REGENERON PHARMACEUTICALS, INC. Q3 FY2026 earnings call

• Commercial Execution: All three core growth brands (Dupixent, ILEA-HD, and Liptio) set new all-time highs for quarterly net sales. Dupixent remains the leading biologic in eight of its nine FDA-approved indications in the U.S. Liptio is the leading immunotherapy in non-melanoma skin cancers and second most prescribed in NSCLC.
• Pipeline Advancements (Neuromuscular): An FDA decision for Simdisiran in generalized myasthenia gravis is expected in November. If approved, it would be the first siRNA therapy for this condition with convenient quarterly subcutaneous dosing.
• Pipeline Advancements (Metabolic): Data for the Side B siRNA program in MASH showed a ~70% reduction in liver fat in just 12 weeks from a single dose, driven by genetic validation. The program is advancing rapidly into registration-enabling studies.
• Pipeline Advancements (Cardiovascular/Rare Disease): Initial data for the POTS antibody showed sustained improvements in tachycardia and orthostatic symptoms after a single dose. A pivotal study is planned for next year pending regulatory feedback.
• Pipeline Advancements (Oncology): Ubimatumab, a bispecific antibody for ovarian cancer, demonstrated an approximate 70% objective response rate in heavily pretreated patients. A confirmatory Phase III trial is planned for mid-2027.
• Alliance Expansion: The alliance with Sanofi has been expanded to include four next-generation long-acting antibodies targeting type 2 inflammation pathways. Regeneron leads R&D while Sanofi leads commercialization. These candidates are fully human and non-engineered to avoid anti-drug antibody risks.
• Strategic Approach: Management emphasizes a disease-agnostic R&D approach leveraging VelocImmune, genetic centers, and siRNA platforms. They aim to launch products into specialties where they already have deep commercial relationships.

Total revenue increased 36% year-over-year to $5.1 billion. Non-GAAP diluted net income per share grew 70% to $20.07. Key product segments performed as follows:

• Dupixent (via Sanofi): Global net sales reached a record $6.5 billion, up 35% at constant currency. U.S. quarterly net sales exceeded $5 billion for the first time, growing 40%.
• ILEA-HD: U.S. net sales reached a new all-time high of approximately $700 million, up 62% from the prior year. It now represents nearly two-thirds of the U.S. retinal franchise.
• Liptio (Libtayo): Global net sales reached a record $550 million, up 51% in constant currency. U.S. net sales grew 81% to nearly $400 million. The drug is on an annual run rate of approximately $2.2 billion.
• Sanofi Collaboration Revenue: Reached an all-time high of $2.7 billion, including $2.6 billion from Regeneron’s share of collaboration profits, up 77% year-over-year.
• Alaris Royalties/Arculus Profits: Other revenues increased 57% to $310 million, including a one-time $60 million cumulative catch-up adjustment.

• 2026 Financial Guidance: Modest refinements were made to full-year 2026 guidance; details are in the press release.
• 2027 R&D Expense: Expected to increase by a mid-teens percentage compared with 2026 to support the advancement of multiple large registrational programs.
• 2027 Tax Rate: Expected to face approximately 100 to 200 basis points of upward pressure relative to 2026, consistent with long-term commentary.
• Inmazeb Revenue Impact: Due to a new barter agreement supplying doses to the U.S. government starting late 2027, no revenue is anticipated to be recorded for Inmazeb in the fourth quarter of 2026.
• Share Repurchases: Full-year share repurchases are expected to total approximately $3 billion, with $2.2 billion remaining under authorization as of September 30, 2026.

• Competition: Increasing competition in the retinal space from Flibercept 2 mg biosimilar launches may impact ILEA-HD momentum despite strong demand.
• Pricing Pressure: Ongoing pricing pressure is noted as a factor that may offset some sequential demand growth in the retinal franchise.
• Regulatory Uncertainty: Approval timelines for key pipeline assets (e.g., Simdisiran, Side B) depend on FDA decisions and regulatory feedback for pivotal studies.
• Commercial Execution Risks: Launching in new therapeutic areas (neurology, obesity) requires effective execution across diverse specialties, which management acknowledges as a challenge to maintain depth and quality.
• Forward-Looking Statement Risks: Standard risks associated with financial forecasts, development milestones, regulatory matters, payer coverage, and litigation as detailed in SEC filings.

Q: Analyst asked about the competitive landscape and differentiation for the Side B MASH program. / A: George Yancopoulos highlighted that Side B targets a genetically validated pathway central to liver protection, unlike competitors using different mechanisms. Early data showed unprecedented ~70% liver fat reduction in 12 weeks from a single dose, supported by human genetics. This genetic validation provides high confidence in reproducing clinical benefits, positioning it as a breakthrough therapy with no direct equivalent currently available.

Q: Analyst questioned if Regeneron will become more aggressive in business development given future revenue potential, and what stage of development is ideal for acquisitions. / A: CEO Leonard Schleifer stated the company is agnostic regarding acquisition stages but focuses on science and strategic fit rather than filling specific pipeline slots. He emphasized that Regeneron’s internal R&D engine is highly productive, often outperforming external opportunities. Therefore, they prioritize internal innovation unless external deals offer significant differentiation or platform advantages.

Q: Analyst asked if showing superior efficacy over Dupixent is necessary for next-gen antibodies to compete in atopic dermatitis, or if long-acting dosing alone suffices. / A: Len Schleifer noted that demonstrating superior efficacy is historically difficult and may not be required if dosing frequency improves. George Yancopoulos added that competitors use heavily engineered antibodies prone to anti-drug antibody issues, whereas Regeneron’s naturally derived, non-engineered antibodies offer better safety profiles. Marion McCourt reinforced that Dupixent’s established best-in-class efficacy and safety create a high bar, but the combination of long-acting convenience and proven safety gives Regeneron a strong commercial advantage.

Q: Analyst asked about the strategy for the four next-gen Sanofi alliance antibodies—whether they target different indications or serve as replacements for Dupixent. / A: CEO Leonard Schleifer declined to detail specific strategies in this format, stating there is a better venue to discuss such sensitive strategic plans with Sanofi. However, he confirmed the alliance is open to expanding based on mutual interests and that the goal is to build on the success of the IL-4/IL-13 pathways without explicitly defining replacement vs. expansion roles at this time.

Q: Analyst asked about patient switching expectations for the PNH program (Axis-1 data) against competitors like Solaris, noting the 'sticky' nature of the patient population. / A: CFO Chris Fenimore deferred to EVP Marion McCourt for commercial insights. McCourt acknowledged the compelling early clinical results but emphasized that definitive data differentiation is needed before predicting market behavior. She indicated that while the team is excited, they must wait for further clinical data to assess how effectively they can capture patients from existing therapies.