Regeneron Pharmaceuticals, Inc. Q3 FY2025 earnings call

• Top line performance: Regeneron had solid third quarter with double-digit net sales growth for 3 leading products. Dupixent grew 26% and Libtayo 24% at constant exchange rates, while EYLEA HD in the U.S. grew 10%.
• EYLEA HD regulatory matters: Catalent Indiana's facility was classified as OAI, leading to an FDA complete response letter for EYLEA HD prefilled syringe BLA. Regeneron plans to submit an alternate prefilled syringe filler application by Jan 2026 and has submitted an application with an alternate vial filler for EYLEA HD BLA with a PDUFA date in late Dec.
• Pipeline progress: Significant R&D investments with positive Phase III data in several programs. Updates on Dupixent's potential label expansion, Libtayo's approval in adjuvant cutaneous squamous cell carcinoma, and progress in various other pipeline programs including allergy, oncology, C5 and complement inhibitor, anticoagulation, siRNA, and ultra-rare diseases.
• U.S. government discussions: Constructive discussions to lower drug costs for American patients while preserving innovation and U.S. biotech leadership.

Regeneron delivered a solid third quarter. Dupixent had worldwide net sales of $4.9 billion in the third quarter, growing 26% at constant exchange rates. Libtayo had global net product sales of $365 million, up 24% on a constant currency basis compared to the third quarter of last year, with U.S. net sales growing 12%. EYLEA HD in the U.S. had net product sales of $431 million, growing 10% compared to the third quarter of last year. Dupixent's global net sales contribution is significant, Libtayo contributes a notable amount, and EYLEA HD's U.S. sales are a key component of the segment performance.

• 2025: Financial guidance updated and narrowed ranges.
• 2026: Anticipates mid-teens percentage increase in R&D expense relative to 2025. Details on 2026 guidance for other line items to be provided early next year.

• Catalent facility issues: FDA classified Catalent Indiana's facility as OAI, leading to a complete response letter for EYLEA HD prefilled syringe BLA due to unresolved inspection findings.
• Competitive and regulatory uncertainties: Uncertainties related to product approvals, market competition, and regulatory reviews affecting commercialization of products.

Q: It seems like your team has retooled your commercial strategy on EYLEA, and it seems related to kind of price. What are you doing on a ground level when it comes to volume-based discounts that's allowing you to take share from Roche and Amgen? And are you seeing more price erosion on EYLEA? Or are we also seeing that discounting on high dose? And maybe just lastly, should we continue to see volume gains and revenue gains ahead of the label enhancement potentially midyear?

A: Leonard Schleifer and Marion McCourt responded, with Marion noting EYLEA HD's performance is related to its product and science, and Len mentioning they can't see significant upswing until label enhancements. Marion also mentioned EYLEA HD's sequential demand growth moderation and EYLEA's demand reduction.

Q: I guess for Chris or Len, on utilizing the balance sheet, you guys haven't historically done larger-scale BD, and it seems like that's going to be the case going forward. But in manufacturing, what's the appetite to further expand your plans that you've announced just so you own all elements of the -- of manufacturing. Obviously, that would be viewed pretty favorably by the Trump administration as well.

A: Leonard Schleifer responded, stating they have no allergy to large deals if right opportunity, and mentioned over $7 billion investment plan, with filling plant expected to come online during the coming year.

Q: Just maybe a question on EYLEA HD. Marion, I think I've heard you talk a lot about the importance of the labeling enhancements. And Len, I just heard your comment. about share and how important they are. But I think we've come to understand maybe the primary need here and the reason for these enhancements and why they're important is for certain clinics to have dosing flexibility so they can center their inventory around one drug. But just maybe, Marion, as you've seen this market evolve, can you talk about how that clinic inventory policies have evolved over time and especially how private equity in the space may be influencing this? Or is this really more of a -- as you're looking for share with clinics that don't necessarily have relatively aggressive inventory policies?

A: Marion McCourt responded, stating retina community and KOLs look for right product for patients, and EYLEA HD's characteristics like clinical efficacy, safety, and durability are important.

Q: George, you mentioned it sounds like likely you and Sanofi are going to do another Phase III trial here for IL-33 in COPD. Can you just talk about any new insights you might have learned that drove the differential outcome in the prior 2 Phase III trials? And then what you think you can change or optimize in a third trial here to improve the likelihood of success?

A: George Yancopoulos responded, stating due to competitive issues, he couldn't comment on most of the question and mentioned they'll have a meeting with FDA to decide strategy.

Q: Congratulations on the quarter. Can you elaborate on the probability of the late December decision on the RVO and every 4-week dosing filing with the new filler resulting in an approval? And just a quick follow-up would be, is this the same alternate filler that you used for the recent Libtayo adjuvant cutaneous squamous cell carcinoma approval?

A: Leonard Schleifer responded, discussing the timeline for the filler approval, mentioning different filler from Libtayo, and hoping for approval in December to rapidly resubmit if needed.

Q: Just on the pipeline front on the Factor XI antibody program. I don't want you to front run your roundtable, but I know you guys recently started a large Phase II study for the antibodies in Afib. So I'm just curious what you guys are looking for out of that study and maybe out of other Factor XIs in development to move into registrations in that and other large indications and really accelerate that program.

A: George Yancopoulos responded, discussing the Phase II study as a run-in to Phase III pivotal program, and looking at benefit-risk ratio for the 2 distinct antibodies.

Q: On the heels of your positive Phase III data for cemdisiran, I'm interested, can you outline how you see the commercial opportunity evolving for gMG and what your plans are in Europe with this asset?

A: Leonard Schleifer and George Yancopoulos responded, with George discussing the current therapies' limitations and Regeneron's program's convenience, efficacy, and safety advantages, and Marion mentioning launch readiness for the commercialization.

Q: My first ever question on the call. I just wanted to go back to your comments, George, on intravitreally delivered CD3. You're trying it initially in uveitis. I just wonder what the scope of your ambition was in that setting, given the role of T cell infiltration in glaucoma, which obviously be a much bigger indication. Any thoughts on where this could go would be much appreciated.

A: George Yancopoulos responded, discussing the CD3 antibody program's potential in uveitis and glaucoma, mentioning Regeneron's genetics center and plans for glaucoma program.

Q: On the upcoming Libtayo LAG-3 readout, it seems like the goal is to outperform Opdualag. But could you share your confidence in demonstrating a static benefit against KEYTRUDA? And as a follow-up, can you tell us a little bit more about the open-label Phase III trial you have ongoing against Opdualag? Is it just another show of confidence that your combo can be more potent than the currently approved option?

A: George Yancopoulos responded, discussing the study's design, powering for Opdualag-like activity and potential to outperform KEYTRUDA, and excitement about the program.

Q: Just a quick one on the launch of linvoseltamab. Just how is that progressing versus expectations? And can you just elaborate a bit on the time lines of when you could actually get this product into some of those earlier lines of therapy given the profile that seems to be shaping up here? Is that -- is there an ability to pull that forward or accelerate that all in terms of working with FDA, et cetera?

A: Marion McCourt and George Yancopoulos responded, with Marion discussing launch progress in the fifth-line setting and George discussing the potential for earlier line therapy based on data and aggressive programs in early stages.

Q: You spoke to novel targets here in I&I and ophthalmology. On the GA program, in particular, can you speak to what the FDA may be looking for in potential study designs, whether it's slowing GA lesion growth or vision improvements and whether you need to evaluate against current agents? And just remind us on the I&I side when we might hear about these novel targets.

A: George Yancopoulos responded, discussing the FDA's potential look for slowing GA lesion growth and vision improvements, and mentioning plans to hear about novel targets in I&I over the next couple of months