Regeneron Pharmaceuticals, Inc. (REGN) Earnings

Management highlights

Regeneron was pleased with its performance to start 2026, with strong commercial execution across key growth products, continued pipeline progress, disciplined capital allocation, and an agreement with the US government to lower drug prices. Global Dupixent net sales were strong with broad-based growth. ILEA-HD US net product sales grew significantly with encouraging physician adoption. Oncology net product sales grew strongly. Pipeline progress included FDA approval of Otarmine for genetic hearing loss, positive Phase III data for semdisoran, progress in metabolic disease, and multiple regulatory milestones in rare diseases. Capital allocation included a new $3 billion share repurchase program and strategic collaborations. In immunology and inflammation, Dupixent had new approvals and ongoing next-generation approach development. In oncology, various trials were ongoing. In anticoagulation, additional registrational studies were initiated. In obesity, positive phase two results were reported. In rare diseases, Otarmine was a significant approval and Garitosumab had a pending FDA decision.

Guidance

We updated our GAAP gross margin guidance to be in the range of 77% to 78% reflecting actual and expected costs from the manufacturing interruption. We expect Sanofi collaboration revenue to step up starting in the third quarter as the Sanofi development balance is expected to be fully repaid by the end of the second quarter. We anticipate a regulatory decision on one or both applications for ILEA-HD pre-filled syringe during this quarter. We expect to achieve sequential unit demand growth for ILEA HD in the second quarter consistent with the 10% sequential demand growth in the first quarter. We expect results from the Phase III study in PNH late in the fourth quarter of this year. We expect to initiate a first in human trial for our IL-13 antibody by the middle of this year. We expect to have results from our study in multiple myeloma patients that have received at least one prior line of therapy by early 2027 and MRD negativity results in 2028 from our study in first-line myeloma patients who are ineligible for stem cell transplant. Our first-line study for Otranexamab in first-line follicular lymphoma is fully enrolled. Initial registration studies from studies in venous thromboembolism prevention following knee replacement surgery are expected in the first quarter of 2027. We expect to initiate two global phase 3 programs for olotorapatide later this year.

Segment performance

Total revenues increased 19% compared to the first quarter of 2025. Global Dupixent net sales increased 31% on a constant currency basis to $4.9 billion. ILEA-HD US net product sales increased 52% year over year to 468 million. Global entire net product sales grew 54% to $438 million. First quarter 2026 total revenues grew 19% from the prior year to 3.6 billion, driven by higher Sanofi collaboration revenue, as well as strong growth in net sales of ILEA HD in the US and Libtyo globally. First quarter diluted net income per share grew 15% to $9.47 on net income of 1 billion. Non-GAAP gross margin on net product sales was 86% in the first quarter. Our GAAP gross margin was 76%, which was negatively impacted by costs incurred due to a temporary interruption in bulk manufacturing at our Limerick, Ireland site. Regeneron generated $848 million of free cash flow in the first quarter of 2026 and ended the quarter with cash and marketable securities less debt of $15.8 billion. We repurchased $800 million of our shares in the first quarter and announced a new $3 billion share repurchase program. We made some minor changes to our 2026 financial guidance, including updating our GAAP gross margin guidance to be in the range of 77% to 78%.

Risks & headwinds

Each forward-looking statement is subject to risks and uncertainties that could cause actual results and events to differ materially from those projected. 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. The temporary interruption in bulk manufacturing at our Limerick, Ireland site negatively impacted GAAP gross margin and is expected to continue to impact it in the second quarter. The FDA did not act by the April 2026 PDUFA date for the company's regulatory application for a second contract manufacturer for the PFS, so the application remains pending. There are risks associated with clinical trials not meeting expectations, regulatory approvals not being obtained as expected, competition in the market, and other uncertainties related to the development and commercialization of products.

Analyst Q&A

• Q: Tyler Van Buren with TD Cowan asked about Dupixent lifecycle expansion and Santa Fe collaboration.

  A: Len said they are open-minded to transactions, leveraging development and commercial capabilities, and look forward to working with Sanofi's new CEO.

• Q: Terrence Flynn with Morgan Stanley asked about Phenlymeb in metastatic melanoma.

  A: George said it depends on the results and the study is designed to see both PFS and OS benefits.

• Q: Chris Raymond with Raymond James asked about ILEA pre-filled syringe.

  A: Len said they await action on the applications and expect a decision on one or both during the quarter.

• Q: Corey Kasimoff with Evercore ISI asked about linazific in multiple myeloma.

  A: George said bispecifics have promising profiles with decreasing infectious risk over time.

• Q: Bank of America asked about NextGen Ducey.

  A: Len said they have a robust pipeline with many opportunities and don't focus on simple replacement.

• Q: Carter Gould with Cantor asked about co-injection of C5 with Flibercept.

  A: George said it could have convenience, label expansion, and better safety profile benefits.

• Q: Evan Siegerman with BMO Capital Markets asked about clinical strategy for next-gen INI assets.

  A: George said they are well positioned to expedite development.

• Q: Salveen Richter with Goldman Sachs asked about Dupixent lifecycle strategy.

  A: George said they have the knowledge and capabilities to optimize.

• Q: Christopher Schott with JP Morgan asked about LIBTIO performance.

  A: Mary said LIBTIO performance was strong with drivers including new indication and clinical profile.

• Q: David Risinger with Lering Partners asked about pipeline candidates.

  A: Len said there are many potential blockbusters in various programs.

• Q: Jeff Meacham with Citi asked about Fianlumab and lung.

  A: Len said they didn't see it as a game changer in lung cancer and no negative read-through on tolerability.

• Q: Brian Abrams with RBC Capital Markets asked about long-acting IL-13 study.

  A: George said there's unmet need in milder patients and potential to broaden the market.