J.P. Morgan Healthcare Conference January 2014 Leonard S. Schleifer, M.D., Ph.D. Chief Executive Officer Exhibit 99.1 |
Page 2 | Copyright Regeneron 2014 Safe Harbor Statement This presentation includes forward-looking statements that involve risks and uncertainties relating to future events and the future performance of Regeneron Pharmaceuticals, Inc. (“Regeneron” or the “Company”), 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 Regeneron's products, product candidates, and research and clinical programs now underway or planned; 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 Regeneron’s product candidates in clinical trials; the likelihood and timing of possible regulatory approval and commercial launch of Regeneron's late-stage product candidates and new indications for marketed products, including without limitation EYLEA ® , Alirocumab, Sarilumab, and Dupilumab; ongoing regulatory obligations and oversight and determinations by regulatory and administrative governmental authorities which may delay or restrict Regeneron's ability to continue to develop or commercialize Regeneron's products and product candidates; competing drugs and product candidates that may be superior to Regeneron's products and product candidates; uncertainty of market acceptance and commercial success of Regeneron's products and product candidates; the ability of Regeneron to manufacture and manage supply chains for multiple 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; the ability of Regeneron to meet any of its sales or other financial projections or guidance and changes to the assumptions underlying those projections or guidance, including without limitation those relating to non-GAAP unreimbursed R&D, non-GAAP SG&A and capital expenditures, the potential for any license or collaboration agreement, including Regeneron's agreements with Sanofi and Bayer HealthCare, to be cancelled or terminated without any further product success; and risks associated with third party intellectual property and pending or future litigation relating thereto. A more complete description of these and other material risks can be found in Regeneron's filings with the U.S. Securities and Exchange Commission, including its Form 10-K for the fiscal year ended December 31, 2012 and its Form 10-Q for the quarterly period ended September 30, 2013, in each case including in the sections thereof captioned “Item 1A. Risk Factors.” Any forward-looking statements are made based on management's current beliefs and judgment, and the reader is cautioned not to rely on any forward-looking statements made by Regeneron. Regeneron does not undertake any obligation to update publicly any forward- looking statement, including without limitation any financial projection or guidance, whether as a result of new information, future events, or otherwise. This presentation uses non-GAAP net income, non-GAAP unreimbursed R&D, and non-GAAP SG&A, which are financial measures that are not calculated in accordance with the U.S. Generally Accepted Accounting Principles (“GAAP”). Regeneron believes that the presentation of these non-GAAP measures is useful to investors because they exclude, as applicable, (i) non-cash share-based compensation expense which fluctuates from period to period based on factors that are not within the Company's control, such as the Company's stock price on the dates share-based grants are issued, (ii) non-cash interest expense related to the Company's convertible senior notes since this is not deemed useful in evaluating the Company's operating performance, (iii) non-cash income tax expense, since the Company does not currently pay, or expect to pay in the near future, significant cash income taxes due primarily to the utilization of net operating loss and tax credit carry-forwards; therefore, non-cash income tax expense is not deemed useful in evaluating the Company's operating performance, and (iv) a non- cash tax benefit as a result of releasing substantially all of the valuation allowance associated with the Company’s deferred tax assets. Non-GAAP unreimbursed R&D represents non-GAAP R&D expenses reduced by R&D expense reimbursements from the Company's collaboration partners. Management uses these non- GAAP measures for planning, budgeting, forecasting, assessing historical performance, and making financial and operational decisions, and also provides forecasts to investors on this basis. However, there are limitations in the use of these and other non-GAAP financial measures as they exclude certain expenses that are recurring in nature. Furthermore, the Company's non-GAAP financial measures may not be comparable with non-GAAP information provided by other companies. Any non-GAAP financial measure presented by Regeneron should be considered supplemental to, and not a substitute for, measures of financial performance prepared in accordance with GAAP. A reconciliation of the Company's GAAP to non-GAAP results is included at the end of this presentation. |
Page 3 | Copyright Regeneron 2014 Regeneron Today Products *EYLEA ex-U.S is partnered with Bayer HealthCare. ZALTRAP is partnered with Sanofi Three approved products with sales in 50+ countries around the world* |
Products Pipeline Regeneron Today Page 4 | Copyright Regeneron 2014 Phase 1 Phase 2 Phase 3 Alirocumab (REGN727) PSCK9 Antibody for LDL cholesterol reduction Sarilumab (REGN88) IL-6R Antibody for Rheumatoid arthritis Dupilumab (REGN668) IL-4R Antibody for asthma, atopic dermatitis, nasal polyposis Sarilumab (REGN88) IL-6R Antibody for Non-infectious Uveitis REGN1033 (GDF8) Antibody for Metabolic disorders Fasinumab (NGF antibody) on clinical hold Enoticumab (REGN421) DII4 Antibody for Advanced malignancies Nesvacumab (REGN910) Ang2 Antibody for Advanced malignancies REGN1400 (ErbB3) Antibody for Advanced malignancies REGN1154 (undisclosed target) REGN1500 (undisclosed target) REGN1193 (undisclosed target) REGN1908-1909 (undisclosed target) REGN2009 (undisclosed target) |
Regeneron Today Page 5 | Copyright Regeneron 2014 Products $65M in approval milestones received in 3Q12 $20M in upfront payments to Sanofi for rights to PDGF and ANG2 antibodies in 2Q13 $45M in milestone payments from Bayer for ex-U.S. EYLEA ® in 3Q13 Profits Pipeline Non-GAAP Net Income* Non-GAAP net income excludes non-cash share-based compensation expense, non-cash interest and non-cash income tax expense See page 38 for GAAP to non-GAAP reconciliation 0 50 100 150 200 250 300 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 |
Awards Products Regeneron named top employer in global biopharmaceutical industry by Science Magazine for second year in a row Named the best place to work by The Scientist in 2013 CEO and CSO named "Management Team of the Year" by Scrip Intelligence Dupilumab named “Clinical Advance of the Year” by Scrip Intelligence Regeneron Today Page 6 | Copyright Regeneron 2014 Profits Pipeline |
Page 7 | Copyright Regeneron 2014 Products Pipeline Profits Awards People Regeneron named top employer in global biopharmaceutical industry by Science Magazine for second year in a row Number of employees grew by 20 percent in 2013 to 2,340 In four locations: Tarrytown, NY; Basking Ridge, NJ; Rensselaer, NY; and Limerick, Ireland Regeneron Today |
Regeneron Building on Success Page 8 | Copyright Regeneron 2014 Organic Growth Continuing Top Line Growth Investment in R&D and Technology |
Regeneron Building on Success Page 9 | Copyright Regeneron 2014 Significant News January 2014 What’s New for Regeneron EYLEA ® & Ophthalmology Franchise 4Q13 and full year 2013 U.S. net sales PDGFR- clinical and business update Alirocumab Sarilumab Dupilumab Update on data and filing timelines Sanofi Collaboration Amended investor agreement Early R&D Regeneron Genetics Center Immuno-Oncology 2014 Financial Guidance Non-GAAP SG&A, unreimbursed R&D, and capital expenditures |
Regeneron Building on Success Page 10 | Copyright Regeneron 2014 Continuing Top Line Growth |
Regeneron Building on Success EYLEA Franchise Page 11 | Copyright Regeneron 2014 Potential for five major regulatory submissions or approvals in next five years |
Page 12 | Copyright Regeneron 2014 EYLEA Franchise |
Page 13 | Copyright Regeneron 2014 2013 U.S. Net Sales: ~$1.4 Billion* 4Q13 U.S. Net Sales: ~$400 Million* Distributor inventory increased to slightly more than two weeks Inventory has historically been 1-2 weeks Commercial terms tightened in January 2014 Full year guidance during 4Q13 call DME: PDUFA date of August 18, 2014 BRVO regulatory filing expected in 1Q14 Regeneron Optimize and Extend EYLEA U.S. EYLEA : Demographics, Market Share, New Indications to Drive Growth DME : Diabetic Macular Edema BRVO : Branch Retinal vein Occlusion * *Preliminary unaudited numbers Impact of compounding legislation uncertain U.S. Net Sales |
Regeneron Optimize and Extend EYLEA Ex-U.S. EYLEA: Launch is Still in Early Innings Ex-U.S. sales contributing to bottom line DME submitted in EU Myopic CNV filed in Japan Global macular edema following BRVO submission expected in 2014 DME : Diabetic Macular Edema AMD: Age-related macular degeneration CRVO : Central Retinal Vein Occlusion BRVO : Branch Retinal vein Occlusion CNV : Choroidal Neovascularization Ex-U.S. launch by partner, Bayer HealthCare, continues to do well In wet-AMD, 40%-50% market share in Australia, Japan and Germany Approved for macular edema following CRVO in EU and Japan Page 14 | Copyright Regeneron 2014 |
PDGFR- /EYLEA ® co-formulation IND submitted in December 2013 First patient enrolled in Phase 1 expected in 1Q14 Regeneron owns 100% commercial rights in U.S. Bayer collaborating outside the U.S. Page 15 | Copyright Regeneron 2014 Regeneron Optimize and Extend EYLEA Protecting the Long Term Value of The Retina Franchise PDGFR- Ophthalmology Research ANG2 Commitment to remain a leader in retinal diseases Investment in internal research and external collaborations Intravitreal co-formulation with EYLEA ® : IND expected to be submitted in 2014 $25.5M upfront $40M in option and milestone payments Bayer/REGN share global development expenses Bayer responsible for certain third party royalties and share of milestones Companies share profits equally |
Page 16 | Copyright Regeneron 2014 Late Stage Pipeline |
Three Late Stage Programs Regeneron Advance Late Stage Pipeline Page 17 | Copyright Regeneron 2014 Late Stage Pipeline Expected to Drive Continued Top-Line Growth PCSK9 antibody for elevated cholesterol IL6R antibody for rheumatoid arthritis IL4R antibody for asthma, atopic dermatitis and nasal polyposis All three programs—alirocumab, sarilumab and dupilumab—are part of Sanofi collaboration Two programs with positive Phase 3 data in 2013: alirocumab & sarilumab Potential for four major regulatory submissions or approvals in next five years*: * Including EYLEA ® regulatory submissions or approvals in next five years Dupilumab Sarilumab Alirocumab PHASE 3 PHASE 3 PHASE 2 Alirocumab for LDL lowering Sarilumab for rheumatoid arthritis Dupilumab for atopic dermatitis Dupilumab for asthma |
Page 18 | Copyright Regeneron 2014 Advancing Late Stage Opportunities Regeneron Alirocumab Positive data from the alirocumab clinical trials have been published in peer-reviewed journals such as the New England Journal of Medicine and The Lancet |
Regeneron Sarilumab Page 19 | Copyright Regeneron 2014 Advancing Late Stage Opportunities Positive Phase 3 data from MOBILITY (N=1,200) reported 4Q13 Both sarilumab dose groups—150 mg and 200 mg—given subcutaneously, every other week, in combination with methotrexate (MTX) achieved all three co-primary endpoints Patients receiving 200 mg + MTX showed a 90% reduction in radiographic progression (mTSS) at week 52 Data to be presented at a medical conference Additional Phase 3 data expected in 2015 Ongoing Phase 3 studies are: COMPARE, TARGET, ASCERTAIN, EXTEND Regulatory submission expected in 2015 MOBILITY: ACR responses at 24 weeks Sarilumab for Rheumatoid Arthritis Infections were the most frequently reported adverse events and were reported with a higher incidence in the sarilumab groups vs. placebo, all in combination with MTX (39.6% for 200 mg, 40.1% for the 150 mg group and 31.1% for pbo). The incidence of serious infections was 4.0% in the 200 mg + MTX group, 2.6% in the 150 mg + MTX group, and 2.3% in the placebo + MTX group. . *primary endpoint, p<0.0001 vs. pbo |
Page 20 | Copyright Regeneron 2014 Regeneron Dupilumab Advancing Late Stage Opportunities Positive data from the dupilumab asthma clinical trial have been published in the New England Journal of Medicine |
Regeneron Building on Success Page 21 | Copyright Regeneron 2014 Investment in R&D and Technology |
Regeneron Building on Success Page 22 | Copyright Regeneron 2014 Wholly-Owned Pipeline of Products Sanofi Collaboration Fasinumab* Phase 2 REGN1400 Phase 1 REGN1154 Phase 1 REGN1500 Phase 1 REGN1193 Phase 1 REGN1908-1909 Phase 1 Innovative Research & Technologies Investment in R&D and Technology |
Page 23 | Copyright Regeneron 2014 Sanofi Collaboration |
Sanofi Collaboration Regeneron Sanofi Collaboration Discovery $160 million of annual funding through 2017 (plus possible tail period through 2020) Sanofi Antibody Collaboration Continues to Provide R&D Leverage Page 24 | Copyright Regeneron 2014 *Regeneron repays Sanofi for 50% of development costs out of profits. Repayment capped in any year at 10% of Regeneron share of total antibody profits Development REGN funds 20% of Phase 3 costs for an antibody following first positive Phase 3 data for that antibody Commercialization Regeneron retains 35% to 45% 45% of profits ex-US* Co-promotion rights in US and other major market countries Ownership / Investor Agreement • Sanofi ownership is currently 15.8M shares or ~16% • Sanofi has obtained right to nominate an independent director to Regeneron BOD when they reach 20% ownership • Voting rights, lock-up, and standstill limit to 30% ownership Ownership / Investor Agreement • Sanofi ownership is currently 15.8M shares or ~16% • Sanofi has obtained right to nominate an independent director to Regeneron BOD when they reach 20% ownership • Voting rights, lock-up, and standstill limit to 30% ownership Sanofi funds approximately 100% of clinical development cost Regeneron retains 50% of profits in US* |
Phase 1 Phase 2 Phase 3 Alirocumab (REGN727) PSCK9 Antibody for LDL cholesterol reduction Sarilumab (REGN88) IL-6R Antibody for Rheumatoid arthritis Dupilumab (REGN668) IL-4R Antibody for Asthma, Atopic dermatitis, nasal polyposis Sarilumab (REGN88) IL-6R Antibody for Non-infectious Uveitis REGN1033 GDF8 Antibody for Metabolic disorders Enoticumab (REGN421) DII4 Antibody for Advanced malignancies Nesvacumab (REGN910) Ang2 Antibody for Advanced malignancies REGN2009 (undisclosed target) Page 25 | Copyright Regeneron 2014 Sanofi collaboration a major contributor to Regeneron R&D Sanofi is estimated to spend more than $1 Billion on collaboration programs in 2014* Regeneron contribution to collaboration R&D funding increasing in 2014 20% funding of alirocumab and sarilumab Phase 3 trials Estimated to be ~$115 MM in 2014 Sanofi Antibody Collaboration Continues to Provide R&D Leverage Regeneron Sanofi Collaboration *Regeneron to repay 50% of collaboration clinical development spending out of antibody profits Sanofi Collaboration |
Page 26 | Copyright Regeneron 2014 Pipeline of Wholly-Owned Antibodies |
Wholly-Owned Clinical Stage Antibodies Advancing early stage pipeline of Regeneron-owned antibodies Fasinumab* (Phase 2, NGF antibody) REGN1400 (Phase 1, ErbB3, advanced malignancies) REGN1154 (Phase 1, undisclosed target) REGN1500 (Phase 1, undisclosed target) REGN1193 (Phase 1, undisclosed target) REGN1908-1909 (Phase 1, undisclosed target) As pipeline advances, R&D expense will increase Pipeline of Wholly-Owned Antibodies is Growing Regeneron Wholly-Owned Antibody Pipeline *Currently on clinical hold by the FDA Pipeline compounds address six distinct therapeutic areas Committed to advance through POC to maximize value |
Page 28 | Copyright Regeneron 2014 Innovative Research and Novel Technologies |
Immuno-Oncology CD20-CD3 bispecific antibody expected to enter clinic in 2014 Page 29 | Copyright Regeneron 2014 Regeneron Innovating for the Future Investment in Research & Development and Technology Regeneron Genetics Center Major new investment in human genetics research Collaboration with Geisinger Health System is cornerstone of population based approach Additional collaborations expected Other Pipeline Technologies Long-acting antibodies Antibody Drug Conjugates Next Generation VelocImmune ® Mice |
Immuno-Oncology Approach: CD20-CD3 Bispecific Antibody Bispecific antibody bind T Cells (via CD3) and tumor (via specific surface marker) Use of modified VelocImmune ® mice to generate fully human bispecific antibodies provides benefits High affinity to target Ease of manufacturing Typical antibody pharmacodynamics Initial CD20-CD3 antibody expected to enter the clinic in 2014 Additional immuno-oncology approaches in preclinical development Page 30 | Copyright Regeneron 2014 Investment in Research & Development and Technology Regeneron Innovating for the Future T-cell Tumor Cell Killing |
Page 31 | Copyright Regeneron 2014 Regeneron Genetics Center a Major Initiative in Human Genetics Regeneron Innovating for the Future Regeneron Genetics Center Population-Based Family-Based Collaborations: Geisinger, NIH, and pursuing more Approaches: population and family based, consortia, and functional studies Technology: large scale sequencing, automation, and cloud informatics Fully Integrated: Sequencing Informatics Biology Drug Development Targets & Indications |
Organic Growth Regeneron Building on Success Page 32 | Copyright Regeneron 2014 |
Page 33 | Copyright Regeneron 2014 Regeneron Organic Growth Growth in Manufacturing and at Corporate Headquarters Two new buildings to support additional research and development Expansion in Tarrytown, NY Expect to increase headcount to >4,000 by 2018 People Expansion in Rensselaer, NY and new facility in Limerick, Ireland New Manufacturing Facilities Tarrytown, NY Limerick, Ireland |
Regeneron Financial Guidance Page 34 | Copyright Regeneron 2014 Financial Guidance Non-GAAP SG&A: $330MM - $380MM Increase in prelaunch commercial expenses, contribution to patient assistance programs, pharma fee and headcount Non-GAAP Unreimbursed R&D: $425MM - $475MM ~$115 M in expenses related to alirocumab and sarilumab Phase 3 trials Investment in PDGFR and Ang2 programs Growing wholly-owned antibody pipeline Early technologies, such as Regeneron Genetics Center Capital Expenditures: $350MM - $425MM Manufacturing expansions in Rensselaer and Ireland R&D and corporate headquarters expansion in Tarrytown 2014 Financial Guidance |
Continuing Top Line Growth Organic Growth Regeneron Building on Success Page 35 | Copyright Regeneron 2014 Investment in R&D and Technology |
Regeneron 2014 Milestones Page 36 | Copyright Regeneron 2014 Upcoming Milestones Clinical Phase 2 data for dupilumab in atopic dermatitis in 1H14 Phase 3 trial to start with dupilumab in AD in 2014 Phase 3 data from alirocumab ODYSSEY program in mid-2014 through 3Q14 PDGFR /EYLEA coformulation to enter clinic in 1Q14 CD20-CD3 bispecific antibody to enter clinic Commercial EYLEA U.S. net sales guidance to be provided on 4Q13 conference call Regulatory EYLEA for DME PDUFA date of August 18, 2014 Filing of EYLEA for BRVO indication expected in 1Q14 EYLEA for DME regulatory applications submitted outside the U.S. |
Regeneron News Page 37 | Copyright Regeneron 2014 Significant News Flow at J.P. Morgan What’s News for Regeneron at J.P. Morgan 2014 EYLEA Full year 2013 U.S. Net Sales: ~$1.4 # Billion 4Q13 U.S. Net Sales: ~$400 Million* # Clinical trial to start in 1Q14 Signed a collaboration with Bayer HealthCare for commercial rights outside the U.S. Alirocumab Phase 3 data from ODYSSEY program expected mid-year** Initial regulatory submission ex-US in early 2015, U.S. in 2015 Dupilumab Phase 2a atopic dermatitis data to be presented at AAAAI in March Top-line Phase 2b atopic dermatitis data expected in 2Q14 Plan to initiate Phase 3 trial in atopic dermatitis in 2014 Sanofi Amended investor agreement to allow for Sanofi to nominate a single director to Regeneron BOD; amended voting rights, lock-up, and stand still agreement Human Genetics Announced major effort in human genetics: The Regeneron Genetics Center Entered into first significant genetics collaboration with Geisinger Health System Immuno-Oncology CD20-CD3 bispecific antibody to enter clinic in 2014 2014 Financial Guidance Non-GAAP SG&A: $330MM - $380MM Non-GAAP unreimbursed R&D: $425MM - $475MM Capital expenditures: $350MM - $425MM # Preliminary unaudited numbers *Includes increase in distributor inventory **From all Phase 3 studies except OUTCOMES, CHOICE 1, and CHOICE 2 PDGFR- |
GAAP to Non-GAAP Reconciliation 1Q’12 2Q’12 3Q’12 4Q’12 1Q’13 2Q’13 3Q’13 GAAP net income 11,651 76,743 191,468 470,407 98,874 87,376 141,306 Adjustments R&D: Non-cash share-based compensation expense 10,556 11,442 13,337 18,498 26,761 27,722 28,258 SG&A: Non-cash share-based compensation expense 12,578 7,790 7,030 11,851 25,787 16,344 17,114 COGS: Non-cash share-based compensation expense 111 391 150 422 483 376 373 Interest expense: Non-cash interest related to convertible senior notes 5,218 5,316 5,499 5,591 5,781 5,535 5,823 Income taxes: Non-cash income tax expense 4,308 ( 42,957 60,316 84,378 Income taxes: Release of valuation allowance (340,156) (8) Non-GAAP net income 40,114 101,682 217,484 170,921 200,643 197,669 277,252 Non-GAAP net income per share – basic 0.43 1.07 2.29 1.79 2.07 2.02 2.82 Non-GAAP net income per share – diluted 0.37 (3) 0.90 (5) 1.89 (6) 1.47 (9) 1.78 (10) 1.73 (11) 2.40 (12) Shares used in calculating Non-GAAP net income per share - basic 93,446 94,589 95,012 95,691 96,878 97,700 98,226 Shares used in calculating Non-GAAP net income per share – diluted 112,495 114,928 115,830 117,237 113,730 115,261 116,068 1) To exclude non-cash compensation expense related to employee stock option and restricted stock award 2) To exclude non-cash interest expense related to the amortization of the debt discount and debt issuance costs on the Company's 1.875% convertible senior notes 3) For diluted non-GAAP per share calculations, excludes $1.9 million of interest expense related to the contractual coupon interest rate on the Company's 1.875% convertible senior notes, since these securities were dilutive 4) Weighted average shares outstanding includes the dilutive effect, if any, of employee stock options, restricted stock awards, convertible senior notes, and warrants 5) For diluted non-GAAP per share calculations, excludes $1.9 million of interest expense for the three months ended June 30, 2012 related to the contractual coupon interest rate on the Company's 1.875% convertible senior notes, since these securities were dilutive 6) For diluted non-GAAP per share calculations, excludes $1.9 million of interest expense for the three months ended September 30, 2012 related to the contractual coupon interest rate on the Company's 1.875% convertible senior notes, since these securities were dilutive 7) To exclude GAAP income tax expense as this amount is not payable in cash 8) To exclude non-cash tax benefit related to releasing substantially all of the valuation allowance associated with the Company's deferred tax assets 9) For diluted non-GAAP per share calculations, excludes $1.9 million of interest expense for the three months ended December 31, 2012 related to the contractual coupon interest rate on the Company's 1.875% convertible senior notes, since these securities were dilutive 10) For diluted non-GAAP per share calculations, excludes $1.9 million of interest expense for the three month ended March 31, 2013 related to the contractual coupon interest rate on the Company's 1.875% convertible senior notes, since these securities were dilutive 11) For diluted non-GAAP per share calculations, excludes $1.8 million of interest expense for the three month periods ended June 30, 2013 related to the contractual coupon interest rate on the Company's 1.875% convertible senior notes, since these securities were dilutive 12) For diluted non-GAAP per share calculations, excludes $1.8 million of interest expense for the three months ended September 30, 2013, related to the contractual coupon interest rate on the Company's 1.875% convertible senior notes, since these securities were dilutive (1) (1) (1) (2) (4) (7) |