UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
 
 
ý
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2019
 
 
OR
 
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from __________ to __________
  
Commission File Number: 0-19034
 
REGENERON PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
New York
 
13-3444607
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)
 
 
 
777 Old Saw Mill River Road, Tarrytown, New York
 
10591-6707
(Address of principal executive offices)
 
(Zip Code)
(914) 847-7000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
ý
No
¨
 
 
 
 
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
ý
No
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
ý
 
Accelerated filer
¨
 
Non-accelerated filer
¨
 
Smaller reporting company
¨
 
Emerging growth company
¨
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
¨
 
 
 
 
 
 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes
¨
No
ý

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Common Stock - par value $.001 per share
REGN
NASDAQ Global Select Market


The number of shares outstanding of each of the registrant’s classes of common stock as of April 17, 2019:
Class of Common Stock
 
Number of Shares
Class A Stock, $.001 par value
 
1,911,354
Common Stock, $.001 par value
 
107,727,418




REGENERON PHARMACEUTICALS, INC.
QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS

 
 
 
 
Page Numbers
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 









"ARCALYST®", "EYLEA®", "Libtayo®" (in the United States), "Regeneron®", "Regeneron Genetics Center®", "Veloci-BiTM", "VelociGene®", "VelociMab®", "VelocImmune®", "VelociMouse®", "VelociSuite®", and "ZALTRAP®" are trademarks of Regeneron Pharmaceuticals, Inc. Trademarks and trade names of other companies appearing in this report are, to the knowledge of Regeneron Pharmaceuticals, Inc., the property of their respective owners.


Table of Contents


PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except share data)
 
March 31,
 
December 31,
 
2019
 
2018
ASSETS
Current assets:
 
 
 
Cash and cash equivalents
$
1,708.5

 
$
1,467.7

Marketable securities
1,523.9

 
1,342.2

Accounts receivable - trade, net
1,728.4

 
1,723.7

Accounts receivable from Sanofi
287.6

 
226.4

Accounts receivable from Bayer
289.2

 
293.1

Inventories
1,208.8

 
1,151.2

Prepaid expenses and other current assets
182.2

 
243.3

Total current assets
6,928.6

 
6,447.6

 
 
 
 
Marketable securities
2,339.8

 
1,755.0

Property, plant, and equipment, net
2,612.8

 
2,575.8

Deferred tax assets
829.3

 
828.7

Other noncurrent assets
144.3

 
127.4

Total assets
$
12,854.8

 
$
11,734.5

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
 
 
 
Accounts payable
$
239.6

 
$
218.2

Accrued expenses and other current liabilities
741.1

 
772.1

Deferred revenue from Sanofi
334.1

 
246.7

Deferred revenue - other
196.6

 
205.8

Total current liabilities
1,511.4

 
1,442.8

 
 
 
 
Finance lease liabilities
709.9

 
708.5

Deferred revenue from Sanofi
633.7

 
279.3

Deferred revenue - other
178.8

 
184.9

Other noncurrent liabilities
376.3

 
361.7

Total liabilities
3,410.1

 
2,977.2

 
 
 
 
Stockholders' equity:
 
 
 
Preferred Stock, $.01 par value; 30,000,000 shares authorized; issued and outstanding - none

 

Class A Stock, convertible, $.001 par value; 40,000,000 shares authorized; shares issued and outstanding - 1,911,354 in 2019 and 2018

 

Common Stock, $.001 par value; 320,000,000 shares authorized; shares issued - 111,718,248 in 2019 and 111,084,951 in 2018
0.1

 
0.1

Additional paid-in capital
4,160.9

 
3,911.6

Retained earnings
5,725.1

 
5,254.3

Accumulated other comprehensive income (loss)
2.8

 
(12.3
)
Treasury Stock, at cost; 4,046,627 shares in 2019 and 3,990,021 shares in 2018
(444.2
)
 
(396.4
)
Total stockholders' equity
9,444.7

 
8,757.3

Total liabilities and stockholders' equity
$
12,854.8

 
$
11,734.5

 
 
 
 
The accompanying notes are an integral part of the financial statements.

2


Table of Contents


REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
(In millions, except per share data)
 
 
Three Months Ended
March 31,
 
 
2019
 
2018
Statements of Operations
 
 
 
 
Revenues:
 
 
 
 
Net product sales
 
$
1,104.4

 
$
987.9

Sanofi collaboration revenue
 
246.4

 
189.5

Bayer collaboration revenue
 
276.2

 
247.9

Other revenue
 
84.8

 
86.2

 
 
1,711.8

 
1,511.5

 
 
 
 
 
Expenses:
 
 
 
 
Research and development
 
641.8

 
498.6

Selling, general, and administrative
 
410.8

 
330.8

Cost of goods sold
 
70.9

 
69.2

Cost of collaboration and contract manufacturing
 
108.3

 
45.7

 
 
1,231.8

 
944.3

 
 
 
 
 
Income from operations
 
480.0

 
567.2

 
 
 
 
 
Other income (expense):
 
 
 
 
Other income (expense), net
 
73.8

 
24.6

Interest expense
 
(7.7
)
 
(6.4
)
 
 
66.1

 
18.2

 
 
 
 
 
Income before income taxes
 
546.1

 
585.4

 
 
 
 
 
Income tax expense
 
(85.0
)
 
(107.4
)
 
 
 
 
 
Net income
 
$
461.1

 
$
478.0

 
 
 
 
 
Net income per share - basic
 
$
4.23

 
$
4.44

Net income per share - diluted
 
$
3.99

 
$
4.16

 
 
 
 
 
Weighted average shares outstanding - basic
 
108.9

 
107.6

Weighted average shares outstanding - diluted
 
115.5

 
114.9

 
 
 
 
 
Statements of Comprehensive Income
 
 
 
 
Net income
 
$
461.1

 
$
478.0

Other comprehensive income (loss), net of tax:
 
 
 
 
Unrealized gain (loss) on debt securities
 
16.1

 
(11.1
)
Unrealized (loss) gain on cash flow hedges
 
(1.0
)
 
1.4

Comprehensive income
 
$
476.2

 
$
468.3

 
 
 
 
 
The accompanying notes are an integral part of the financial statements.


3


Table of Contents


REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)
(In millions)
 
 
Class A Stock
 
Common Stock
 
Additional Paid-in Capital
 
Retained Earnings
 
Accumulated Other Comprehensive Income (Loss)
 
Treasury Stock
 
Total Stockholders' Equity
 
 
Shares
 
Amount
 
Shares
 
Amount
 
 
 
 
Shares
 
Amount
 
Balance, December 31, 2018
 
1.9

 

 
111.1

 
$
0.1

 
$
3,911.6

 
$
5,254.3

 
$
(12.3
)
 
(4.0
)
 
$
(396.4
)
 
$
8,757.3

Issuance of Common Stock in connection with exercise of stock options
 

 

 
0.6

 

 
140.9

 

 

 

 

 
140.9

Common Stock tendered upon exercise of stock options and vesting of restricted stock in connection with employee tax obligations
 

 

 

 

 
(10.7
)
 

 

 

 

 
(10.7
)
Issuance of Common Stock in connection with Company 401(k) Savings Plan
 

 

 

 

 
4.3

 

 

 
0.1

 
6.2

 
10.5

Repurchases of Common Stock from Sanofi
 

 

 

 

 

 

 

 
(0.1
)
 
(54.0
)
 
(54.0
)
Stock-based compensation charges
 

 

 

 

 
114.8

 

 

 

 

 
114.8

Adjustment upon adoption of new accounting standard
 

 

 

 

 

 
9.7

 

 

 

 
9.7

Net income
 

 

 

 

 

 
461.1

 

 

 

 
461.1

Other comprehensive gain, net of tax
 

 

 

 

 

 

 
15.1

 

 

 
15.1

Balance, March 31, 2019
 
1.9

 
$

 
111.7

 
$
0.1

 
$
4,160.9

 
$
5,725.1

 
$
2.8

 
(4.0
)
 
$
(444.2
)
 
$
9,444.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, December 31, 2017
 
1.9

 
$

 
109.5

 
$
0.1

 
$
3,512.9

 
$
2,946.7

 
$
0.6

 
(3.8
)
 
$
(316.2
)
 
$
6,144.1

Issuance of Common Stock in connection with exercise of stock options
 

 

 
0.1

 

 
13.6

 

 

 

 

 
13.6

Issuance of Common Stock in connection with Company 401(k) Savings Plan
 

 

 
0.1

 

 
(0.7
)
 

 

 

 

 
(0.7
)
Stock-based compensation charges
 

 

 

 

 
85.8

 

 

 

 

 
85.8

Cumulative-effect adjustment upon adoption of new accounting standards
 

 

 

 

 

 
(136.9
)
 
(6.6
)
 

 

 
(143.5
)
Net income
 

 

 

 

 

 
478.0

 

 

 

 
478.0

Other comprehensive loss, net of tax
 

 

 

 

 

 

 
(9.7
)
 

 

 
(9.7
)
Balance, March 31, 2018
 
1.9

 

 
109.7

 
$
0.1

 
$
3,611.6

 
$
3,287.8

 
$
(15.7
)
 
(3.8
)
 
$
(316.2
)
 
$
6,567.6

The accompanying notes are an integral part of the financial statements.


4


Table of Contents


REGENERON PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)
 
 
Three Months Ended
March 31,
 
 
2019
 
2018
Cash flows from operating activities:
 
 
 
 
Net income
 
$
461.1

 
$
478.0

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
51.0

 
36.4

Non-cash compensation expense
 
107.9

 
82.4

Other non-cash items, net
 
(23.8
)
 
(4.2
)
Deferred taxes
 
(10.7
)
 
(6.4
)
Changes in assets and liabilities:
 
 
 
 
(Increase) decrease in Sanofi, Bayer, and trade accounts receivable
 
(106.1
)
 
30.4

Increase in inventories
 
(58.6
)
 
(88.8
)
Decrease in prepaid expenses and other assets
 
69.3

 
68.8

Increase (decrease) in deferred revenue
 
426.5

 
(54.5
)
(Decrease) increase in accounts payable, accrued expenses, and other liabilities
 
(19.6
)
 
76.7

Total adjustments
 
435.9

 
140.8

Net cash provided by operating activities
 
897.0

 
618.8

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Purchases of marketable and other securities
 
(1,040.2
)
 
(601.3
)
Sales or maturities of marketable securities
 
338.4

 
255.3

Capital expenditures
 
(74.3
)
 
(79.4
)
Net cash used in investing activities
 
(776.1
)
 
(425.4
)
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Proceeds from issuance of Common Stock
 
140.6

 
13.4

Payments in connection with Common Stock tendered for employee tax obligations
 
(10.7
)
 

Repurchases of Common Stock
 
(10.0
)
 

Net cash provided by financing activities
 
119.9

 
13.4

 
 
 
 
 
Net increase in cash, cash equivalents, and restricted cash
 
240.8

 
206.8

 
 
 
 
 
Cash, cash equivalents, and restricted cash at beginning of period
 
1,480.2

 
825.2

 
 
 
 
 
Cash, cash equivalents, and restricted cash at end of period
 
$
1,721.0

 
$
1,032.0

 
 
 
 
 
The accompanying notes are an integral part of the financial statements.


5


Table of Contents


REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in millions, except per share data)

1. Interim Financial Statements
The interim Condensed Consolidated Financial Statements of Regeneron Pharmaceuticals, Inc. and its subsidiaries ("Regeneron," "Company," "we," "us," and "our") have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and disclosures necessary for a presentation of the Company's financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, these financial statements reflect all normal recurring adjustments and accruals necessary for a fair presentation of the Company's condensed consolidated financial statements for such periods. The results of operations for any interim period are not necessarily indicative of the results for the full year. The December 31, 2018 Condensed Consolidated Balance Sheet data were derived from audited financial statements, but do not include all disclosures required by accounting principles generally accepted in the United States of America. These financial statements should be read in conjunction with the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.
Certain reclassifications have been made to prior period amounts to conform with the current period's presentation.
We adopted Accounting Standards Codification ("ASC") 842, Leases, on January 1, 2019 (the "effective date") and used the effective date as our date of initial application. See Note 8. The new standard requires a lessee to recognize on its balance sheet (for both finance and operating leases) a liability for future lease payments and a right-of-use asset representing its right to use the underlying asset over the lease term. We elected the practical expedients upon transition, which permitted companies to not reassess lease identification, classification, and initial direct costs under the new standard for leases that commenced prior to the effective date. Upon adoption of the new standard, we recognized right-of-use assets of $33.2 million related to operating leases as of January 1, 2019. The impact of adopting the standard for the facilities that we had historically applied build-to-suit and capital lease accounting was not material to our Condensed Consolidated Financial Statements. Prior period amounts have not been adjusted in connection with the adoption of this standard.
2. Product Sales
Net product sales consist of the following:
 
 
Three Months Ended
March 31,
Net Product Sales in the United States
 
2019
 
2018
EYLEA®
 
$
1,074.1

 
$
984.0

Libtayo®
 
26.8

 

ARCALYST®
 
3.5

 
3.9

 
 
$
1,104.4

 
$
987.9

The Company had product sales to certain customers that accounted for more than 10% of total gross product revenue for each of the three months ended March 31, 2019 and 2018. Sales to each of these customers as a percentage of the Company's total gross product revenue are as follows:
 
 
Three Months Ended
March 31,
 
 
2019
 
2018
Besse Medical, a subsidiary of AmerisourceBergen Corporation
 
59
%
 
55
%
McKesson Corporation
 
31
%
 
40
%
The following table summarizes the provisions, and credits/payments, for these sales-related deductions during the three months ended March 31, 2019 and 2018.

6


Table of Contents

REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


 
Rebates, Chargebacks, and Discounts
 
Distribution-
Related
Fees
 
Other Sales-
Related
Deductions
 
Total
Balance as of December 31, 2018
$
41.1

 
$
42.0

 
$
8.3

 
$
91.4

Provisions
78.6

 
52.8

 
16.1

 
147.5

Credits/payments
(60.8
)
 
(47.9
)
 
(0.4
)
 
(109.1
)
Balance as of March 31, 2019
$
58.9

 
$
46.9

 
$
24.0

 
$
129.8

 
 
 
 
 
 
 
 
Balance as of December 31, 2017
$
29.9

 
$
34.1

 
$
21.3

 
$
85.3

Provisions
48.5

 
51.7

 
11.2

 
111.4

Credits/payments
(30.7
)
 
(42.0
)
 
(14.7
)
 
(87.4
)
Balance as of March 31, 2018
$
47.7

 
$
43.8

 
$
17.8

 
$
109.3

3. Collaboration Agreements
a. Sanofi
The collaboration revenue we earned from Sanofi is detailed below:
 
 
Three Months Ended
March 31,
Sanofi Collaboration Revenue
 
2019
 
2018
Antibody:
 
 
 
 
Reimbursement of Regeneron research and development expenses
 
$
74.5

 
$
60.4

Reimbursement of Regeneron commercialization-related expenses
 
116.6

 
85.4

Regeneron's share of losses in connection with commercialization of antibodies
 
(27.8
)
 
(74.8
)
Other
 
12.9

 
17.3

Total Antibody
 
176.2

 
88.3

Immuno-oncology:
 
 
 
 
Reimbursement of Regeneron research and development expenses
 
46.4

 
73.8

Reimbursement of Regeneron commercialization-related expenses
 
2.3

 
1.2

Other
 
21.5

 
26.2

Total Immuno-oncology
 
70.2

 
101.2

 
 
$
246.4

 
$
189.5


7


Table of Contents

REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


Antibody
The Company is party to a global, strategic collaboration with Sanofi to discover, develop, and commercialize fully human monoclonal antibodies (the "Antibody Collaboration"). Under the companies' License and Collaboration Agreement, following receipt of the first positive Phase 3 trial results for a co-developed drug candidate, subsequent Phase 3 trial-related costs for that drug candidate ("Shared Phase 3 Trial Costs") are shared 80% by Sanofi and 20% by Regeneron. The Company recognized as research and development expenses $9.3 million and $13.9 million during the three months ended March 31, 2019 and 2018, respectively, its share of antibody development expenses that Sanofi incurred related to Praluent® (alirocumab), Kevzara® (sarilumab), and Dupixent® (dupilumab). All other agreed-upon worldwide development expenses incurred by both companies are funded by Sanofi.
Effective January 7, 2018, the Company and Sanofi entered into a letter agreement (the "Letter Agreement") in connection with, among other matters, the allocation of additional funds to certain activities relating to dupilumab and REGN3500 (collectively, the "Dupilumab/REGN3500 Eligible Investments"). Refer to the "Immuno-Oncology" section below for further details regarding the Letter Agreement. During the first quarter of 2019, Sanofi elected to sell, and we elected to purchase (in cash), 24,143 shares of the Company's Common Stock in connection with Sanofi's funding obligation for Dupilumab/REGN3500 Eligible Investments. Consequently, we recorded the cost of the shares received, or $10.0 million, as Treasury Stock during the first quarter of 2019.
Sanofi leads commercialization activities for products developed under the Antibody Collaboration, subject to the Company's right to co-promote such products. In addition to profit and loss sharing, the Company is entitled to receive up to $250.0 million in sales milestone payments, with milestone payments commencing only if and after aggregate annual sales outside the United States exceed $1.0 billion on a rolling twelve-month basis. The amount of variable consideration related to our share of profits and losses, as well as sales milestones, is deemed to be constrained as of March 31, 2019, and therefore has not been included in the transaction price.
The following table summarizes accounts receivable and deferred revenue information in connection with the Company's Antibody Collaboration with Sanofi:
 
 
March 31,
 
December 31,
 
 
2019
 
2018
Accounts receivable
 
$
264.4

 
$
138.2

Deferred revenue
 
$
302.0

 
$
236.1

Significant changes in deferred revenue balances are as follows:
 
 
Three Months Ended
March 31, 2019
Increase due to shipments of commercial supplies to Sanofi
 
$
86.0

Revenue recognized that was included in deferred revenue at the beginning of the period
 
$
(20.1
)
As we recognize Sanofi antibody collaboration revenue in an amount equal to the amount we have the right to invoice and such amount corresponds directly with the value to Sanofi of our performance to date, we do not disclose the value of the transaction price allocated to our remaining unsatisfied performance obligations.
Immuno-Oncology
In 2015, the Company and Sanofi entered into a collaboration to discover, develop, and commercialize antibody-based cancer treatments in the field of immuno-oncology (the "IO Collaboration"). The IO Collaboration is governed by an Amended and Restated Immuno-oncology Discovery and Development Agreement ("Amended IO Discovery Agreement"), and an Immuno-oncology License and Collaboration Agreement ("IO License and Collaboration Agreement").
Effective December 31, 2018, the Company and Sanofi entered into an Amended IO Discovery Agreement, which narrowed the scope of the existing discovery and development activities conducted by the Company ("IO Development Activities") under the 2015 IO Discovery Agreement to developing therapeutic bispecific antibodies targeting (i) BCMA and CD3 (the "BCMAxCD3

8


Table of Contents

REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


Program") and (ii) MUC16 and CD3 (the "MUC16xCD3 Program") through clinical proof-of-concept. The Amended IO Discovery Agreement provided for Sanofi’s payment of $461.9 million to the Company as consideration for (x) the termination of the 2015 IO Discovery Agreement, (y) the prepayment for certain IO Development Activities regarding the BCMAxCD3 Program and the MUC16xCD3 Program, and (z) the reimbursement of costs incurred by the Company under the 2015 IO Discovery Agreement during the fourth quarter of 2018.
If Sanofi exercises its option to license rights to a BCMAxCD3 Program antibody or MUC16xCD3 Program antibody thereunder, it will co-develop these drug candidates with the Company through product approval. Sanofi will fund development costs up front for a BCMAxCD3 Program antibody and we will reimburse half of the total development costs for such antibody from our share of future IO Collaboration profits to the extent they are sufficient for this purpose. In addition, we and Sanofi will share equally, on an ongoing basis, the development costs for a MUC16xCD3 Program antibody.
Under the terms of the IO License and Collaboration Agreement, the parties are co-developing Libtayo (cemiplimab), an antibody targeting the receptor known as programmed cell death protein 1 (PD-1). The parties share equally, on an ongoing basis, agreed-upon development expenses for Libtayo. Pursuant to the Letter Agreement, the Libtayo development budget was increased and the Company has agreed to allow Sanofi to satisfy in whole or in part its funding obligations with respect to the Libtayo development and Dupilumab/REGN3500 Eligible Investments by selling up to an aggregate of 1,400,000 shares (of which 1,042,732 currently remains available) of our Common Stock directly or indirectly owned by Sanofi through September 30, 2020. If Sanofi desires to sell shares of our Common Stock during the term of the Letter Agreement to satisfy a portion or all of its funding obligations for the Libtayo development and/or Dupilumab/REGN3500 Eligible Investments, we may elect to purchase, in whole or in part, such shares from Sanofi. If we do not elect to purchase such shares, Sanofi may sell the applicable number of shares (subject to certain daily and quarterly limits) in one or more open-market transactions. During the first quarter of 2019, Sanofi elected to sell, and we elected to purchase (by issuing a credit towards the amount owed by Sanofi), 106,972 shares of the Company's Common Stock to satisfy Sanofi's funding obligation related to Libtayo development costs. Consequently, we recorded the cost of the shares received, or $44.0 million as Treasury Stock during the first quarter of 2019. Refer to the "Antibody" section above for a description of share transactions related to Dupilumab/REGN3500 Eligible Investments.
The Company has principal control over the development of Libtayo and leads commercialization activities in the United States, while Sanofi will lead commercialization activities outside of the United States and the parties will equally share profits and losses from worldwide sales. As it relates to the IO Collaboration, "Reimbursement of Regeneron commercialization-related expenses" in the table above represents reimbursement of costs by Sanofi in connection with the commercialization of Libtayo outside of the United States.
The following table summarizes accounts receivable and deferred revenue information in connection with the Company's IO Collaboration with Sanofi:
 
 
March 31,
 
December 31,
 
 
2019
 
2018
Accounts receivable
 
$
18.6

 
$
77.9

Deferred revenue
 
$
665.8

 
$
289.9

Significant changes in deferred revenue balances are as follows:
 
 
Three Months Ended
March 31, 2019
Increase as a result of payment received from Sanofi
 
$
415.9

Revenue recognized that was included in deferred revenue at the beginning of the period
 
$
(26.2
)
Revenue recognized that was added to deferred revenue during the period
 
$
(13.8
)

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REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


The aggregate amount of the transaction price under the IO Collaboration allocated to the Company's performance obligation that was unsatisfied (or partially unsatisfied) as of March 31, 2019 was $1,324.7 million. This amount is expected to be recognized as revenue over the remaining period in which the Company is obligated to satisfy its performance obligation in connection with performing development activities.
b. Bayer
Revenue earned in connection with our Bayer EYLEA collaboration is as follows (note that the table excludes amounts in connection with our Bayer Ang2 antibody and PDGFR-beta antibody collaboration agreements, which were previously terminated):
 
 
Three Months Ended
March 31,
Bayer EYLEA Collaboration Revenue
 
2019
 
2018
Regeneron's net profit in connection with commercialization of EYLEA outside the United States
 
$
249.3

 
$
232.1

Reimbursement of Regeneron EYLEA development expenses
 
2.6

 
3.5

Other
 
24.3

 
11.8

 
 
$
276.2

 
$
247.4

The Company is party to a license and collaboration agreement with Bayer for the global development and commercialization of EYLEA outside the United States. Bayer markets EYLEA outside the United States, where, for countries other than Japan, the companies share equally in profits and losses from sales of EYLEA. In Japan, the Company is entitled to receive a tiered percentage of between 33.5% and 40.0% of EYLEA net product sales. In addition, the Company and Bayer share the funding of agreed-upon EYLEA development costs.
c. Teva
In September 2016, the Company and Teva entered into a collaboration agreement (the "Teva Collaboration Agreement") to develop and commercialize fasinumab globally, excluding certain Asian countries that are subject to our collaboration agreement with Mitsubishi Tanabe Pharma Corporation. In connection with the Teva Collaboration Agreement, Teva made a $250.0 million non-refundable up-front payment in September 2016. The Company leads global development activities, and the parties share development costs equally, on an ongoing basis, under a global development plan. The Company is also responsible for the manufacture and supply of fasinumab globally.
The Company recognized $53.7 million and $58.6 million of revenue for the three months ended March 31, 2019 and 2018, respectively, in connection with the Teva Collaboration Agreement.
The following table summarizes accounts receivable and deferred revenue information in connection with the Teva Collaboration Agreement:
 
 
March 31,
 
December 31,
 
 
2019
 
2018
Accounts receivable (recorded within Prepaid expenses and other current assets)
 
$
32.2

 
$
28.8

Deferred revenue
 
$
173.3

 
$
194.5

Significant changes in deferred revenue balances are as follows:
 
 
Three Months Ended
March 31, 2019
Revenue recognized that was included in deferred revenue at the beginning of the period
 
$
(21.2
)

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REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


The aggregate amount of the transaction price under the Teva Collaboration Agreement allocated to the Company's performance obligation that was unsatisfied (or partially unsatisfied) as of March 31, 2019 was $418.2 million. This amount is expected to be recognized as revenue over the remaining period in which the Company is obligated to satisfy its performance obligation in connection with performing development activities.
d. Alnylam
In April 2019, the Company and Alnylam Pharmaceuticals, Inc. entered into a global, strategic collaboration to discover, develop, and commercialize RNA interference (RNAi) therapeutics for a broad range of diseases by addressing therapeutic disease targets expressed in the eye and central nervous system ("CNS"), in addition to a select number of targets expressed in the liver. The collaboration is governed by a Master Collaboration Agreement (the "Master Agreement") (including the form of a License Agreement and a Co-Commercialization Collaboration Agreement). Under the terms of the Master Agreement, we are obligated to make an up-front payment of $400.0 million to Alnylam. For each program, we will provide Alnylam with a specified amount of funding at program initiation and at lead candidate designation, and Alnylam is eligible to receive up to $200.0 million in clinical proof-of-principle milestones for eye or CNS programs.
Under the collaboration, the parties plan to perform discovery research until designation of lead candidates. Following designation of a lead candidate, the parties may further advance such lead candidate under either a License Agreement or a Co-Commercialization Collaboration Agreement structure. The initial target nomination and discovery period is five years (which may under certain situations automatically be extended for up to seven years in the aggregate) (the "Research Term"). In addition, we have an option to extend the Research Term for an additional five-year period for a research extension fee ranging from $200.0 million to $400.0 million; the actual amount of the fee will be determined based on the acceptance of one or more INDs (or their equivalent in certain other countries) for programs in the eye and CNS.
In connection with the collaboration, we and Alnylam also entered into a Stock Purchase Agreement. Pursuant to the terms of the Stock Purchase Agreement, we have agreed to purchase shares of Alnylam common stock for aggregate cash consideration of approximately $400.0 million.
4. Net Income Per Share
The Company's basic net income per share amounts have been computed by dividing net income by the weighted average number of shares of Common Stock and Class A Stock outstanding. Net income per share is presented on a combined basis, inclusive of Common Stock and Class A Stock outstanding, as each class of stock has equivalent economic rights. Diluted net income per share includes the potential dilutive effect of other securities as if such securities were converted or exercised during the period, when the effect is dilutive. The calculations of basic and diluted net income per share are as follows:
 
 
Three Months Ended
March 31,
 
 
2019
 
2018
Net income - basic and diluted
 
$
461.1

 
$
478.0

 
 
 
 
 
(Shares in millions)
 
 
 
 
Weighted average shares - basic
 
108.9

 
107.6

Effect of dilutive securities:
 
 
 
 
Stock options
 
6.5

 
7.3

Restricted stock
 
0.1

 

Dilutive potential shares
 
6.6

 
7.3

Weighted average shares - diluted
 
115.5

 
114.9

 
 
 
 
 
Net income per share - basic
 
$
4.23

 
$
4.44

Net income per share - diluted
 
$
3.99

 
$
4.16


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REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


Shares which have been excluded from diluted per share amounts because their effect would have been antidilutive include the following:
 
 
Three Months Ended
March 31,
(Shares in millions)
 
2019
 
2018
Stock options
 
12.3

 
14.9

Restricted stock
 

 
0.1

5. Marketable Securities
Marketable securities as of March 31, 2019 and December 31, 2018 consist of both available-for-sale debt securities of investment grade issuers (see below and Note 6) as well as equity securities of publicly traded companies (see Note 6).
The following tables summarize the Company's investments in available-for-sale debt securities:
 
 
Amortized
 
Unrealized
 
Fair
As of March 31, 2019
 
Cost Basis
 
Gains
 
Losses
 
Value
Available-for-sale debt securities:
 
 
 
 
 
 
 
 
Corporate bonds
 
$
3,352.4

 
$
9.3

 
$
(6.3
)
 
$
3,355.4

U.S. government and government agency obligations
 
129.7

 
0.1

 
(0.6
)
 
129.2

Sovereign bonds
 
26.8

 
0.2

 

 
27.0

Commercial paper
 
152.0

 

 

 
152.0

Certificates of deposit
 
69.3

 
0.1

 

 
69.4

 
 
$
3,730.2

 
$
9.7

 
$
(6.9
)
 
$
3,733.0

 
 
 
 
 
 
 
 
 
As of December 31, 2018
 
 
 
 
 
 
 
 
Available-for-sale debt securities:
 
 
 
 
 
 
 
 
Corporate bonds
 
$
2,734.8

 
$
1.0

 
$
(17.4
)
 
$
2,718.4

U.S. government and government agency obligations
 
110.4

 

 
(1.0
)
 
109.4

Sovereign bonds
 
7.6

 

 

 
7.6

Commercial paper
 
113.8

 

 

 
113.8

Certificates of deposit
 
60.0

 

 

 
60.0

 
 
$
3,026.6

 
$
1.0

 
$
(18.4
)
 
$
3,009.2

The Company classifies its investments in available-for-sale debt securities based on their contractual maturity dates. The available-for-sale debt securities listed as of March 31, 2019 mature at various dates through February 2024. The fair values of available-for-sale debt security investments by contractual maturity consist of the following:
 
 
March 31,
2019
 
December 31,
2018
Maturities within one year
 
$
1,523.9

 
$
1,342.2

Maturities after one year through five years
 
2,209.1

 
1,667.0

 
 
$
3,733.0

 
$
3,009.2


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REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


The following table shows the fair value of the Company's available-for-sale debt securities that have unrealized losses and that are deemed to be only temporarily impaired, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position.
 
Less than 12 Months
 
12 Months or Greater
 
Total
As of March 31, 2019
Fair Value
 
Unrealized Loss
 
Fair Value
 
Unrealized Loss
 
Fair Value
 
Unrealized Loss
Corporate bonds
$
313.3

 
$
(0.3
)
 
$
941.0

 
$
(6.0
)
 
$
1,254.3

 
$
(6.3
)
U.S. government and government agency obligations
204.0

 

 
92.4

 
(0.6
)
 
296.4

 
(0.6
)
 
$
517.3

 
$
(0.3
)
 
$
1,033.4

 
$
(6.6
)
 
$
1,550.7

 
$
(6.9
)
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
$
1,482.6

 
$
(6.1
)
 
$
801.6

 
$
(11.3
)
 
$
2,284.2

 
$
(17.4
)
U.S. government and government agency obligations

 

 
99.1

 
(1.0
)
 
99.1

 
(1.0
)
 
$
1,482.6

 
$
(6.1
)
 
$
900.7

 
$
(12.3
)
 
$
2,383.3

 
$
(18.4
)
There were no realized losses on sales of marketable securities, and realized gains were not material, for the three months ended March 31, 2019 and 2018.
With respect to marketable securities, for the three months ended March 31, 2019 and 2018, amounts reclassified from Accumulated other comprehensive (loss) income into Other income (expense), net were related to realized gains on sales of debt securities. During the three months ended March 31, 2019 and 2018, we recorded $42.8 million and $9.4 million, respectively, of net unrealized gains on equity securities in Other income (expense), net.

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REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


6. Fair Value Measurements
The Company's assets that are measured at fair value on a recurring basis consist of the following:
 
 
 
Fair Value Measurements at Reporting Date Using
As of March 31, 2019
Fair Value
 
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
Available-for-sale debt securities:
 
 
 
 
 
Corporate bonds
$
3,355.4

 

 
$
3,355.4

U.S. government and government agency obligations
129.2

 

 
129.2

Sovereign bonds
27.0

 

 
27.0

Commercial paper
152.0

 

 
152.0

Certificates of deposit
69.4

 

 
69.4

Equity securities (unrestricted)
56.9

 
$
56.9

 

Equity securities (restricted)
73.8

 
66.0

 
7.8

 
$
3,863.7

 
$
122.9

 
$
3,740.8

 
 
 
 
 
 
As of December 31, 2018
 
 
 
 
 
Available-for-sale debt securities:
 
 
 
 
 
Corporate bonds
$
2,718.4

 

 
$
2,718.4

U.S. government and government agency obligations
109.4

 

 
109.4

Sovereign bonds
7.6

 

 
7.6

Commercial paper
113.8

 

 
113.8

Certificates of deposit
60.0

 

 
60.0

Equity securities (unrestricted)
43.6

 
$
43.6

 

Equity securities (restricted)
44.4

 

 
44.4

 
$
3,097.2

 
$
43.6

 
$
3,053.6

Marketable securities included in Level 2 are valued using quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-based valuations in which significant inputs used are observable. The Company considers market liquidity in determining the fair value for these securities. The Company did not record any charges for other-than-temporary impairment of its Level 2 marketable securities during the three months ended March 31, 2019 and 2018.
The Company held certain restricted equity securities as of March 31, 2019 which are subject to transfer restrictions until 2020.
As of March 31, 2019 and December 31, 2018, the Company had $45.5 million in equity investments that do not have a readily determinable fair value. These investments are recorded at cost within Other noncurrent assets.

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REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


7. Inventories
Inventories consist of the following:
 
March 31,
 
December 31,
 
2019
 
2018
Raw materials
$
232.4

 
$
226.8

Work-in-process
581.3

 
571.1

Finished goods
30.8

 
24.4

Deferred costs
364.3

 
328.9

 
$
1,208.8

 
$
1,151.2

Deferred costs represent the costs of product manufactured and shipped to the Company's collaborators for which recognition of revenue has been deferred.
8. Leases
We conduct certain of our research, development, and administrative activities at leased facilities. We also lease certain warehouses and vehicles. As described in Note 1, during the first quarter of 2019, we adopted ASC 842, Leases.
We determine if an arrangement is a lease considering whether there is an identified asset and the contract conveys the right to control its use. Leases with an initial term of 12 months or less are not recorded on the balance sheet. Our lease terms may include options to extend or terminate a lease when it is reasonably certain that we will exercise that option. We account for lease components (e.g., rental payments) separately from non-lease components (e.g., common area maintenance costs).
Right-of-use assets and lease liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term, unless there is a transfer of title or purchase option we are reasonably certain to exercise. For leases where an implicit rate is not readily determinable, we use our incremental borrowing rate based on information available at the lease commencement date to determine the present value of future lease payments. Lease expense for operating leases is recognized on a straight-line basis over the expected lease term.
Operating leases
Amounts recognized in the financial statements associated with operating leases were not material as of, and for the three months ended, March 31, 2019 and 2018. Operating lease right-of-use assets are included within other noncurrent assets and lease liabilities are included in other current and other noncurrent liabilities on our Condensed Consolidated Balance Sheet.
Finance leases
In March 2017, we entered into a Participation Agreement with BA Leasing BSC, LLC, an affiliate of Banc of America Leasing & Capital LLC ("BAL"), as lessor, and a syndicate of lenders (collectively, the "Participants"). In March 2017, we also entered into a Lease and Remedies Agreement with BAL, pursuant to which we have leased laboratory and office facilities in Tarrytown, New York (the "Facility") for a five-year term. The Participation Agreement, the Lease and Remedies Agreement, and certain other related agreements were amended and restated in May 2019, among other things, to revise certain covenants, representations and warranties, and events of default to be substantially similar to those set forth in the agreement governing the Company's revolving credit facility (as so amended and restated, the "Participation Agreement" and the "Lease," respectively). The Lease requires us to pay all maintenance, insurance, taxes, and other costs arising out of the use of the Facility. We are also required to make monthly payments of basic rent during the term of the Lease in an amount equal to a variable rate per annum based on the one-month LIBOR, plus an applicable margin that varies with our debt rating and total leverage ratio. The Participation Agreement and the Lease include an option for us to elect to extend the maturity date of the Participation Agreement and the term of the Lease for an additional five-year period, subject to the consent of all the Participants and certain other conditions. We also have the option prior to the end of the term of the Lease to (a) purchase the Facility by paying an amount equal to the outstanding principal amount of the Participants' advances under the Participation Agreement, all accrued and unpaid interest and yield thereon, and all other outstanding amounts under the Participation Agreement, the Lease, and certain related documents or (b) sell the Facility to a third

15


Table of Contents

REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


party on behalf of BAL. The advances under the Participation Agreement mature, and all amounts outstanding thereunder will become due and payable in full, at the end of the term of the Lease.
Prior to January 1, 2019, for certain of the premises under the Lease we were deemed, in substance, to be the owner of the buildings (collectively, the "Build-to-Suit Buildings"). Upon the adoption of ASC 842, the classification of the Build-to-Suit Buildings, for which the construction period had been completed, was reassessed and, consequently, they were derecognized and recognized as a finance lease. These premises, along with the other premises under the Lease, are classified as a finance lease as we have the option to purchase the Facility under terms that make it reasonably assured to be exercised.
The agreements governing the Lease financing contain financial and operating covenants, which are substantially similar to the covenants set forth in the Company's revolving credit facility. The Company was in compliance with all such covenants as of March 31, 2019.
Amounts recognized in the Condensed Consolidated Balance Sheet related to the Facility are included in the table below. We had no leases accounted for as finance leases, other than the Facility, as of March 31, 2019.
 
 
 
 
March 31,
 
 
Classification
 
2019
Finance lease assets
 
Property, plant, and equipment, net (a) 
 
$
670.9

Finance lease liabilities
 
Finance lease liabilities (noncurrent)
 
$
709.9

 
 
 
 
 
(a) Finance lease assets are recorded net of accumulated amortization of $65.3 million as of March 31, 2019.
As of December 31, 2018, property, plant, and equipment, at cost, included $723.9 million of leased property under the Company's capital and facility leases related to the Facility. Accumulated amortization related to these assets amounted to $61.7 million as of December 31, 2018.
Finance lease costs consist of the following:
 
 
Three Months Ended
March 31, 2019
Amortization of right-of-use assets
 
$
3.5

Interest on lease liabilities
 
7.2

 
 
$
10.7

Other information related to finance leases consist of the following:
 
 
March 31,
 
 
2019
Remaining lease term (in years)
 
2.93

Discount rate
 
3.69
%
Supplemental information
Maturities of lease liabilities as of March 31, 2019 are as follows:    

16


Table of Contents

REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


 
 
Operating Leases
 
Finance Leases
2019
 
$
6.2

 
$
19.5

2020
 
8.4

 
26.9

2021
 
5.1

 
26.6

2022
 
3.0

 
726.5

2023
 
2.6

 

2024
 
2.9

 

Thereafter
 
4.3

 

Total undiscounted lease payments
 
32.5

 
799.5

Imputed interest
 
(3.1
)
 
(82.2
)
Debt financing costs
 

 
(7.4
)
Total lease liabilities
 
$
29.4

 
$
709.9

As of December 31, 2018, the estimated future minimum noncancelable lease commitments, excluding the purchase price we would be obligated to pay if we were to exercise our option to purchase the Facility, were as follows:
 
 
Operating Leases
 
Capital and Facility Lease Obligations
2019
 
$
10.4

 
$
26.4

2020
 
3.8

 
28.4

2021
 
3.4

 
27.9

2022
 
2.2

 
7.0

2023
 
1.5

 

Thereafter
 
4.1

 

 
 
$
25.4

 
$
89.7

9. Income Taxes
The Company is subject to U.S. federal, state, and foreign income taxes. The Company's effective tax rate was 15.6% and 18.3% for the three months ended March 31, 2019 and 2018, respectively. The Company's effective tax rate for the three months ended March 31, 2019 was positively impacted, compared to the U.S. federal statutory rate, primarily by the federal tax credit for research activities, stock-based compensation, the foreign-derived intangible income deduction, and income earned in foreign jurisdictions with tax rates lower than the U.S. federal statutory rate. The Company's effective tax rate for the three months ended March 31, 2018 was positively impacted, compared to the U.S. federal statutory rate, primarily by the foreign-derived intangible income deduction and the federal tax credit for research activities.
10. Statement of Cash Flows
The following provides a reconciliation of cash, cash equivalents, and restricted cash reported within the Condensed Consolidated Balance Sheet to the total of the same such amounts shown in the Condensed Consolidated Statement of Cash Flows:

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REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


 
 
March 31,
 
March 31,
 
 
2019
 
2018
Cash and cash equivalents
 
$
1,708.5

 
$
1,019.5

Restricted cash included in Other noncurrent assets
 
12.5

 
12.5

Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statement of Cash Flows
 
$
1,721.0

 
$
1,032.0

Restricted cash consists of amounts held by financial institutions pursuant to contractual arrangements.
Supplemental disclosure of non-cash investing and financing activities
Included in accounts payable, accrued expenses, and other liabilities as of March 31, 2019 and December 31, 2018 were $54.4 million and $54.5 million, respectively, of accrued capital expenditures. Included in accounts payable, accrued expenses, and other liabilities as of March 31, 2018 and December 31, 2017 were $40.2 million and $41.8 million, respectively, of accrued capital expenditures.
As described in Note 3, during the three months ended March 31, 2019, we purchased (by issuing a credit towards the amount owed by Sanofi) 106,972 shares of our Common Stock from Sanofi to satisfy Sanofi's funding obligation related to Libtayo development costs, and recorded the cost of the shares received, or $44.0 million, as Treasury Stock.
11. Legal Matters
From time to time, the Company is a party to legal proceedings in the course of the Company's business. Costs associated with the Company's involvement in legal proceedings are expensed as incurred. The outcome of any such proceedings, regardless of the merits, is inherently uncertain. The Company recognizes accruals for loss contingencies associated with such proceedings when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. Unless otherwise noted below, the Company is unable to predict the outcome, or estimate a range of possible loss or possible gain, of the respective proceedings. If the Company were unable to prevail in any such proceedings, its consolidated financial position, results of operations, and future cash flows may be materially impacted.
Proceedings Relating to '287 Patent and '163 Patent
The Company is a party to patent infringement litigation initiated by the Company involving its European Patent No. 1,360,287 (the "'287 Patent") and its European Patent No. 2,264,163 (the "'163 Patent"). Each of these patents concerns genetically engineered mice capable of producing chimeric antibodies that are part human and part mouse. Chimeric antibody sequences can be used to produce high-affinity fully human monoclonal antibodies. In these proceedings, the Company claims infringement of several claims of the '287 Patent and the '163 Patent (as applicable), and seeks, among other types of relief, an injunction and an account of profits in connection with the defendants' infringing acts, which may include, among other things, the making, use, keeping, sale, or offer for sale of genetically engineered mice (or certain cells from which they are derived) that infringe one or more claims of the '287 Patent and the '163 Patent (as applicable).
On September 25, 2013, the Company commenced patent infringement litigation against Kymab Ltd in the English High Court of Justice, Chancery Division, Patents Court, in London, asserting the '287 Patent and '163 Patent. Following a trial to adjudicate the claims of infringement and counterclaims of invalidity of the '287 Patent and the '163 Patent, the court issued a final judgment on February 1, 2016, finding that the asserted claims of the '287 and '163 Patents are novel, not obvious, and infringed by Kymab's genetically engineered mice. However, the court invalidated the '287 and '163 Patents on the ground of insufficiency. On appeal, the Court of Appeal (Civil Division of England and Wales) reversed the English High Court's decision and held that the '287 Patent and '163 Patent are both valid and infringed by Kymab and subsequently issued a final order, which enjoins Kymab from infringing the '287 Patent and '163 Patent (subject to certain exceptions) and requires Kymab to destroy or deliver to a third party all products and antibodies and cells engineered to produce antibodies which infringe the '287 Patent and '163 Patent (subject to certain exceptions). Thereafter, the Supreme Court of the United Kingdom granted Kymab's application for permission to appeal the order made by the Court of Appeal and scheduled an oral hearing for February 11–12, 2020. The provisions of the final order of the Court of Appeal are stayed pending final determination of Kymab's appeal to the Supreme Court of the United Kingdom. The Company has also been awarded a portion of the legal fees incurred by it in connection with the proceedings in the English High Court of Justice and the Court of Appeal described above.

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REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


On July 8 and July 13, 2016, notices of opposition against the '163 Patent were filed in the European Patent Office (the "EPO") by Merus N.V. and Kymab and Novo Nordisk A/S, respectively. The notices assert, as applicable, lack of novelty, lack of inventive step, and insufficiency. Following an oral hearing before the Opposition Division of the EPO on February 5–7, 2018, the Opposition Division upheld the '163 Patent without amendments. Kymab, Merus, and Novo Nordisk each filed a notice of appeal of the Opposition Division's decision on February 9, 2018, May 25, 2018, and June 26, 2018, respectively. On January 7, 2019, Merus withdrew its appeal of the '163 Patent in the EPO in connection with the previously announced global settlement.
Proceedings Relating to Praluent (alirocumab) Injection
As described in greater detail below, the Company is currently a party to patent infringement actions initiated by Amgen Inc. against the Company and Sanofi (and/or the Company's and Sanofi's respective affiliated entities) in a number of jurisdictions relating to Praluent, which the Company is jointly developing and commercializing with Sanofi.
In the United States, Amgen has asserted U.S. Patent Nos. 8,829,165 (the "'165 Patent") and 8,859,741 (the "'741 Patent"), and seeks a permanent injunction to prevent the Company and the Sanofi defendants from commercial manufacturing, using, offering to sell, or selling within the United States (as well as importing into the United States) (collectively, "Commercializing") Praluent. Amgen also seeks a judgment of patent infringement of the asserted patents, monetary damages (together with interest), costs and expenses of the lawsuits, and attorneys' fees. The first jury trial in this litigation (the "First Trial") was held in the United States District Court for the District of Delaware (the "District Court") from March 8 to March 16, 2016. During the course of the First Trial, the District Court ruled as a matter of law in favor of Amgen that the asserted patent claims were not obvious, and in favor of the Company and the Sanofi defendants that there was no willful infringement of the asserted patent claims by the Company or the Sanofi defendants. On March 16, 2016, the jury returned a verdict in favor of Amgen in the First Trial, finding that the asserted claims of the '165 and '741 Patents were not invalid based on either a lack of written description or a lack of enablement. On October 5, 2017, the United States Court of Appeals for the Federal Circuit (the "Federal Circuit") reversed in part the District Court's decision and remanded for a new trial on the issues of written description and enablement. In addition, it affirmed the District Court's ruling that Amgen's patents were not obvious.
On January 3, 2019, the District Court held oral argument in the remanded proceedings on the Company and the Sanofi defendants' motion for judgment on the pleadings regarding Amgen's willful infringement claim. On January 18, 2019, the District Court entered an order (i) denying the Company and the Sanofi defendants' motion for summary judgment on validity, (ii) denying Amgen's motion for partial summary judgment on estoppel, and (iii) granting the Company and the Sanofi defendants' cross-motion for summary judgment on estoppel. On February 8, 2019, the District Court granted the Company and the Sanofi defendants' motion for judgment on the pleadings, thereby dismissing Amgen's claim of willful infringement. The second jury trial in this litigation (the "Second Trial") was held before the District Court in February 2019 to determine the validity of Amgen's asserted patent claims. On February 25, 2019, the jury returned a verdict in the Second Trial generally in favor of Amgen, finding that two claims of the '165 Patent and one claim of the '741 Patent were not invalid. The jury also found that two claims of the '165 Patent were invalid for lack of adequate written description while rejecting the lack of enablement challenges to those two claims. On February 25, 2019, the District Court notified the parties that a remedies trial, if necessary, would be held following the resolution of any appeals from the jury verdict in the Second Trial on the validity of Amgen's asserted patents. The District Court's final judgment is expected to be issued following resolution of the parties' post-trial motions (including Amgen's motion for a permanent injunction discussed below). The Company and the Sanofi defendants plan to appeal any aspect of the final judgment that is adverse to the Company and the Sanofi defendants.
On March 18, 2019, Amgen filed a motion for a permanent injunction to prohibit the Company and the Sanofi defendants from Commercializing Praluent in the United States (a "Permanent Injunction"), and an oral hearing on this motion has been scheduled for June 2019. Previously, the Federal Circuit stayed and then vacated a Permanent Injunction granted by the District Court in connection with the First Trial.
On July 25, 2016, Amgen filed a lawsuit against Regeneron, Sanofi-Aventis Groupe S.A., Sanofi-Synthelabo Limited, Aventis Pharma Limited, Sanofi Winthrop Industrie S.A., and Sanofi-Aventis Deutschland GmbH in the English High Court of Justice, Chancery Division, Patents Court, in London, seeking a declaration of infringement of Amgen's European Patent No. 2,215,124 (the "'124 Patent"), which pertains to PCSK9 monoclonal antibodies, by Praluent. The lawsuit also seeks a permanent injunction, damages, an accounting of profits, and costs and interest. On February 8, 2017, the court temporarily stayed this litigation on terms mutually agreed by the parties.
Also on July 25, 2016, Amgen filed a lawsuit for infringement of the '124 Patent against Regeneron, Sanofi-Aventis Groupe S.A., Sanofi Winthrop Industrie S.A., and Sanofi-Aventis Deutschland GmbH in the Regional Court of Düsseldorf, Germany (the

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REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


"Düsseldorf Regional Court"), seeking a permanent injunction, an accounting of marketing activities, a recall of Praluent and its removal from distribution channels, and damages. On November 14, 2017, the Düsseldorf Regional Court issued a decision staying the infringement proceedings until a decision of the Opposition Division of the EPO concerning the pending opposition filed by the Company, Sanofi, and several other opponents against the '124 Patent (as discussed below). Following Amgen's request to reopen the proceedings in light of the issuance of the Preliminary Opinion (as defined below), the Düsseldorf Regional Court held an oral hearing on September 11, 2018 and ruled on December 10, 2018 that the infringement proceedings would be reopened. An oral hearing in the Düsseldorf Regional Court was held on April 30, 2019, at which the Düsseldorf Regional Court deferred ruling on Amgen's request for a permanent injunction until June 6, 2019.
On July 12, 2018, Sanofi-Aventis Deutschland GmbH, Sanofi-Aventis Groupe S.A., and Sanofi Winthrop Industrie S.A. filed an action in the Federal Patents Court (the "FPC") in Munich, Germany, seeking a compulsory license from Amgen based on the '124 Patent for the continued commercializing of Praluent in Germany. This compulsory license action included a request for a provisional compulsory license. The FPC held an oral hearing on September 6, 2018 in the provisional compulsory license proceedings and denied Sanofi's request for the provisional compulsory license. On January 16, 2019, the Sanofi parties appealed the FPC's decision in the provisional compulsory license proceedings to the Federal Court of Justice of Germany and the oral hearing on the appeal has been scheduled for June 4, 2019. The compulsory license proceedings are continuing.
On September 26, 2016, Amgen filed a lawsuit for infringement of the '124 Patent in the Tribunal de grande instance in Paris, France against Regeneron, Sanofi-Aventis Groupe S.A., Sanofi Winthrop Industrie S.A., and Sanofi Chimie (subsequently added as a defendant). Amgen is seeking the prohibition of allegedly infringing activities with a €10,000 penalty per drug unit of Praluent produced in violation of the court order sought by Amgen; an appointment of an expert for the assessment of damages; disclosure of technical (including supply-chain) and accounting information to the expert and the court; provisional damages of €10.0 million (which would be awarded on an interim basis pending final determination); reimbursement of costs; publication of the ruling in three newspapers; and provisional enforcement of the decision to be issued, which would ensure enforcement of the decision (including any provisional damages) pending appeal. Amgen is not seeking a preliminary injunction in this proceeding at this time. On April 10, 2017, the Company and the Sanofi parties filed briefs seeking invalidation of certain of the claims of the '124 Patent, and Amgen filed a response on July 28, 2017. Oral hearing on this infringement lawsuit (originally scheduled for February 12, 2019) has yet to be scheduled.
The '124 Patent is also subject to opposition proceedings in the EPO seeking to invalidate certain of its claims, which were initiated by Sanofi on February 24, 2016 and, separately, by the Company, Sanofi, and several other opponents on November 24, 2016. On December 13, 2017, the Opposition Division of the EPO issued a preliminary, non-binding opinion (the "Preliminary Opinion") regarding the validity of the '124 Patent, indicating that it currently considers the claims of a new request filed by Amgen in response to the opposition to satisfy the requirements for patentability. An oral hearing on the oppositions against the '124 Patent was held on November 28–30, 2018, at which the Opposition Division upheld the validity of the '124 Patent's claims in amended form. The Company and Sanofi filed notices of appeal to the Technical Board of Appeal of the EPO on November 30, 2018.
The Company has recorded an accrual for loss contingencies associated with the '124 Patent proceedings discussed above. The ultimate resolution of these proceedings is not expected to have a material impact on the Company’s financial statements.
On May 19, 2017, Amgen filed a lawsuit for infringement of Amgen's Japanese Patent Nos. 5,906,333 (the "'333 Patent") and 5,705,288 (the "'288 Patent") in the Tokyo District Court Civil Division (the "Tokyo District Court") against Sanofi K.K. Amgen's complaint alleges that manufacturing, selling or otherwise transferring, and offering to sell or otherwise transfer Praluent (alirocumab) in Japan (as well as importing Praluent (alirocumab) into Japan) infringe the '333 and '288 Patents. The complaint further seeks a permanent injunction, disposal of product, and court costs. The Company has not been named as a defendant in this litigation. On January 17, 2019, the Tokyo District Court upheld the validity of the '333 Patent and '288 Patent and ordered a permanent injunction against Sanofi K.K. to stop manufacturing, selling or otherwise transferring, and offering to sell or otherwise transfer Praluent (alirocumab) in Japan (as well as importing Praluent (alirocumab) into Japan) and to dispose of all product. However, the Tokyo District Court stayed the enforcement of such injunction pending appeal to the Intellectual Property High Court of Japan (the "IPHC"). On January 30, 2019, Sanofi K.K. appealed the Tokyo District Court's decision in the infringement proceedings to the IPHC.

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REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


Proceedings Relating to Dupixent (dupilumab) Injection
On March 20, 2017, the Company, Sanofi-Aventis U.S. LLC, and Genzyme Corporation filed a lawsuit against Amgen and Immunex Corporation, a wholly owned subsidiary of Amgen, in the United States District Court for the District of Massachusetts seeking a declaratory judgment that the Company's and the other plaintiffs' Commercializing of Dupixent does not directly or indirectly infringe U.S. Patent No. 8,679,487 (the "'487 Patent") owned by Immunex Corporation relating to antibodies that bind the human interleukin-4 receptor. On May 1, 2017, the Company and the other plaintiffs filed a notice of voluntary dismissal of this action without prejudice.
On March 23, 2017, the Company, Sanofi-Aventis U.S. LLC, and Genzyme Corporation initiated an inter partes review ("IPR") in the United States Patent and Trademark Office ("USPTO") seeking a declaration of invalidity of the '487 Patent. On July 28 and 31, 2017, the same parties filed two additional IPR petitions in the USPTO seeking declarations of invalidity of the '487 Patent based on different grounds (the "Additional IPR Petitions"). On October 4, 2017, the Patent Trial and Appeal Board ("PTAB") of the USPTO issued a decision on the first IPR petition and declined to institute an IPR proceeding to review the validity of the '487 Patent. On February 15, 2018, the PTAB issued two decisions instituting the Company's and Sanofi's Additional IPR Petitions on all claims of the '487 Patent for which review had been requested. Oral hearings on the Additional IPR Petitions before the PTAB were held on November 14, 2018. On February 14, 2019, the PTAB issued final written decisions on the Additional IPR Petitions, invalidating all 17 claims of the '487 Patent as obvious based on one of the Additional IPR Petitions while declining to hold the challenged claims of the '487 Patent invalid based on the other.
On April 5, 2017, Immunex Corporation filed a lawsuit against the Company, Sanofi, Sanofi-Aventis U.S. LLC, Genzyme Corporation, and Aventisub LLC in the United States District Court for the Central District of California seeking a judgment of patent infringement of the '487 Patent and a declaratory judgment of infringement of the '487 Patent, in each case by the Company's and the other defendants' Commercializing of Dupixent; monetary damages (together with interest); an order of willful infringement of the '487 Patent, which would allow the court in its discretion to award damages up to three times the amount assessed; costs and expenses of the lawsuit; and attorneys' fees. Immunex is not seeking an injunction in this proceeding at this time. On June 21, 2017, the court denied a motion to dismiss Immunex's complaint previously filed by the Company and the Sanofi parties. On June 28, 2017, the Company and the Sanofi parties filed an answer to Immunex's complaint and counterclaims against Immunex and Amgen (which was amended on October 31, 2017 to, among other things, add an inequitable conduct allegation), and Immunex and Amgen filed an answer to the counterclaims on July 28, 2017. A combined hearing on the construction of certain disputed claim terms of the '487 Patent and the Company and the Sanofi parties' motion for summary judgment on the issue of indefiniteness of the '487 Patent claims was held on July 12, 2018. On August 24, 2018, the court issued an order denying this motion and construed the disputed claim terms as proposed by Amgen. On February 28, 2019, the court granted a joint stipulation by the parties to stay the litigation pending resolution of any appeal of the PTAB's final written decisions on the Additional IPR Petitions discussed above.
On September 30, 2016, Sanofi initiated a revocation proceeding in the United Kingdom to invalidate the U.K. counterpart of European Patent No. 2,292,665 (the "'665 Patent"), another patent owned by Immunex relating to antibodies that bind the human interleukin-4 receptor. At the joint request of the parties to the revocation proceeding, the U.K. Patents Court ordered on January 30, 2017 that the revocation action be stayed pending the final determination of the currently pending EPO opposition proceedings initiated by the Company and Sanofi in relation to the '665 Patent. The oral hearing before the EPO on the oppositions occurred on November 20, 2017, at which the claims of the '665 Patent were found invalid and the patent was revoked. A final written decision of revocation of the '665 Patent was issued by the EPO on January 4, 2018. Immunex filed a notice of appeal of the EPO's decision on January 31, 2018. On September 20, 2017 and September 21, 2017, respectively, the Company and Sanofi initiated opposition proceedings in the EPO against Immunex's European Patent No. 2,990,420 (the "'420 Patent"), a divisional patent of the '665 Patent (i.e., a patent that shares the same priority date, disclosure, and patent term of the parent '665 Patent but contains claims to a different invention). The oral hearing before the EPO on the oppositions occurred on February 14–15, 2019, at which the '420 Patent was revoked in its entirety. The original patent term of the Immunex patents is set to expire in 2021.

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REGENERON PHARMACEUTICALS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(Unless otherwise noted, dollars in thousands, except per share data)


Proceedings Relating to EYLEA (aflibercept) Injection and ZALTRAP® (ziv-aflibercept) Injection for Intravenous Infusion
On March 19, 2018, Novartis Vaccines and Diagnostics, Inc., Novartis Pharma AG, and Grifols Worldwide Operations Limited (collectively, the "Novartis Parties") filed a lawsuit against the Company in the United States District Court for the Southern District of New York, seeking a judgment of patent infringement of U.S. Patent No. 5,688,688 (the "'688 Patent") by the Company's manufacture of aflibercept (the active ingredient used in both EYLEA and ZALTRAP); monetary damages (together with interest) for a limited period prior to the '688 Patent expiration; an order of willful infringement of the '688 Patent (dismissed on October 24, 2018); costs and expenses of the lawsuit; and attorneys' fees. The '688 Patent expired on November 18, 2014. The Novartis Parties are not seeking an injunction in these proceedings. On March 20, 2019, the court issued its Opinion and Order on Claim Construction (the "Claim Construction Order") in the '688 Patent infringement litigation. Pursuant to the Claim Construction Order, on April 1, 2019, the court approved a joint stipulation and entered a partial judgment of noninfringement of the '688 Patent of nine asserted claims. As a result, only one claim for infringement of the '688 Patent remains pending.
Department of Justice Investigation
In January 2017, the Company received a subpoena from the U.S. Attorney's Office for the District of Massachusetts requesting documents relating to its support of 501(c)(3) organizations that provide financial assistance to patients; documents concerning its provision of financial assistance to patients with respect to products sold or developed by Regeneron (including EYLEA, Praluent, ARCALYST, and ZALTRAP); and certain other related documents and communications. The Company is cooperating with this investigation.
12. Recently Issued Accounting Standards
In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 requires an entity to measure and recognize expected credit losses for certain financial instruments, including trade receivables, as an allowance that reflects the entity's current estimate of credit losses expected to be incurred. For available-for-sale debt securities with unrealized losses, the standard requires allowances to be recorded instead of reducing the amortized cost of the investment. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. We are evaluating the impact that the new standard will have on our financial statements.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties relating to future events and the future performance of Regeneron Pharmaceuticals, Inc. (where applicable, together with its subsidiaries, "Regeneron," "Company," "we," "us," and "our"), and actual events or results may differ materially from these forward-looking statements. Words such as "anticipate," "expect," "intend," "plan," "believe," "seek," "estimate," variations of such words, and similar expressions are intended to identify such forward-looking statements, although not all forward-looking statements contain these identifying words. These statements concern, and these risks and uncertainties include, among others, the nature, timing, and possible success and therapeutic applications of our products, product candidates, and research and clinical programs now underway or planned, including without limitation EYLEA® (aflibercept) Injection, Dupixent® (dupilumab) Injection, Praluent® (alirocumab) Injection, Kevzara® (sarilumab) Injection, Libtayo® (cemiplimab) Injection, fasinumab, and evinacumab; the likelihood and timing of achieving any of our anticipated clinical development milestones and the impact of the recent and any potential future U.S. government shutdowns on the anticipated timing of any U.S. Food and Drug Administration regulatory action referenced in this report; unforeseen safety issues resulting from the administration of products and product candidates in patients, including serious complications or side effects in connection with the use of our product candidates in clinical trials; the likelihood and timing of possible regulatory approval and commercial launch of our late-stage product candidates and new indications for marketed products, including without limitation EYLEA, Dupixent, Praluent, Kevzara, Libtayo, fasinumab, and evinacumab; the extent to which the results from the research and development programs conducted by us or our collaborators may be replicated in other studies and lead to therapeutic applications; ongoing regulatory obligations and oversight impacting our marketed products (such as EYLEA, Dupixent, Praluent, Kevzara, and Libtayo), research and clinical programs, and business, including those relating to patient privacy; determinations by regulatory and administrative governmental authorities which may delay or restrict our ability to continue to develop or commercialize our products and product candidates; competing drugs and product candidates that may be superior to our products and product candidates; uncertainty of market acceptance and commercial success of our products and product candidates; our ability to manufacture and manage supply chains for multiple products and product

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candidates; the ability of our collaborators, suppliers, or other third parties (as applicable) to perform manufacturing, filling, finishing, packaging, labeling, distribution, and other steps related to our products and product candidates; coverage and reimbursement determinations by third-party payers, including Medicare and Medicaid; unanticipated expenses; the costs of developing, producing, and selling products; our ability to meet any of our financial projections or guidance, including without limitation capital expenditures, and changes to the assumptions underlying those projections or guidance; the potential for any license or collaboration agreement, including our agreements with Sanofi, Bayer, and Teva Pharmaceutical Industries Ltd. (or their respective affiliated companies, as applicable), to be cancelled or terminated without any further product success; and risks associated with intellectual property of other parties and pending or future litigation relating thereto, including without limitation the patent litigation and other related proceedings relating to EYLEA, Dupixent, and Praluent described further in Note 11 to our Condensed Consolidated Financial Statements included in this report, the ultimate outcome of any such proceedings, and the impact any of the foregoing may have on our business, prospects, operating results, and financial condition. These statements are made based on management's current beliefs and judgment, and the reader is cautioned not to rely on any such statements. In evaluating such statements, shareholders and potential investors should specifically consider the various factors identified under Part II, Item 1A. "Risk Factors," which could cause actual events and results to differ materially from those indicated by such forward-looking statements. We do not undertake any obligation to update publicly any forward-looking statement, whether as a result of new information, future events, or otherwise.
Overview
Regeneron Pharmaceuticals, Inc. is a fully integrated biotechnology company that discovers, invents, develops, manufactures, and commercializes medicines for the treatment of serious diseases. Our commercialized medicines and product candidates in development are designed to help patients with eye diseases, allergic and inflammatory diseases, cancer, cardiovascular and metabolic diseases, musculoskeletal diseases, infectious diseases, and rare diseases.
Selected financial information is summarized as follows:
 
 
Three Months Ended
March 31,
(In millions, except per share data)
 
2019
 
2018
Revenues
 
$
1,711.8

 
$
1,511.5

Net income
 
$
461.1

 
$
478.0

Net income per share - diluted
 
$
3.99

 
$
4.16


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We currently have seven products that have received marketing approval:
Product
 
Disease Area(1)
 
Territory
 
 
U.S.
 
EU
 
Japan
 
ROW(6)
EYLEA (aflibercept) Injection(2)
Neovascular age-related macular degeneration (wet AMD)
 
a
 
a
 
a
 
a
Diabetic macular edema (DME)
 
a
 
a
 
a
 
a
Macular edema following retinal vein occlusion (RVO), which includes macular edema following central retinal vein occlusion (CRVO) and macular edema following branch retinal vein occlusion (BRVO)
 
a
 
a
 
a
 
a
Myopic choroidal neovascularization (mCNV)
 
 
 
a
 
a
 
a
Diabetic retinopathy in patients with DME
 
a
 
 
 
 
 
 
Dupixent (dupilumab) Injection(3)
Atopic dermatitis (in adults)
 
a
 
a
 
a
 
a
Atopic dermatitis (in adolescents)
 
a
 
 
 
 
 
 
Asthma (in adults and adolescents)
 
a
 
 
 
a
 
a
Praluent (alirocumab) Injection(3)
LDL-lowering in heterozygous familial hypercholesterolemia (HeFH) or clinical atherosclerotic cardiovascular disease (ASCVD) (in adults)
 
a
 
a
 
a
 
a
 
Cardiovascular risk reduction in patients with established cardiovascular disease
 
a
 
a
 
 
 
 
Kevzara (sarilumab) Solution for Subcutaneous Injection(3)
Rheumatoid arthritis (RA) (in adults)
 
a
 
a
 
a
 
a
Libtayo (cemiplimab) Injection(3)(4)
Metastatic or locally advanced cutaneous squamous cell carcinoma (CSCC)
 
a
 
 
 
 
 
a
ARCALYST® (rilonacept) Injection for Subcutaneous Use
Cryopyrin-Associated Periodic Syndromes (CAPS), including Familial Cold Auto-inflammatory Syndrome (FCAS) and Muckle-Wells Syndrome (MWS)
 
a
 
 
 
 
 
 
ZALTRAP® (ziv-aflibercept) Injection for Intravenous Infusion(5)
Metastatic colorectal cancer (mCRC)
 
a
 
a
 
a
 
a
 
 
 
 
 
 
 
(1) Refer to label information in each territory for specific indication
(2) In collaboration with Bayer (outside the United States)
(3) In collaboration with Sanofi
(4) Marketed as Libtayo (cemiplimab-rwlc) Injection in the United States
(5) Pursuant to a 2015 amended and restated ZALTRAP agreement, Sanofi is solely responsible for the development and commercialization of ZALTRAP, and Sanofi pays us a percentage of aggregate net sales of ZALTRAP
(6) Rest of world. Checkmark in this column indicates that the product has received marketing approval in at least one country outside of the United States, EU, or Japan





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Marketed Products
Net Product Sales of Regeneron-Discovered Products(1)
 
Three Months Ended
March 31,
(In millions)
 
2019
 
2018
 
 
U.S.
 
ROW
 
Total
 
U.S.
 
ROW
 
Total
EYLEA(1)
 
$
1,074.1

 
$
669.4

 
$
1,743.5

 
$
984.0

 
$
624.0

 
$
1,608.0

Libtayo
 
26.8

 

 
26.8

 

 

 

ARCALYST
 
3.5

 

 
3.5

 
3.9

 

 
3.9

Net product sales recorded by Regeneron
 
$
1,104.4

 


 


 
$
987.9

 


 


 
 
 
 
 
 
 
 
 
 
 
 
 
Net product sales recorded by Sanofi(1):
 
 
 
 
 
 
 
 
Dupixent
 
$
303.0

 
$
70.7

 
$
373.7

 
$
116.8

 
$
14.6

 
$
131.4

Praluent
 
$
22.9

 
$
41.0

 
$
63.9

 
$
31.7

 
$
28.2

 
$
59.9

Kevzara
 
$
20.7

 
$
13.0

 
$
33.7

 
$
9.3

 
$
3.1

 
$
12.4

ZALTRAP
 
$
0.5

 
$
24.0

 
$
24.5

 
$
2.4

 
$
23.9

 
$
26.3

 
 
 
 
 
 
 
 
 
 
 
 
 
(1) Bayer records net product sales of EYLEA outside the United States and Sanofi records global net product sales of Dupixent, Praluent, Kevzara, and ZALTRAP. Refer to "Overview" above and "Collaboration Agreements" below for further details.
Programs in Clinical Development
All 20 of our product candidates in clinical development, including the five FDA-approved products which we are investigating in additional indications, were discovered in our research laboratories and are summarized below. We used our VelocImmune® technology to generate each of the antibodies in the table below. There are numerous uncertainties associated with drug development, including uncertainties related to safety and efficacy data from each phase of drug development (including any post-approval studies), uncertainties related to the enrollment and performance of clinical trials, changes in regulatory requirements, and changes in the competitive landscape affecting a product candidate. Refer to Part II, Item 1A. "Risk Factors" for a description of these and other risks and uncertainties that may affect our clinical programs.
Clinical Program
 
Phase 1
 
Phase 2
 
Phase 3
 
Regulatory Review(i)
EYLEA
 
 
 
 
Non-proliferative diabetic retinopathy (NPDR) in patients without DME

Diabetic retinopathy (U.S.)
 
 
 
 
 
 

Pre-filled syringe (U.S.)
Dupixent (dupilumab)(a)
Antibody to IL-4R alpha subunit
 
 
Grass allergy
Atopic dermatitis in adolescents and pediatrics (6–11 years of age)(d)

Asthma in adults and adolescents (EU)
 
 
Peanut allergy
 
 
 
 
 
 

Atopic dermatitis in pediatrics (6 months–5 years of age) (Phase 2/3)(d)

Atopic dermatitis in adolescents (12–17 years of age) (EU)
 
 
 
 

Asthma in pediatrics (6–11 years of age)

Auto-injector for 200 mg dose (U.S. and EU)
 
 
 
 
Eosinophilic esophagitis (EOE) (Phase 2/3)(c)
Chronic rhinosinusitis with nasal polyposis (CRSwNP) (U.S., EU, and Japan)
 
 
 
 
 
Chronic obstructive pulmonary disease (COPD)
 

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Clinical Program (continued)
 
Phase 1
 
Phase 2
 
Phase 3
 
Regulatory Review(i)
Praluent (alirocumab)(a)
Antibody to PCSK9
 
 
 
 
Homozygous familial hypercholesterolemia (HoFH)(c) in adults and pediatrics
 
 
 
 
 
 
HeFH in pediatrics
 
 
Kevzara (sarilumab)(a)
Antibody to IL-6R
 
 
Polyarticular-course juvenile idiopathic arthritis (pcJIA)
Polymyalgia rheumatica
 
 
 
 
 
Systemic juvenile idiopathic arthritis (sJIA)
Giant cell arteritis
 
 
Libtayo (cemiplimab)(a)
Antibody to PD-1(h)

Solid tumors and advanced hematologic malignancies
Metastatic or locally advanced CSCC(d)
First-line non-small cell lung cancer (NSCLC)
Metastatic or locally advanced CSCC (EU)
 
Basal cell carcinoma (BCC) (potentially pivotal study)
Second-line cervical cancer
 
 
Fasinumab(b)(f) (REGN475)
Antibody to NGF
 
 
 
 
Osteoarthritis of knee and hip(e)
 
 
Evinacumab(f) (REGN1500)
Antibody to ANGPTL3
 
 
Refractory hypercholesterolemia (both HeFH and non-FH)
HoFH(c)(d)
 
 
 
 
Severe hypertriglyceridemia
 
 
 
 
Garetosmab(f) (REGN2477)
Antibody to Activin A
 
 
Fibrodysplasia ossificans progressiva (FOP)(c)(e)