Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Regeneron Pharmaceuticals Inc (REGN, Financial) reported a 12% increase in total revenues for Q2 2024, reaching $3.55 billion, driven by strong sales of EYLEA HD and Dupixent.
- Dupixent global revenues grew 29% on a constant currency basis to $3.56 billion, with significant growth across all approved indications and geographies.
- Libtayo global net product sales increased by 43% on a constant currency basis, maintaining leadership in non-melanoma skin cancers and making inroads in non-small cell lung cancer.
- The company is on track to launch EYLEA HD pre-filled syringe by early 2025, which is expected to further strengthen its market position.
- Regeneron Pharmaceuticals Inc (REGN) has over 35 programs in clinical development, indicating a robust and diverse pipeline for future growth opportunities.
Negative Points
- The FDA approval for linvoseltamab is likely to be delayed beyond the August 22 PDUFA date due to unresolved findings from a third-party fill-finish manufacturer.
- Despite the strong performance, EYLEA HD and EYLEA combined net product sales only grew by 2.3% compared to the prior year, indicating potential market saturation.
- The company faces intense competition in the anti-VEGF space, which could impact future sales and market share.
- Regeneron Pharmaceuticals Inc (REGN) is experiencing increased operating expenses, with R&D expenses growing 10% year-over-year to $1.1 billion and SG&A expenses growing 19% to $666 million.
- The ongoing DOJ investigation into the marketing practices of EYLEA could pose legal and reputational risks for the company.
Q & A Highlights
Q: Regarding the EYLEA franchise, do you believe that EYLEA HD is reaching a stage and maturity of its launch where it will allow the overall category share to be relatively stable in the coming quarters? Is the market still growing around 10% year-over-year?
A: We are very much in the launch stage for EYLEA HD, and we are encouraged by the 52% increase in net sales this quarter. We see EYLEA HD as having the potential to be the new standard-of-care. As for market growth, we are tracking more on single-digit growth in the midrange rather than double-digit growth.
Q: Can you elaborate on your work in obesity specifically with leptin and the rationale for moving this to a Phase II trial?
A: Leptin doesn't work in normal obese patients because their leptin levels are already high. However, in patients who undergo profound weight loss, leptin levels drop, potentially driving increased food-seeking behavior. In these settings, leptin might help further weight loss. We are studying this in collaboration with Lilly's tirzepatide.
Q: On linvoseltamab, as you prepare for the potential launch, what feedback are you getting on how doctors may position it relative to existing therapies?
A: The efficacy data for our bispecific continues to look leading in the field, with deepening responses and a potentially best-in-class profile in terms of efficacy, safety, and dosing. We are moving aggressively to test this in earlier lines of therapy.
Q: Can you speak to the differences between your two Factor XI antibodies and what will be the key aspects you'll focus on in your upcoming readouts?
A: We have developed antibodies that split the mechanism of action, one affecting the activation domain and the other the catalytic domain. We expect to understand which one might have the best efficacy to safety profile by the end of the year, which will inform our future development plans.
Q: Given the market dynamics in 2Q, how should we think about the pace of conversion for EYLEA HD for the second half of 2024?
A: We are very pleased with the progress in the EYLEA HD launch. Utilization among treatment-naive patients doubled from the prior quarter, and we expect ongoing combination of initiation for EYLEA HD of switch patients and naive patients.
Q: Can you provide an update on the DOJ investigation into the marketing practices and whether Regeneron has changed any of its marketing practices since April?
A: There is nothing in the marketplace related to this lawsuit, and we have not changed our practices. We intend to fight it vigorously.
Q: Is there an opportunity to leverage Regeneron's eye disease commercial presence by acquiring novel potential blockbuster therapies for severe eye disease?
A: We think about this every day, but currently, we do not see any large-scale opportunities for late-stage products that we should acquire.
Q: Can you speak to the potential commercial opportunity represented by the Factor XI programs and what the future development plans look like?
A: We are evaluating our two classes of Factor XI antibodies and expect to understand their profiles by the end of the year. This will inform which direction to take them for which indication. The direct oral anticoagulant market is very large, and we are focusing on delivering similar or better efficacy with a better safety profile.
Q: How confident are you that the high dose launch momentum for EYLEA HD won't be disrupted by the relative near-term disadvantage of VABYSMO having a pre-filled syringe?
A: We are anticipating a launch in early 2025. We feel confident in the ongoing launch of EYLEA HD due to its profile, durability, and safety experience.
Q: Can you help frame out the number of patients or percent of those with food allergy where the combination of linvoseltamab and Dupixent could be an appropriate treatment?
A: We are starting with the most severe food allergy patients. If the approach is effective and safe, we can broaden to milder allergies. The numbers are staggering, with hundreds of thousands to millions of emergency room visits for food-based allergies annually.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
