked to de identified healthcare records.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

We are now emerging also as the leaders in high throughput proteomics as reflected by the selection of the Regeneron Genetics Centre to generate the proteomics data for the U. K. Biobank Pharma Proteomics project, building on our previous selection to provide the sequence data for the U. K. Biobank.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

Importantly, our new strategic collaboration with Truveta is expected to dramatically expand our database to include up to an additional 10,000,000 individuals from Truveta's network of leading U. S. Health system with the opportunity to generate both DNA sequence and proteomics information. While our leadership position in this big data space has already proven invaluable for our drug discovery and development efforts, we believe it can ultimately help us contribute to revolutionizing the field of healthcare analytics and management. In summary, I have never been more excited about the future of Regeneron and our potential to transform the practice of medicine and revolutionize the healthcare industry.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

Our pipeline is more innovative and exciting than ever and we anticipate several pivotal or proof of concept data readouts throughout 2025 positioning Regeneron for long term success. Let me now turn the call over to Marian.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

Thank you, George. Regeneron's 4th quarter performance demonstrates our ongoing leadership across therapeutic categories. Our commercial team is well positioned to optimize our 2025 growth opportunities, driven by new indications, new product enhancements and new product approvals. Turning to Q4 results, starting with EYLEA HD and EYLEA. In January, we announced combined 4th quarter U.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

S. Net sales of $1,500,000,000 for EYLEA HD and EYLEA, capturing over 46% of the total anti vegiv category. For the full year, net product sales grew by 1.4 percent to 4 percent to approximately $6,000,000,000 despite increasing competition in the category. EYLEA HD net sales were $305,000,000 in the 4th quarter and $1,200,000,000 for the full year, representing 20% of the combined net sales for Eylea HD and Eylea. 4th quarter net sales for Eylea HD were affected by elevated wholesaler inventory levels at the end of Q3, which were absorbed over the course of the Q4.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

In 2025, our team is laser focused on growing Eylea HD adoption. Physicians tell us that Eylea HD has the potential to be the new standard of care for retinal diseases and several catalysts occurring this year will put us in a position to grow our competitive share. The team is ready to launch the prefilled syringe and our 2 year label updates, both of which are anticipated to occur in the Q2. Physicians eagerly await the prefilled syringe, which has been described as game changing by clinical trial participants. Further, our 2 year long term follow-up data from the PULSAR and PHOTON studies in wet AMD and DME, respectively, clearly illustrate EYLEA HD's ability to extend dosing beyond any other competitor in the anti VEGF category.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

2 other potential FDA approvals are also expected later this year, the RVO indication and additional dosing flexibility. In RVO clinical trials, Eylea HD dosing could be extended to every 12 weeks following loading doses, making it the only medicine with durability beyond 4 weeks and also the only medicine to show a numeric improvement in vision for RVO patients compared to EYLEA dosed every 4 weeks. In terms of additional dosing flexibility across all of our approved indications, we look forward to the potential FDA approval of every 4 week dosing for the subset of patients who need it, which would mean EYLEA HD has the most flexible dosing schedule of any anti VEGF medicine. 4th quarter EYLEA net sales were $1,200,000,000 primarily driven by persistent physician demand in spite of a recent offlibercept 2 milligram biosimilar launch. Wholesale inventory levels were elevated at the end of the 4th quarter and we expect EYLEA net sales will be negatively impacted in the Q1 of 2025 as this increase in inventory is absorbed.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

We also expect ongoing market dynamics will put downward pressure on EYLEA business. We continue supporting existing and new patients who benefit from EYLEA, while prioritizing uptake of EYLEA HD, which has the clinical profile to potentially become the new standard of care in the anti VEGF category. Turning now to Libtayo, which achieved blockbuster status in 2024 with global net sales of $1,200,000,000 In the Q4, global net sales grew by 50% year over year to $367,000,000 with U. S. Net sales reaching 2.51,000,000 Libtayo's strong performance was based on growth in non melanoma skin cancers and steady gains in lung cancer.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

Looking forward, we eagerly await the submission and potential approval of Libtayo in high risk adjuvant CSCC. Beginning in the U. S, where we estimate there are approximately 10,000 patients who may benefit from treatment. And next to Dupixent, which continues to deliver exceptional results in type 2 inflammatory diseases, approved in 7 indications worldwide, more than 1,000,000 patients are currently benefiting from Dupixent treatment. 3 of these indications, atopic dermatitis, asthma and nasal polyps have achieved blockbuster status, each generating over $1,000,000,000 in annual net sales.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

In the Q4, DUPIXENT Worldwide net sales grew 15% year over year to $3,700,000,000 with increasing volume across all indications, age groups and geographies. In the U. S, net sales grew 10% year over year to $2,700,000,000 driven by a 24% increase in total prescriptions, including the recent COPD launch. As Sanofi noted, 4th quarter results were negatively impacted by onetime items. We continue to see broad growth across all blockbuster indications of atopic dermatitis, asthma and nasal polyps.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

Despite new entrants in atopic dermatitis, Dupixent continues to be first choice for physicians who now understand that IL-four and IL-thirteen are crucial drivers of Type 2 inflammation. Additionally, there is robust uptake in our recent U. S. Launches for acyenophilic esophagitis, paragumodularis with current trends suggesting that these indications will likely also achieve blockbuster status. We are off to a promising start in COPD following approvals in more than 30 countries.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

In the U. S, the FDA approved Dupixent in September of last year and we are very encouraged by our progress in early market adoption. Together with our partner Sanofi, we've made significant strides in securing U. S. Access and reimbursement for commercial and Medicare patients.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

At the start of this year, nearly 85% of commercial patients and nearly 90% of Medicare patients have coverage. Additionally, we are pleased that global gold treatment guidelines for COPD now include Dupixent as the only recommended biologic medicine for these patients. We look forward to accelerating the launch of this important indication and to make a significant difference in the lives of 100 of 1000 of COPD patients worldwide. Our teams are also preparing for a potential April launch in chronic spontaneous urticaria pending FDA approval. We believe Dupixent offers a compelling treatment option and if approved would be the 1st new targeted therapy in the U.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

S. In over a decade for the estimated 300,000 CSU patients. In conclusion, we continue to deliver solid performance across our commercial portfolio in the Q4. We also see significant growth opportunities in 2025 and beyond with near and medium term catalysts to drive growth. With that, I'll turn the call to Chris.

Christopher Fenimore
Christopher Fenimore
Senior VP of Finance & CFO at Regeneron Pharmaceuticals

Thank you, Marion. My comments today on Regeneron's financial results and outlook will be on a non GAAP basis unless otherwise noted. Regeneron ended 2024 with strong financial performance in the 4th quarter, delivering growth on both the top and bottom line. Total revenues grew 10% year over year to $3,800,000,000 primarily reflecting higher Sanofi collaboration revenue driven by Dupixent growth, strong global net sales growth for Libtayo and modest growth for combined net sales of EYLEA HD and EYLEA in the U. S.

Christopher Fenimore
Christopher Fenimore
Senior VP of Finance & CFO at Regeneron Pharmaceuticals

4th quarter diluted net income per share was $12.07 on net income of $1,400,000,000 up 2% from the prior year. On a full year basis, total revenues were $14,200,000,000 representing growth of 10% when excluding revenues from RonaPreve. 20.24 earnings per share grew 4% from the prior year to $45.62 Turning to collaboration revenue in the 4th quarter, revenues from the Sanofi collaboration were $1,200,000,000 of which $1,000,000,000 related to our share of collaboration profits. Regeneron share of profits grew 18% versus the prior year, driven by volume growth through Dupixent and higher collaboration margins. For the year, our share of profit, net of development balance reimbursement, increased to the highest level since initiation of the collaboration reaching approximately 20% of total antibody net sales.

Christopher Fenimore
Christopher Fenimore
Senior VP of Finance & CFO at Regeneron Pharmaceuticals

The Sanofi development balance was approximately $1,600,000,000 at the end of 2024, reflecting a reduction of approximately $175,000,000 from the end of the 3rd quarter and approximately $700,000,000 from the end of 2023. We continue to expect this balance to be fully reimbursed by the end of 2026, which is expected to result in a significant increase in Sanofi collaboration revenue and cash flow thereafter. Moving to Bayer. 4th quarter ex U. S.

Christopher Fenimore
Christopher Fenimore
Senior VP of Finance & CFO at Regeneron Pharmaceuticals

Net sales of EYLEA and EYLEA 8 mg were $888,000,000 up 2 percent on a constant currency basis versus the prior year. Total buyer collaboration revenue was $377,000,000 of which $349,000,000 related to our share of net profits outside the U. S. Now to our operating expenses. R and D expense was $1,200,000,000 in the 4th quarter.

Christopher Fenimore
Christopher Fenimore
Senior VP of Finance & CFO at Regeneron Pharmaceuticals

The increase in R and D expense versus the prior year was driven by cost to support advancement of Regeneron's broad clinical pipeline, including our C5 and Factor 11 programs in hematology, certain oncology programs, inapacumab in COPD and our ongoing program in obesity. 4th quarter SG and A was 681,000,000 with growth from the prior year primarily reflecting investments to support the launch of EYLEA HD and our international expansion. 4th quarter 2024 gross margin and net product sales was 86%, up slightly from the prior year quarter. Now to cash flow and the balance sheet. Regeneron generated approximately $3,700,000,000 in free cash flow in 2024 and ended the year with cash and marketable securities less debt of approximately $15,200,000,000 In 2024, we deployed $2,600,000,000 towards share repurchases, including a meaningful step up in the 4th quarter, during which we repurchased nearly $1,000,000,000 of our shares.

Christopher Fenimore
Christopher Fenimore
Senior VP of Finance & CFO at Regeneron Pharmaceuticals

Consistent with our capital allocation framework, we are investing heavily in our R and D capabilities to drive long term growth, exploring business development opportunities and returning capital to shareholders. This morning, we announced an additional share repurchase authorization of 3,000,000,000 dollars increasing our capacity for repurchases to approximately $4,500,000,000 as of today. In addition, we are enhancing our approach to returning capital to shareholders. As announced this morning, our Board of Directors has authorized the initiation of a quarterly dividend with the first dividend payable on March 20 to shareholders of record as of February 20. The dividend will be $0.88 per share, equivalent to $3.52 per share on an annual basis.

Christopher Fenimore
Christopher Fenimore
Senior VP of Finance & CFO at Regeneron Pharmaceuticals

We are confident in the long term growth of our business, our innovative R and D engine, our differentiated pipeline and the durability of our cash flows, all of which support the initiation of our 1st quarterly dividend and the announcement of an additional share repurchase authorization. I'll conclude with a review of our 2025 financial guidance. We expect 2025 R and D spend to be in the range of $5,000,000,000 to $5,200,000,000 The increase versus 2024 is driven by cost to support our expanding late stage pipeline, including Phase III programs for our Factor XI antibodies and HemOnc bispecifics, as well as programs in obesity and genetic medicines and the advancement of multiple new assets into the clinic. We expect 2025 SG and A to be in the range $2,550,000,000 to $2,700,000,000 representing 3% growth at the midpoint of this range versus 2024, driven by investments to support multiple potential oncology launches. We expect our gross margin on net product sales to be in the range of 87% to 88 percent.

Christopher Fenimore
Christopher Fenimore
Senior VP of Finance & CFO at Regeneron Pharmaceuticals

This guidance reflects a changing product mix as well as ongoing start up costs for our new fill finish facility and investments to drive future efficiencies across our manufacturing network. We expect cost of collaboration manufacturing to be in the range of $1,000,000,000 to $1,150,000,000 in 2025, primarily driven by higher Dupixent volumes. Recall that we are reimbursed for these costs as revenue, making them generally neutral to net income. We expect 2025 capital expenditures to be in the range of $850,000,000 to $975,000,000 primarily related to ongoing expansion of the R and D facilities at our Tarrytown headquarters and investments to increase bulk manufacturing capacity in the U. S.

Christopher Fenimore
Christopher Fenimore
Senior VP of Finance & CFO at Regeneron Pharmaceuticals

And Ireland to support our expanding pipeline. Finally, we expect our 2025 effective tax rate to be in the range of 11% to 13%. In summary, Regeneron delivered solid financial results in 2024 and our strong financial position and prudent capital allocation enables Regeneron to deliver long term shareholder value. With that, I'll pass the call back to Ryan.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Thanks, Chris. This concludes our prepared remarks. We'll now open the call for Q and A. To ensure we are able to address as many questions as possible, we will answer only one question from each caller before moving to the next. Towanda, can we go to the first question, please?

Operator

Thank you. Please stand by for our first question. Our first question comes from the line of Brian Abrahams. Your line is open.

Brian Abrahams
Brian Abrahams
MD & Global Sector Head - Health Care Research at RBC Capital Markets

Hey guys, good morning. Thanks for taking my question. Consensus numbers suggest expectations for annual sales erosion of about 7% annually over the next few years for the EYLEA franchise. Just given what you've been seeing on the ground and some of the dynamics you described, including competitive pressure, but a potential acceleration in HD with some of those approvals, do you think that these expectations look reasonable? And I know you guys don't typically provide guidance, but I just I think any directionality might be helpful here just to understand whether folks are looking at dynamics here the right way or if expectations may be way off?

Brian Abrahams
Brian Abrahams
MD & Global Sector Head - Health Care Research at RBC Capital Markets

Thanks.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

So as you pointed out, we don't give guidance. I wanted to give you a summary today of how we see the market. And certainly, as it relates to EYLEA HD and the strengthening of the profile that we hope with additional FDA approvals this year related to delivery system with the prefilled syringe, indication with RVO, dosing flexibility and then also the clinical data that further cements EYLEA HD as the product with the greatest durability. We believe that combination of factors for EYLEA HD and the fact that already in our year this past year in the market, EYLEA HD at $1,200,000,000 in net sales is a blockbuster product. We see that as a very compelling profile.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

But I did want to be very realistic and my comments indicated we do expect to see additional competitive pressure on EYLEA. Obviously, there's a biosimilar in the market today. So that is a factor that needs to be considered as well. But overall, we certainly believe we have a very strong position. I also noted today that our category share in the Q4 was at 46%.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

So obviously, we have a very strong position in the marketplace.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Thank you. Next question please.

Operator

Thank you. Our next question comes from the line of Tyler Van Buren with TD Cowen. Your line is open.

Tyler Van Buren
Managing Director, Senior Biotech Equity Research Analyst at TD Cowen

Hey guys, Good morning. Thank you very much for taking the question. So the dividend initiation is an exciting disclosure and earlier than some might have expected. So I'm curious why you guys decided to institute the dividend now as opposed to when the Sanofi development was paid off by the end of next year and whether you plan to increase it from these levels over time?

Christopher Fenimore
Christopher Fenimore
Senior VP of Finance & CFO at Regeneron Pharmaceuticals

Thanks, Tyler. Thanks for the question. So obviously, we publicly were talking about initiating it at the end of the repayment of the Santa Fe Development balance. I think for a variety of reasons, we have a lot of confidence as we reiterated on the call today that that would be paid down. It's also obviously a differentiation in our capital allocation strategy to sort of migrate a little bit away from share buybacks, although as Len indicated in his remarks, that'll be the primary purpose of returning capital to our shareholders, but allowing us a little more flexibility of starting the dividend.

Christopher Fenimore
Christopher Fenimore
Senior VP of Finance & CFO at Regeneron Pharmaceuticals

And it also opens up a larger base of shareholders. So there are a lot of funds out there that have a dividend mandate and this will give them the opportunity to invest in Regeneron that they wouldn't have otherwise in the past been able to do.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Thanks, Chris. Next question, please.

Operator

Our next question comes from the line of Cory Kasimov with Evercore.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

Please go ahead.

Cory Kasimov
Senior Managing Director at Evercore

Hey, good morning, guys. I wanted to ask on the adjuvant CSCC Libtayo readout that you top lined in January. How critical is it that the product also hits an overall survival in addition to the DFSU top lined? And can you kind of comment as to how you see this, the opportunity here from a commercial perspective relative to the indications you already have? Thank you.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

Well, because these patients are relatively earlier stages of their disease, they tend to have long survival times from their initial surgeries and so forth. So there are very few survival events. That said, of course, the FDA will be looking at the data to make sure that at least numerically things are not going in surprising or wrong directions. But we have confidence that the package is going to look pretty attractive.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

And then just adding on the commercial perspective, as I noted, we obviously have a very capable and talented oncology Libtayo team, U. S. And in key international markets. But for the U. S, we estimate there'd be about 10,000 patients who may benefit from the adjuvant CSCC indication.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Thanks, George and Marion. Next question please, Towanda.

Operator

Our next question comes from the line of Salveen Richter with Goldman Sachs.

Salveen Richter
Salveen Richter
Biotechnolgy Equity Research at Goldman Sachs

Good morning. Thanks for taking my question. Could you just speak to the magnitude of inventory impact on EYLEA HD that played out last quarter and also the dynamics that are happening in the marketplace with PAVBLU, the biosimilar?

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

So Salveen, as we had noted last quarter, there had been a build in EYLEA HD inventory, and that obviously impacted 4th quarter for EYLEA HD burning off that inventory. As to the specific numbers, the range of impact in total would have been in the range of if we looked at the combined IV HD and EYLEA net product sales for the Q4, a favorable impact was predominantly to EYLEA and that was about $85,000,000 And that was the result of higher wholesale inventory levels for EYLEA, partially offset by lower wholesale inventory levels for EYLEA HD.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Do you want to comment on the PAV blue impact?

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

Well, it's Glenn. It's really difficult to comment on PAV blue. I will know one thing that very recently we had some victories at the Federal Circuit Court of Appeals, which thus far is leading to the conclusion that there's only one competitor of biosimilar. If that holds, that really changes the dynamic quite a bit in terms of pricing and things like that. So having one competitor is quite different than having multiple competitors.

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

So I encourage you to look at some of the recent wins we had at the Federal Circuit on the injunctions against other players. In terms of what's actually going in the market, I think maybe you'll be on Amgen's call this afternoon, maybe they can give you a more direct answer.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Thank you. Next question, please.

Operator

Our next question comes from the line of Chris Schott with JPMorgan.

Taylor Hanley
Taylor Hanley
Biotech Equity Research Analyst at JP Morgan

Hi, this is Taylor Hanley on for Chris Schott. I just had a question on how you're thinking about operating expenses going forward. So with numerous programs advancing to late stage development, how are you thinking about balancing investments across the pipeline? And do you think that there would be the potential to partner any of these programs? Or should we think about Regeneron keeping everything in house going forward?

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

So I think it's important to note that our primary allocation of our capital is to our research and development efforts. We're in the midst of doing a little interesting exercise that if you compare our investment to other companies and you take into account equity investments and other upfronts and milestones that are essentially buying research and development, I think the data is going to show that we have an incredibly productive dollar for dollar, pound for pound R and D capabilities in the industry. In terms of whether or not we would partner, I think we have always been that is a financial partner perhaps or even a strategic partner on some program. We've always kept an open mind to see what is the best for the program and how can we best allocate our resources. So we don't manage the business in any fixed allocation way.

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

We don't say we're going to spend X percent. We look at what's worth spending our money on. We look at what the potential ways to fund our programs are and we try and make decisions that way rather than having some allocation quotas or the like. That flexibility I think has served us well and it will continue to serve us well given that we have more than 40 programs in the clinic and many, many more heading towards the clinic.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Okay. Thank you. Next question please, Towanda.

Operator

Our next question comes from the line of Christopher Raymond with Piper Sandler.

Analyst

Hey, this is Sam on for Chris. Thanks for taking our question. On EYLEA, we noticed you had a modest price increase, which is the first time we've seen that for EYLEA. Meanwhile, we've seen Roche have more regular price increases for RAVISMA since they launched. Any comments on your pricing strategy for EYLEA going forward?

Analyst

Is the goal to stabilize average sale price over time? Thank you.

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

No comment.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

Okay. I was going to say no comment. I'll add, you mentioned a price increase for EYLEA. There was also a modest price increase for EYLEA HD.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Okay. Next question please.

Operator

Our next question comes from the line of Mohit Bansal with Wells Fargo.

Mohit Bansal
Mohit Bansal
Analyst at Wells Fargo

Hey, thank you very much for taking my question. Maybe imagine, just wanted to get a little bit more color on how you are thinking about the cadence of HYLEA HD for the year because it seems like you're saying that you expect incremental conversion when prefilled syringe and label expansion comes in. Could you help us understand, I mean, is it like is it going to be more incremental or do you think there is an inflection especially due to pre fill season given the market acceptability of that formulation? Thank you.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

Mohit, I don't have additional comment at this time. I wanted to give the overall balance that we see obviously opportunity for Eylea HD to continue to grow. As you know, the market is probably about 10% naive patients, 90% switch patients going over to EYLEA HD. And among those patients that are switching, the source of business is often coming from EYLEA, second, furosemab and third, Avastin. And as to the overall market dynamics, I don't have additional comments.

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

Yes. I mean, I don't encourage you obviously to look beyond the hyper focus on EYLEA. We have Dupixent launching away in COPD. We have pivotal data coming up within opacamab in COPD. We have first line melanoma, metastatic melanoma data coming up.

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

2nd part of this year, we've got data in myasthenia gravis coming up. We're starting a trial in geographic atrophy. And I could go on and on and on. And I would encourage you to work through those because our strategy is not to be solely dependent on any one thing yet still optimize every single thing. So we will do everything we can to optimize each of our programs HD and so forth, but we don't want to become dependent on any one thing, which is why we're so excited about the pipeline.

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

So I would say it's the pipeline. Next question.

Operator

Our next question comes from the line of Tim Anderson with Bank of America.

Alice Nettleton
Alice Nettleton
VP - US Pharmaceutical & Biotechnology Equity Research at Bank of America

Hi, this is Alice Nettleton on for Tim Anderson. Thanks for taking our question. Sorry, another one on EYLEA.

Leonard Schleifer
Leonard Schleifer
Board Co-Chair, Co-Founder, President and Chief Executive Officer at Regeneron Pharmaceuticals

Why don't we come back to that question at the end, so we can get some non EYLEA questions in. We'll put you at the end of the queue and we'll come back to you. Next question, please. Sure.

Operator

One moment. Our next question comes from the line of Akash Tewari with Jefferies.

Akash Tewari
Akash Tewari
Managing Director at Jefferies

Hi, I'm not going to ask an EYLEA question. George, I'd love your take on Factor XI. We've seen both asymptexan and some of the private mAb players show issues in preventing extreme ischemic stroke events with the mAb also showing an inverse dose response on bleed prevention. That said, Regeneron is the only company that showed an incremental benefit in a total knee replacement study versus Eliquis. So can you talk about your confidence on 5,708 and some of the recent data sets in the space?

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

Yes. Our strategy from the beginning was take advantage of our understanding from the genetics to design and select 2 antibodies that have very complementary but different profiles can address different patients and allow physicians and patients to choose the best antibody for their needs. So our antibody that the 7508 that you mentioned that hits the cataract domain in side by side comparisons is biochemically the strongest blocker and has the strongest anticoagulant activity of anything in this class. And that would be designed for the patients who need the most anticoagulant control. And as you said, it performed very impressively in the initial proof of concept studies with regard to that functionality.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

The 9,933, which affects the A2 domain is designed to be slightly gentler. And the genetics suggest it may have very little, if any bleeding risk, but perhaps a little bit less anticoagulation activity. So that's designed to give alternatives or options for the patients and the physicians who are most concerned in that setting about bleeding risk. So we think this is a very powerful optionality and flexibility to be able to offer both physicians and patients who struggle between solving the dilemma about how do I control anticoagulation without causing bleeding and all of those concerns that go with that. And this way we'll have data and we'll have comparative data in multiple settings to allow the physician and the patient to hopefully choose the best approach for their situation.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

And we think that certainly the patients, the settings are really crying out for this sort of optionality and flexibility. This is why so many patients in so many indications, not only in atrial fibrillation, but across the entire spectrum of diseases in which thrombi and clots are a problem are left untreated or not maximally treated. So we're hoping to address that huge unmet need by evaluating and getting data on these 2 genetically validated approaches.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Thanks, George. Next question please.

Operator

Our next question comes from the line of William Pickering with Bernstein.

William Pickering
Analyst at Bernstein

Hi, thank you for taking my question. It's about your complement programs. So it seems like your antibody siRNA combo has potential to deliver really leading efficacy, but on safety you've seen some grade 5AEs so far. Can you discuss how you see these combos fitting into the MG and GA treatment landscapes? And for GA specifically, anything about the design of the Phase 3 trial that would kind of minimize some of those safety events that you've seen so far?

William Pickering
Analyst at Bernstein

Thank you.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

Yes. So first of all, the safety events are consistent with what's been seen with the class in general. Right now, we don't really have evidence to suggest that it's different than the other approaches visavisafety. In terms of efficacy, it's an incremental benefit that is able to drive many more of the patients into the normal range. So the current drugs can achieve in some patients as deep complement inhibition as we're seeing, but they don't do it for all the patients.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

We're doing it for a much higher percentage of patients. So we're not really lowering complement to much lower levels. We're just driving more of the patients to the levels that are already being achieved. This is consistent with the safety profiles being analogous to what's already been seen with the class. But very importantly, it's the uncontrolled patients, which are causing the problems, whether it be in PNH or perhaps some of these other complement immediate diseases who are being sub optimally treated, which we hope we now have a solution for.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

For those patients, roughly 30% of the populations, even with the best standard of care who are left sub optimally treated. That said, complement inhibition for an elderly or older AMD patient is certainly a concern with any approach. And as you said, we are doing a variety of things that are somewhat standard for the class to try to choose, 1st of all, enroll patients who are not as high risk to make sure, for example, they're vaccinated against the organisms of risk and, of course, monitoring them closely. But we have to balance that of course with the concerns and the safety events that have been happening with the intravitreal approaches. I mean these are designed to slow down slowly progressing vision threatening events yet the safety event can cause catastrophic immediate vision loss in patients.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

So that's a little bit of a dilemma. Do you take a prevention that can make you immediately blind to slow down your eventual blindness? We're hoping to offer another option for these patients that might not risk their vision. But as you said, we'll have to balance the safety infectious types of events, which as I said are a class specific type of problem.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Thanks, George. I think we have time for 2 more questions. Towanda?

Operator

Our next question comes from the line of Dave Risinger with Leerink Partners. Your line is open.

David Risinger
Senior Managing Director & Senior Research Analyst at Leerink Partners

Yes, thanks very much. So my question is on obesity. George, could you please discuss the need to combine myostatin with an ActuVIN blocker to treat obesity and optimize body composition? I ask because I'm curious about whether if the ActiVend doesn't have the right benefit risk profile, whether you could develop a myostatin as a standalone or not? Thanks very much.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

Yes. You pretty much summarized exactly our strategy based on our previous data in humans, including in sarcopenic individuals. The combination can grow more muscle. However, we do have some concerns with the active NA blockade. The GDFA blockade now based on both genetics and what we've seen looks to be exceedingly safe in terms of all the early data.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

We don't have as much data with the active NA and so we're left with more concerns. So we're testing the combination, but we can fall back on just single approaches, which might have a little bit less efficacy in terms of muscle preservation, but might be safer. So that's why we're exploring these individually, but also together. So to understand the best benefit risk profile. I want to remind you that for example at Lilly, they're trying a receptor blocker that not only blocks these two growth factors, but more than a dozen other related growth factors.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

So that may yield good efficacy, but the concerns there is not only you're blocking the milestone and the active NA, but it does in other factors as well. What are the potential side effects you'll see here? That's why we like our program that we can actually target the 2 most important factors as we've shown pre clinically and clinically for muscle preservation, while also trying them individually. So that way we'll have once again the most flexibility as a lot of our programs are designed to dissect and separate individual agents in various processes to understand best the benefit risk profile where you might trade efficacy for safety and vice versa.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Thanks, George. I don't see Bank of America in the queue. So we'll just go to the next question in the queue as our final question.

Operator

Our final question comes from the line of Terence Flynn with Morgan Stanley.

Chun Yu
Chun Yu
Analyst at Morgan Stanley

Thank you. This is Chris on for Terence. Just a question on your LAG-three plus PD-one combo in non small cell lung cancer program. What is the efficacy bar on the duration response or PFS that you need to see for you to advance that into a pivotal program? Thank you.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

Yes. As we've seen from the small data set with our friends at Bristol in terms of their combination, those datasets are very small and they're hard to really make convincing conclusions on. That's why we are more focused on our melanoma data. If the melanoma data really deliver the sort of efficacy profile, safety and efficacy profile that we've seen in our proof of concept studies when we read out the Phase 3, I think that's going to generate enormous excitement both for the potential to really help first line melanoma patients, but also to extend this combination to a variety of other cancer settings including potentially lung cancer. So I think that the bigger data set in the Phase 3 study is going to provide the most insight and the most potential confidence as opposed to the smaller Phase 2s and proof of concept studies, which obviously can generate excitement, but they're not really definitive as we've seen from our own data, but also from our friends that who have other related programs going on.

George Yancopoulos
George Yancopoulos
Board Co-Chair, Co-Founder, President and Chief Scientific Officer at Regeneron Pharmaceuticals

So I really point to the pivotal melanoma data. If that really emerges as the new standard of care in melanoma, it's going to I think it's going to provide a lot of interest and excitement in other cancer settings as well.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

I see Bank of America is back in the queue. So we will take our final question from them as

Operator

promised. Our next question comes from the line of Tim Anderson with Bank of America.

Alice Nettleton
Alice Nettleton
VP - US Pharmaceutical & Biotechnology Equity Research at Bank of America

Hi, thank you. This is Alice on for Tim. So back to my question on EYLEA. We talked to one big purchaser of EYLEA recently who said that Regeneron essentially hasn't sweetened the contract terms on standard dose in an effort to compete with Amgen's product yet. So can we infer from this that you are likely to hold the ground on price and pricing concessions with the goal being that doctors will start using high dose more once the label and product enhancements come through?

Alice Nettleton
Alice Nettleton
VP - US Pharmaceutical & Biotechnology Equity Research at Bank of America

Thank you.

Marion McCourt
Marion McCourt
Executive Vice President of Commercial at Regeneron Pharmaceuticals

Alice, thank you for your patience. We don't comment on pricing strategy, but I certainly will compliment our very talented market access and pricing team, but no comment.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

With that, we will conclude the call. Thank you, and thanks to everyone who dialed in for today's call. We apologize to those remaining in the Q and A queue. We did not have enough time to hear from you, but we're always happy to follow-up. We're available to answer any remaining questions you may have.

Ryan Crowe
Ryan Crowe
Senior Vice President of Investor Relations & Strategic Analysis at Regeneron Pharmaceuticals

Thank you. Once again, have a great day.

Operator

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.

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Regeneron Pharmaceuticals Q4 2024
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