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Regeneron Reports Fourth Quarter And Full Year 2015 Financial And Operating Results

The following excerpt is from the company's SEC filing.

Fourth quarter 2015 EYLEA

(aflibercept) Injection U.S. net sales increased

$746 million

versus fourth quarter 2014 and full year 2015 EYLEA U.S. net sales increased

$2.68 billion

versus full year 2014

Fourth quarter 2015 EYLEA global net sales

$1.16 billion

versus fourth quarter 2014 and full year 2015 EYLEA global net sales

$4.09 billion

Full year 2015 non-GAAP net income per diluted share

$12.07

versus full year 2014. Full year 2015 non-GAAP net income

$1.40 billion

versus full year 2014. Fourth quarter 2015 non-GAAP net income per diluted share increased

versus fourth quarter 2014. Fourth quarter non-GAAP net income of

$327 million

was unchanged versus fourth quarter of 2014.

Estimated full year 2016 EYLEA U.S. net sales growth of approximately 20% over 2015

-- Regeneron Pharmaceuticals, Inc. (NASDAQ:

today announced financial results for the fourth quarter and full year 2015 and provided an update on development programs.

Financial Highlights

($ in millions, except per share data)

Three Months Ended

December 31,

Year Ended

% Change

EYLEA U.S. net product sales

Total revenues

Non-GAAP net income

Non-GAAP net income per share - diluted

See note (4) below for an explanation of revisions made to certain amounts previously reported for the three months and year ended December 31, 2014.

"Regeneron had a successful 2015, with strong growth in EYLEA sales for retinal diseases, the approval of Praluent for hypercholesterolemia, and important advances across all stages of our pipeline," said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron. "In 2016, we look forward to driving increased physician education, patient access, and reimbursement for Praluent in the United States and to launching this important medicine in other countries around the world. We also anticipate significant pipeline progress including the U.S. FDA action on the sarilumab application for rheumatoid arthritis, the Phase 3 results and

potential U.S. regulatory submission for dupilumab in atopic dermatitis, and the continued progress of our development programs for retinal diseases, asthma, pain, infectious diseases, and cancer. Realizing these important product and pipeline opportunities will require significant investments, which are essential to support our long-term growth and success."

Business Highlights

(aflibercept) Injection for Intravitreal Injection

In the fourth quarter of 2015, net sales of EYLEA in the United States increased

$518 million

in the fourth quarter of 2014. For the full year of 2015, net sales of EYLEA in the United States increased

$2.676 billion

$1.736 billion

for the full year 2014. Overall distributor inventory levels remained within the Company's one- to two-week targeted range.

Bayer HealthCare commercializes EYLEA outside the United States. In the fourth quarter of 2015, net sales of EYLEA outside of the United States

were

$413 million

, compared to

$297 million

in the fourth quarter of 2014. In the fourth quarter of 2015, Regeneron recognized

$140 million

from its share of net profit from EYLEA sales outside the United States, compared to

$88 million

in the fourth quarter of 2014. For the full year of 2015, net sales of EYLEA outside of the United States

$1.413 billion

$1.039 billion

for the full year 2014. For the full year of 2015, Regeneron recognized

$467 million

$301 million

In October 2015, the European Commission granted marketing authorization of EYLEA for the treatment of visual impairment due to myopic choroidal neovascularization.

(alirocumab) Injection for the Treatment of High Low-Density Lipoprotein (LDL) Cholesterol

In the fourth quarter of 2015, net sales of Praluent were

$7 million

. For the full year of 2015, net sales of Praluent were

$11 million

. Product sales for Praluent are recorded by Sanofi, and the Company shares in any profits or losses from the commercialization of Praluent. Praluent was launched in the United States in the third quarter of 2015 and in certain countries in the European Union in the fourth quarter of 2015.

The Phase 3 ODYSSEY OUTCOMES trial completed enrollment during the fourth quarter of 2015.

Pipeline Progress

Regeneron has thirteen product candidates in clinical development. These consist of EYLEA and twelve fully human monoclonal antibodies generated using the Company's

VelocImmune

technology, including four in collaboration with Sanofi. In addition to EYLEA and Praluent, highlights from the antibody pipeline include:

Sarilumab

is the Company's antibody targeting IL-6R for rheumatoid arthritis. In December 2015, the U.S. Food and Drug Administration (FDA) accepted for review a Biologics License Application (BLA) for sarilumab, with a target action date of October 30, 2016. Sarilumab is currently being studied in the global Phase 3 SARIL-RA program

Dupilumab

, the Company's antibody that blocks signaling of IL-4 and IL-13, is currently being studied in atopic dermatitis, asthma, nasal polyps, and eosinophilic esophagitis.

Multiple Phase 3 studies of dupilumab in atopic dermatitis are currently underway. Phase 3 pivotal trials in atopic dermatitis are fully enrolled.

A Phase 3 pivotal study of dupilumab in patients with uncontrolled persistent asthma continues to enroll patients.

Fasinumab

is an antibody targeting Nerve Growth Factor (NGF). A sixteen-week Phase 2b/3 clinical trial for pain due to osteoarthritis has completed enrollment. The FDA has confirmed that the Company may proceed with studies of longer than sixteen-week duration.

REGN2222

, an antibody targeting the respiratory syncytial virus (RSV), is in Phase 3 clinical development. In October 2015, the FDA granted Fast Track designation to REGN2222 for the prevention of serious lower respiratory tract disease caused by RSV.

Select Upcoming 2016 Milestones

Clinical Programs

Initiate Phase 3 study for the treatment of diabetic retinopathy in patients without diabetic macular edema (DME)

REGN2176-3 (PDGFR-beta Antibody co-formulated with aflibercept)

Report results from Phase 2 study

Nesvacumab/aflibercept (Ang2 Antibody co-formulated with aflibercept)

Initiate Phase 2 study

Independent Data Monitoring Committee (IDMC) interim analyses of ODYSSEY OUTCOMES trial

Ongoing launch in the United States as well as in additional territories outside the United States

Sarilumab (IL-6R Antibody)

Regulatory decision in the United States

File for regulatory approvals outside the United States

Report results from Phase 3 SARIL-RA-MONARCH trial evaluating sarilumab versus adalimumab in monotherapy

Dupilumab (IL-4R Antibody)

Report results from Phase 3 atopic dermatitis pivotal trials

Complete rolling BLA submission for atopic dermatitis in the United States

Fasinumab (NGF Antibody)

Report results from Phase 2b/3 study in osteoarthritis

Initiate longer duration (greater than 16 weeks) Phase 3 trial

Immuno-oncology (PD-1 Antibody and bi-specific antibody against CD20 and CD3)

Report data from Phase 1 studies in patients with cancer

Fourth Quarter and Full Year 2015 Financial Results

Product Revenues:

Net product sales were

$750 million

in the fourth quarter and

$2.689 billion

for the full year 2015, compared to

$522 million

$1.751 billion

for the full year 2014. EYLEA net product sales in the United States were

Total Revenues:

Total revenues, which include product revenues described above, increased by

$1.098 billion

in the fourth quarter of 2015, compared to

$802 million

in the fourth quarter of 2014. Total revenues also include collaboration revenues of

$330 million

$272 million

in the fourth quarter of 2014. Full year 2015 total revenues increased by

$4.104 billion

$2.820 billion

for the full year 2014, and included collaboration revenues of

$1.339 billion

$1.037 billion

for the full year 2014. Collaboration revenues in the fourth quarter and full year 2015 increased primarily due to higher reimbursement of the Company's research and development expenses under its antibody collaboration with Sanofi, an increase in the Company's net profit from commercialization of EYLEA outside the United States, and reimbursement of the Company's research and development expenses and amortization of up-front payments received in connection with the Company's July 2015 immuno-oncology collaboration with Sanofi, partly offset by the Company's share of higher collaboration losses primarily in connection with commercialization of Praluent. Collaboration revenue for the full year 2015 and 2014 also included

$15 million

$105 million

, respectively, of sales milestone payments from Bayer HealthCare.

Refer to Table 4 for a summary of collaboration revenue.

Research and Development (R&D) Expenses:

In 2015, GAAP R&D expenses...


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