[REGENERON LETTERHEAD]
FOR IMMEDIATE RELEASE
REGENERON REPORTS FOURTH QUARTER AND FULL YEAR
2002 FINANCIAL AND OPERATING RESULTS
Tarrytown, New York (January 30, 2003) -- Regeneron Pharmaceuticals, Inc.
(Nasdaq: REGN) today announced financial and operating results for the fourth
quarter and year ended December 31, 2002.
Regeneron reported a net loss of $35.7 million, or $0.81 per share, for the
fourth quarter of 2002 compared with a net loss of $28.4 million, or $0.65 per
share, for the fourth quarter of 2001. The Company reported a net loss of $124.4
million, or $2.83 per share, for the full year 2002 compared with a net loss of
$76.2 million, or $1.81 per share, in 2001.
Cash, marketable securities, and restricted marketable securities totaled $295.2
million at December 31, 2002 compared with $438.4 million at December 31, 2001.
Total operating expenses for the fourth quarter of 2002 were $39.5 million, 16
percent higher than the same period in 2001. For the full year 2002, these
expenses were $143.9 million, an increase of 34 percent over the full year 2001.
Research and development expenses increased 14 percent to $34.5 million for the
fourth quarter of 2002 and 36 percent to $124.9 million for the full year 2002,
primarily due to the expansion of the Company's clinical development programs.
The Company also continued to expand its basic research programs.
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Contract manufacturing expense relates primarily to Regeneron's long-term
manufacturing agreement with Merck & Co., Inc. Contract manufacturing expense
increased to $1.7 million in the fourth quarter of 2002 from $1.2 million in the
comparable quarter of 2001, primarily because Regeneron shipped more product to
Merck in the fourth quarter of 2002. For the full years 2002 and 2001, the
Company shipped similar amounts of product to Merck. Regeneron recognizes
contract manufacturing revenue and the related manufacturing expense as the
product is shipped.
General and administrative expenses increased to $3.4 million in the current
quarter from $2.7 million in last year's fourth quarter. For the full year 2002,
these expenses were $12.5 million, compared with $9.6 million in 2001. General
and administrative expenses rose primarily due to higher staffing to support the
growth of the Company and higher fees paid to outside service providers,
including higher patent prosecution and legal expenses related to the expansion
of the Company's intellectual property portfolio.
Interest expense increased in the fourth quarter of 2002 and for the full year
2002 compared with the same periods in 2001 due to interest incurred on $200.0
million of convertible notes issued in October 2001. The notes, which mature in
2008, bear interest at 5.5% per annum. Investment income declined for the full
year 2002 compared with 2001 due to lower effective interest rates on investment
securities and lower levels of interest-bearing investments in the fourth
quarter of 2002, as the Company funded its operations.
Regeneron's total revenue increased to $4.9 million for the fourth quarter of
2002 from $4.4 million for the same period of 2001 because of higher contract
manufacturing revenue as the Company shipped more product to Merck during the
fourth quarter of 2002. Regeneron's total revenue was $22.0 million for both the
full year 2002 and 2001. Contract research and development revenue decreased for
the full year 2002 due to the substantial completion of studies
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conducted on behalf of Amgen-Regeneron Partners. Contract manufacturing revenue
increased for the full year 2002 primarily due to the receipt of a non-recurring
$1.0 million payment related to the Company's long-term manufacturing agreement
with Merck.
Per share amounts are based on the weighted average number of shares of the
Company's Common Stock and Class A Stock outstanding.
CURRENT BUSINESS HIGHLIGHTS
Regeneron's clinical development program includes four product candidates.
AXOKINE(R) is in Phase III trials for the treatment of obesity. In July 2001,
Regeneron initiated a pivotal trial for AXOKINE in approximately 2,000 subjects
that is being conducted in 65 sites across the United States. The Company
recently announced the conclusion of the twelve-month treatment period of the
pivotal trial, during which subjects received daily subcutaneous self-injections
of placebo or AXOKINE. The data from this phase of the trial currently is being
collected, and results are expected to be available around the beginning of the
second quarter of 2003. This placebo- controlled, double-blind treatment phase
is being followed by a twelve-month open-label safety extension phase, in which
all study subjects receive AXOKINE. An additional trial began in June 2002 that
will assess the safety and efficacy of AXOKINE in overweight individuals with
type 2 diabetes mellitus. Two other trials, designed to evaluate the safety of
intermittent treatment with AXOKINE and study maintenance of weight loss
following short-term treatment regimens, were fully enrolled in July 2002 and
are in progress. Additional twelve-month Phase III studies are expected to begin
later in 2003.
Regeneron recently announced that the U.S. Food and Drug Administration (FDA)
had granted fast track designation to a component of the development program of
AXOKINE obesity. This designation covers long-term treatment of seriously obese
people who are unresponsive to, intolerant of, or unsuitable
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candidates for certain FDA approved medicines for obesity. As part of its
ongoing development of AXOKINE, Regeneron plans to study the use of AXOKINE in
this patient population.
Regeneron has three additional product candidates in clinical development. The
IL-1 Trap is being evaluated in a Phase II trial for safety and efficacy in
people with active rheumatoid arthritis. This trial is enrolling approximately
200 subjects, who are being treated for 12 weeks and who will be evaluated for
an additional 10 weeks after treatment ends. The VEGF Trap is in a Phase I
clinical trial designed to assess the safety and tolerability of the molecule in
subjects with solid tumor malignancies or with non-Hodgkins lymphoma. In the
fourth quarter of 2002, Regeneron initiated a Phase I trial for the IL-4/13 Trap
in subjects with mild to moderate asthma. This trial is a placebo-controlled,
double-blind, dose escalation study to assess the safety and tolerability of the
IL-4/13 Trap.
In other developments, the Company reported that it had entered into an
agreement with Serono S.A. to use its proprietary Velocigene(TM) technology
platform to provide Serono with knock-out and transgenic mammalian models of
gene function. Under the terms of the agreement, Serono will pay Regeneron up to
$3 million annually for up to five years for models that target genes specified
by Serono.
ABOUT REGENERON
Regeneron is a biopharmaceutical company that discovers, develops, and intends
to commercialize therapeutic medicines for the treatment of serious medical
conditions. Regeneron has therapeutic candidates in clinical trials for the
potential treatment of obesity, rheumatoid arthritis, cancer, and asthma and has
preclinical programs in other diseases and disorders.
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This news release discusses historical information and includes
forward-looking statements about Regeneron and its products, programs, finances,
and business, all of which involve a number of risks and uncertainties, such as
risks associated with preclinical and clinical development of drugs and
biologics, determinations by regulatory and administrative governmental
authorities, competitive factors, technological developments, the availability
and cost of capital, the costs of developing, producing and selling products,
the potential for any collaboration agreement to be canceled or to terminate
without any product success, and other material risks. A more complete
description of these risks can be found in Regeneron's filings with the United
States Securities and Exchange Commission, including its Form 10-K for the year
ended December 31, 2001 and Form 10-Q for the quarter ended September 30, 2002.
Regeneron does not undertake any obligation to update publicly any
forward-looking statement, whether as a result of new information, future
events, or otherwise unless required by law.
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INVESTOR RELATIONS CONTACT: MEDIA CONTACT:
Charles Poole Jeanne Abi-Nader
Vice President, Investor Relations Vice President
Regeneron Pharmaceuticals, Inc. Robinson, Lerer, Montgomery
charles.poole@regn.com jabi.nader@rlm.com
(914) 345-7641 (212) 484-7954
Additional information about Regeneron and recent news releases are available on
Regeneron's Worldwide Web Home Page at www.regn.com. Fax copies of news
releases can be obtained from Regeneron's News-on-Demand Service by dialing
(800) 311-0841
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REGENERON PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)
DECEMBER 31,
2002 2001
--------- --------
ASSETS
Cash, marketable securities and restricted
marketable securities $295,246 $438,383
Accounts receivable 4,017 2,975
Inventory 6,831 3,973
Property, plant and equipment, net 76,825 39,448
Other assets 8,655 10,618
-------- --------
Total assets $391,574 $495,397
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 30,309 $ 14,830
Deferred revenue 15,134 13,636
Notes payable 200,000 200,000
Other liabilities 150 576
Stockholders' equity 145,981 266,355
-------- --------
Total liabilities and stockholders' equity $391,574 $495,397
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REGENERON PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE THREE MONTHS FOR THE YEAR ENDED
ENDED DECEMBER 31, DECEMBER 31,
2002 2001 2002 2001
-------- -------- --------- --------
Revenues
Contract research and development $ 2,709 $ 2,720 $ 10,924 $ 12,071
Contract manufacturing 2,203 1,681 11,064 9,902
-------- -------- --------- --------
4,912 4,401 21,988 21,973
-------- -------- --------- --------
Expenses
Research and development 34,455 30,100 124,926 91,540
Contract manufacturing 1,726 1,162 6,483 6,509
General and administrative 3,365 2,732 12,532 9,607
-------- -------- --------- --------
39,546 33,994 143,941 107,656
-------- -------- --------- --------
Loss from operations (34,634) (29,593) (121,953) (85,683)
-------- -------- --------- --------
Other income (expense)
Investment income 1,758 3,688 9,461 13,162
(Loss in) earnings from Amgen-Regeneron
Partners (24) 54 (26) (1,002)
Interest expense (2,793) (2,527) (11,859) (2,657)
-------- -------- --------- --------
(1,059) 1,215 (2,424) 9,503
-------- -------- --------- --------
Net loss ($35,693) ($28,378) ($124,377) ($76,180)
======== ======== ========= ========
Net loss per share amounts, basic and diluted ($0.81) ($0.65) ($2.83) ($1.81)
======== ======== ========= ========
Weighted average number of Common
and Class A shares outstanding: basic and diluted 43,984 43,708 43,918 42,075
======== ======== ========= ========
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